School funding issues

Wisconsin spent more than $5 billion on public schools last year. Property taxpayers spent about $4 billion. With all that money, how could schools be making so many cuts? School leaders say it's because of a controversial formula that needs to be changed.

"We are on the verge of making major program cuts," said David Harswick, president of the teachers' union in Green Bay .

There are 860,477 students enrolled in public schools in Wisconsin. According to the Wisconsin Department of Public Instruction , the average cost for educating a student in Wisconsin is $10,549 per student per year. Districts in Green Bay, Appleton and Oshkosh are all slightly below the state average.

Since 1993, the Wisconsin Legislature has set strict limits on how much school districts can spend. But now, some school leaders say those limits are putting a strangle hold on education.

Green Bay superintendent Greg Maass says the budget problems are not being caused by districts.

"I think there's a philosophy here in Wisconsin that somehow school districts are the problem," Maass said. "I think the revenue formula created the current political circumstances that school districts are in."

Here's how the school funding system works:

The money spent by school districts comes almost exclusively from taxpayers. The percentages vary by district but statewide, half of the money comes from the state, 38% from local property taxes, six percent comes from the federal government. The other six percent comes from things like fees and interest.

The legislature controls how much money each district can collect with what's called the revenue cap. The cap includes a combination of state aid and property taxes. In general, districts with high property values get less state aid. Districts with lower property values get more.

Increases in the revenue cap are tied to inflation and enrollment growth. That means the more students you have, the more money you can get. And if you lose students, you can lose money.

Here's where the problem comes in: while the revenue cap on average has grown by about 2.5% every year, the cost of maintaining services from year to year has gone up 4%. That means each year, the gap between the money districts are allowed to spend and expected costs gets wider, meaning something has to be cut.

Maass says the current system is putting school districts in a bind.

"You're in a position of either cutting people, reducing salaries, freezing benefits or reducing benefits, cutting or eliminating programs and this is on a year over year basis where if something doesn't change, all we're going to be doing in the public school business is cutting programs, cutting people, cutting salaries and benefits," Maass said.

How would Maass grade the current system?

"Probably a D," he said.

"It is so complex that it is hard for any one person to understand let alone a member of the public," said Julie Underwood of the School Finance Network , a group pushing for changes in school funding. She also has a low opinion of the current system.

"It doesn't provide sufficient funds to schools," she said.

Underwood's grade?

"It would be generous to give it a D," Underwood said.

But not everyone agrees.

Todd Berry is president of the Wisconsin Taxpayers Alliance . He gives the current formula a B+.

"The school aid formula isn't perfect," Berry said. "We could tweak it but fundamentally it's a decent system and it works."

Berry says the real issue is declining enrollment.

"Revenue limits or no revenue limits, state aid formula or no state aid formula, districts that are losing lots of kids and there are a lot of them particularly in the north, are going to have real budget problems," Berry said.

"The current funding formula basically penalizes a school district, whether it's rural or urban, that looses students," said Harswick, the teachers' union president in Green Bay. He added that school funding needs to be changed, and needs to be changed now. His grade?

"A D for very difficult," Harswick said.

Even in districts with little change in enrollment, there are problems. In Green Bay for example, enrollment has been flat. But the cost of maintaining services keeps going up. The superintendent says there will be a $6-$8 million deficit each year until the funding system is changed.

So what is the solution? We'll explore that issue on Thursday.