State Funding for Public Schools to See Major Cuts
School districts throughout the Badger State, especially those in Milwaukee and surrounding communities, will be affected by the legislature’s decision to reduce state funding for public schools. As a result of this decision, local communities will surely increase property taxes in order to fund their educational institutions.
On July 2, 2010, recently-elected State Superintendent of Public Instruction Tony Evers announced that the Department of Education and the state legislature intend to reduce state budget shortfalls by decreasing funding for school districts. Evers, in his 2009 campaign, promised that he would not cut aid to public schools and would work voraciously to ensure that education quality would increase. When asked about his decision, Evers cited the mounting state budget deficit as his justification.
Inner-city schools, especially those in the Milwaukee and Madison public school systems, will be most affected by this policy. The Wisconsin State Journal noted that 11 of the 50 public school districts in metropolitan Milwaukee and surrounding areas will receive at least 10% less general aid than they received in FY 2009-2010. Seven will receive 15% less aid. The Hartford School District will witness the largest reduction in state aid for FY 2010-2011. In FY 2009-2010, the district received $6,837,900 in state aid, whereas in FY 2010-2011, general aid will be reduced to $5,792,449. This 15.29% reduction in state aid could force the Hartford school district to declare bankruptcy or merge with another school district in order to survive.
This drastic reduction in state aid to schools that are already struggling could cause them great difficulty. The reduction in state aid to education, while affecting every school district, will place inner-city and less-affluent school districts in a more precarious position. General state aid was originally conceived as a mechanism to narrow spending disparities between wealthy and underprivileged school districts.
Reducing state aid to education will negatively impact every citizen in the Badger State because it will lead to significant property tax increases. Renowned economists Dr. Arthur Laffer, Stephen Moore, and Jonathan Williams, in Rich States, Poor States: ALEC Laffer State Economic Competiveness Index, note that Wisconsin currently ranks only 42nd in property tax burden. For every $1,000 earned in income, Wisconsinites pay $43.04 in property taxes. Since that report was released, the state’s property tax burden has already increased to nearly $45 for every $1,000 earned in income. But this policy means the problem is only going to get worse. Jeff Gross, the director of business services for the Menominee Falls school district, notes that the Menominee Falls city council and school board have little choice but to increase their property tax levy by 5.6% for the next fiscal year because of this state aid cut. The New Berlin School Board just increased their property tax levy for FY 2010-2011 by 6.2%. Roger Dickson, the director of financial services in the New Berlin School District, says they increased the property tax levy because they needed to increase the district’s operating revenue and deal with skyrocketing pension liabilities.
Increasing property taxes to pay for pension liabilities and faculty salaries is yet another example of why the state public school system is detested by many in the electorate. Wisconsinites should protest these property tax increases and demand instead that school districts start trimming the fat from their own budgets instead of concluding that such substantial tax hikes are their only option for resolving financial crises.
The Wisconsin section of the Weekly Political Forecast is written by PAI’s Political Analyst.
