This post originally appeared at https://www.badgerinstitute.org/new-school-funding-bill-would-eliminate-indirect-reliance-on-property-taxes-for-choice-and-charter-schools/

Badger Institute in support of simplified funding from state for choice and charter schools

A new bill in Madison could, if enacted, result in substantial property tax cuts in many school districts.    

It would also result in significantly higher state aid for many traditional public school districts where large numbers of children choose to attend independent charter schools or private schools in one of Wisconsin’s parental choice programs. 

State aid to districts would increase by about $293 million statewide. Property taxes would decline by about $220 million statewide.  

Supported by the Badger Institute, the bill, AB900, is part of a set of proposals to ultimately alter and simplify which taxes support various schools in some parts of the state. 

School funding in Wisconsin is notoriously complicated and understood by relatively few people. 

Part of the complication stems from the fact there are over 420 school districts in Wisconsin that have myriad funding streams, several different types of charter schools and four different parental choice programs. 

The oldest and largest one is in Milwaukee, but there is another in Racine and a third in the rest of the Badger State. Currently, when parents send a child to a private school under the choice program, $9,874 of state aid follows each elementary school child, and $12,368 follows each  high-schooler.  

Outside Milwaukee, the state aid first flows through the books of the school district where the student lives before going to the private school she actually attends. Local districts then have the option of requiring property taxpayers to make up for the district’s “loss” of revenue for that year. 

Milwaukee used to operate under a similar scheme, but under current law that’s been phasing out and is scheduled to be gone by next school year. At that point, children using the parental choice program will simply be funded directly by the state, with no effect on Milwaukee property taxes.  

The measure the Assembly is considering would similarly end the money shuffle statewide. It would completely decouple property taxes from these sorts of school funding formulas. 

The proposal, in other words, would separate the funding for the Parental Choice programs outside Milwaukee from the budgets of any local school district, and it would eliminate the  impact on property taxpayers, who often backfill some of the state aid traditional  districts lose when children leave for parental choice schools.  

It is estimated that of the 421 districts, 404 would receive more aid, have lower property taxes, and have increased spending authority. The other 17 districts, those with no students in choice or charter schools, would see no change. 

The property tax impact, which supporters of the bill see as an unnecessary complication or flaw in funding formulas, also affects about a third of independent charter schools, the so-called “2x” charter schools. Funding for so-called “2r” or “legacy” charter schools — those authorized by UW-Milwaukee, UW-Parkside, the Milwaukee Area Technical College or the City of Milwaukee — are already funding directly from the state with no impact on property taxes.  

Charter schools that are run by a school district aren’t affected at all by this legislation.

Jim Bender is an Education Consultant to the Badger Institute and Patrick McIlheran its Director of Policy. Permission to reprint is granted as long as the authors and Badger Institute are properly cited.

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