Editor's note: This is the second in a four-part series looking into a May 2023 Wisconsin Policy Forum report on upcoming school budgets.
WISCONSIN — Billions of dollars of education aid are set to expire by the beginning of the 2024-2025 school year. Wisconsin’s two largest school districts — Milwaukee Public Schools and Madison Metropolitan School District — have the largest chunks of change to spend still.
In a new report, Wisconsin Policy Forum took a look into funding for Wisconsin schools.
Per Wisconsin Policy Forum, Wisconsin schools received $204.6 million through the CARES Act, $685.4 million from the Consolidated Appropriations Act and $1.49 billion through the American Rescue Plan Act. An additional $110 million was given to Wisconsin, and Gov. Tony Evers distributed it to Wisconsin schools.
Funds were given to schools through three rounds of Elementary and Secondary School Emergency Relief (ESSER) funding and the Governor’s Emergency Education Relief Fund (GEER).
All of that money was allocated to schools to help them cope with the impacts of the pandemic, Wisconsin Policy Forum's report stated.
According to the Wisconsin Department of Public Instruction, funds from the last round of aid must be spent or designated toward an expense by Sept. 2024. This means the next “annual budget for schools will be essentially the last one with any new spending of this aid.”
Excluding the state’s two largest districts — MPS and MMSD — Wisconsin’s school districts and independent charter schools have claimed reimbursements for 98.8% of their first round of GEER and ESSER funds, according to Wisconsin Policy Forum’s latest report. With MPS and MMSD included, that drops to 98%.
Excluding MPS and MMSD, Wisconsin school districts and independent chart schools claimed reimbursement for 75.4% of the second round of ESSER funds and 16.8% of the final ESSER allocation, per the report. When MPS and MMSD are considered, Wisconsin Policy Forum said those numbers drop to 50.3% and 10.8% respectively.
MPS and MMSD have claimed less than 30% of their funds as of Feb. 2023. Wisconsin Policy Forum noted that some of the remaining funds have been spent since then.
How these funds have been spent has fluctuated.
In the first round of funding, 39% of funds were allocated for educational technology to facilitate virtual schooling; 34.2% was used for preparedness and response to COVID-19, which included items such as masks and personal protective equipment. Another 21.2% was used for addressing long-term school closures.
In the second round of funding, only 15.8% of funds went toward educational technology, which dropped to 9.3% by round three. Schools used 30.4% of funds for COVID-19 response in the second round, which also dropped by the third round of funding, when it made up just 26.8% of funds.
More money has been used to address long-term school closures. In the second round of funding, that allocation jumped to 41.3%, and rose to 52.2% by the third.
“This broad category includes interventions to help students cope with a number of challenges from the pandemic, including in some cases being out of traditional classrooms for long periods of time,” Wisconsin Policy Forum said.
The Department of Public Instruction said it has approved $707.8 million in claims out of the $2.39 million available — or 29.7%. That means $1.7 billion is left to be spent by Sept. 2024. However, because there can be a lag between using the funds and submitting claims for reimbursement, the report noted that numbers may be skewed.
State revenue freeze
During the 2022 and 2023 school years, Wisconsin lawmakers kept tight limits of school district funding, according to the Wisconsin Policy Forum. The 2021-2023 state budget did not increase state revenue limits for two years. This caps the amount of money that a school district can raise via local property taxes and state general school aids combined, according to Wisconsin Policy Forum.
The revenue freeze, along with the increases in general school aids, “restricted property tax increases” over the last two years. In 2021, the rise in gross school property taxes was just 0.3%. In 2022, that number rose to 1.5%. The report stated that “this two-year budget cycle [was] one of the tightest for K-12 levies of the past two decades.
According to Wisconsin Policy Forum, the already small increases could have been even smaller. However, a lot of school referenda have passed over the last several years, and voters opted to raise their taxes and school funds in tandem.
At one point — 1999 to 2009 — the annual increases in per pupil revenue limits hovered around inflation rates. Since then the gap has widened. In fact, this past state budget marked the widest gap between the percentage change in revenue limits and the overall inflation rates.
This gap, Wisconsin Policy Forum explained, creates a dilemma for school districts. There is a push to provide cost-of-living salary increases for staff, as many schools face teacher shortages and staff turnover. Employee wages are already the most costly expense for school districts. But school districts have been hesitant to permanently increase pay for staff since the future budgets remain uncertain. Furthermore, they face financial risk if they use pandemic federal aid to pay permanent expenses, since they will not see that income after 2024. Plus, not every district received pandemic aid in the first place.
Gov. Evers’ proposed budget for 2023-2025 included $2.6 billion in additional state aid to schools, increasing the school revenue limits. Under the proposed budget, revenue limits would be raised by $350 per student in 2024 and by an additional $650 per student the following year. This would be the “largest increase since the revenue caps were first introduced,” Wisconsin Policy Forum said.
Evers also said he would “return the practice of linking revenue limit increases to the growth in CPI.”
However, GOP lawmakers said they plan to shrink Evers’ proposed revenue limit increase. Yet, the Wisconsin Policy Forum said the GOP will most likely give an increase of some kind, although it’s unclear how much that would be.
Read the full report below: