Wisconsin, home of the Milwaukee Brewers, the Green Bay Packers and often referred to as America’s Dairyland. Wisconsin’s state motto is very simple, “Forward”, which has defined the state’s drive to be a national leader since the motto was first instituted back in 1851. The state song, “On Wisconsin”, has a similar theme and represents a progressive state that is consistently moving forward. The Wisconsin school system also claims to have a proud history of progressive education.

Wisconsin was granted statehood on May 29, 1848, becoming the 30th state. It was in this same year that Wisconsin first recognized public education, and began dialogue on ways to finance it. Wisconsin Constitution, Article X, Section 3 states that, “The legislature shall provide by law for the establishment of district schools, which shall be as nearly uniform as practicable.” Established school districts were handed the authority to govern the schooling in their region, and were given the power to tax in order to fund school development. According to Maher, Skidmore and Statz (2007) it was decided that the school districts should be funded through local property taxes, which presented further challenges. This created a heavy reliance on local property taxes, leading to frustration for taxpayers. The second major challenge was that all districts were different in size and demographic, therefore this created a disparity between districts in their ability to raise money through taxes.
The state was forced to provide financial aid due to the inequity in dollars that could be raised between districts. The state set up financial aid, the Common School Fund or Library Aid. Maher et al. (2007) state that, “Initially, this support was provided to every school in the form of a flat amount of aid per pupil. This original aid, the Common School Fund or Library Aid, had as its purpose to support and maintain common schools in each district while purchasing suitable school libraries.”

The Wisconsin Board of Commissioners of Public Lands (BCPL) was formed and ratified in 1848. The BCPL was responsible for managing the Wisconsin Trust Funds for public education. The board was set up in the nineteenth century to oversee the sale of Trust lands, this was the land that the government could sell in order to finance public education. These grants are still available today.

The first attempts to create funding equalization were in 1923-24. Maher et al. (2007) state, “In 1923-1924, the statewide equalized valuation was $5 billion (nominal dollars). Dividing that amount by the 480,000 students enrolled in public schools provided an average of $10,116 in statewide average tax base behind each student. While this produced an average tax rate of $9.25 mills ($9.25 per $1000 in property value), some communities paid more, while others paid considerably less.” Although this began to create a degree of equalization there were still significant disparities between districts. Public policy concerning the distribution of state aids to public schools continued with a combination of flat aids and an equalized distribution per teacher until 1949.

One of the first major reforms in school funding legislature came in 1949. Flat aids remained in place, but a new formula was implemented that was based on per-pupil guaranteed tax base. It increased the overall level of state financial support. Between 1923-24 and 1949 demographics within the state changed as a result of manufacturing, farming and land prices which created even more significant disparities in the tax available through land prices. Therefore, the new reforms provided equalization grants to poorer districts and flat grants to wealthier districts. Unfortunately, even with further financial aid it did not resolve the inequity issue because house prices dropped in some areas of the state due to agricultural and industrial changes. This in turn meant that taxpayers had to pay higher taxes to maintain school funding. Wisconsin was the first state to adopt this school aid formula of guaranteed valuation. Guaranteed valuation was the state’s way of assuring that each public school student would be supported by a guaranteed property evaluation. There was also a further incentive for schools, those who achieved higher educational standards received more aid. This was intended to drive poorer districts toward developing quality teaching and educational programs. This approach to school financing remained in place until 1973.

Prior to the 1970’s school financing was offered from most state governments. This financial aid was labeled ‘categorical aid’. According to Maher et al. (2007) categorical aid is distinguished by two features:
1. It is state funded from state income, sales and other taxes, but not property taxes.
2. Aid for school districts is dependent on the mean household income and poverty rates in the district.
Categorical aid was distributed as a ‘flat grant’ or ‘matching grant’. Unfortunately, despite the evidence of some improvement, the categorical aid still did not meet the needs of schools and the challenge of district-to-district disparity of funding and tax income.
In the 1970’s there was a landmark case in California that was to set the tone for other states, creating a far-reaching impact on public education. The legal case, Serrano vs Priest, was argued on the grounds that the state’s public school finance system was unconstitutional. John Serrano, a parent of a Los Angeles public school student, took legal action against Ivy Baker Priest, the California State Treasurer at the time. Serrano claimed that the method of public education funding (district-to-district disparities) was failing to meet the requirements of the equal protection clause of the Fourteenth Amendment of the US and California Constitution. The Court agreed with the plaintiffs and the case was returned to the court for further proceedings. Since this landmark case all states have experienced similar court rulings, or there have been educational legislative reforms.
Following extensive court action on school equity, many schools began to implement schools finance equalization (SFE). The finance equalization reforms took two forms:
1. Foundation Aid – this was more moderate and the most common. Foundation Aid was very similar to categorical flat grants but it is based on per-pupil property values.
2. Power Equalization or Guaranteed Tax Revenue (GTR) schemes – the amount of state aid was dependent on both per-pupil property valuation and tax rates. The year 1973 saw further reforms in legislature for school financing, including the implementation of ‘negative aids’. Negative aids meant that the property-rich districts shared their tax revenue with the poorer districts. The 1973 legislative reforms brought into focus the concept of equalization. James H. Kaster (1979) in the Marquette Law review defines equalization as, “The process of ensuring the minimum tax base (the guaranteed valuation) for the support of education for each pupil in Wisconsin, so that school districts which spend at the same level will tax at the same rate”. One of the issues faced by Wisconsin in 1974-75 was that 58% of the cost of education was paid for by tax revenue. This was above the national average of 55%, which lead to frustration and unrest amongst taxpayers. In 1976 the ‘negative aid’ solution was declared unconstitutional by the US Supreme Court in the legal case of Buse vs Smith.

In 1993 a commitment was made by the state to provide two-thirds of partial school revenues in order to reduce the reliance on property taxes. The level of state support in 1993-94 was 48.4% and it had risen to 52.7% in 1995-96. In the same year, the Association for Equity in Funding (AEF) proposed new legislation to provide financial equity for all children and property taxpayers. The legislature made changes which committed the state to a substantial increase in equalized aids, but also imposed a per pupil revenue limit on school districts. This in turn allowed for higher spending districts to increase per pupil spending by a greater amount than lower spending districts. There were further amendments in 1995 when the formula was changed from two levels of funding to three. The latest change involved the inclusion of tertiary aids being added to primary and secondary aids. This change allowed for every district to become eligible for primary aid, minimum aids to wealthy school districts could be eliminated.

The years 1996-97 were significant years in the reform process of Wisconsin education. Firstly, there were changes to the tax structure in order to take the pressure off local property taxes. The state committed to funding two-thirds of school costs.
One of the major changes implemented in guaranteeing a viable curriculum and education was the implementation of the Student Achievement Guarantee in Education (SAGE) program. The main aim of SAGE was to improve student achievement via for identified school-improvement strategies:
• Class sizes of no more than 15:1 in grades K-3;
• Increased collaboration between schools and communities;
• Implementation of a rigorous curriculum;
• Improved professional development and staff-evaluation practices.

There was another legal challenge lodged in 1997 in the case of Vincent vs Voight. The plaintiff claimed that the school funding system was unconstitutional. However, Dane County Judge Richard Callaway ruled in favor of the state, despite a petition from 104 districts requesting a reversal of the decision. This same case made it’s way to the Wisconsin Supreme Court in the year 2000 where it was also found to be constitutional. The Wisconsin Supreme Court stated that, “Wisconsin students have a fundamental right to an equal opportunity to a sound basic education….that will equip students for their roles as citizens and enable them to succeed economically and personally.”

Over the past 10 years there have been raises in funding for public education in Wisconsin, and further attempts at equalization with limited success. In 2007 there was not any identifiable increase in general equalization aid, partly due to the fact that the budget was adopted very late. As a result 299 school districts lost more aid than their taxpayers gained in school levy credits. There was a general equalization raise in 2008-09 by $79.8M and a School Levy Increase of another $75M. Unfortunately this was followed by a decrease of equalization aid in the following year.

Statistics provided by the DPI in the 2013-2015 Biennial Budget Request (pg. 89-90) show that funding for students with exceptional needs has progressively decreased over the past two decades. The State’s share of funding for therapies, assistive technology, specialized instruction and other classroom accommodations has decreased from 44% in 1993 to 26% in 2013. Along with the funding cuts, the results from the Wisconsin Knowledge and Concepts Examination (WKCE) reading and math test are at very low levels.

In conclusion, Maher et al. (2007) state that, “The empirical analysis presented here indicates that Wisconsin’s most recent changes in educational finance have not reduced disparities in tax effort if one defines tax effort by property tax rates.” However, over the years it appears that Wisconsin’s education finance system has reduced disparity when it comes to per-pupil spending. Increased state aid has translated into increased spending in lower spending districts and tax relief in wealthier districts.

REFERENCES:

Wisconsin Board for People with Developmental Disabilities (2013). 2013 Priorities for People with a Disability in Wisconsin. Special Education Funding. From http://www.wi-bpdd.org/

University of Wisconsin-Madison (2013). Value Added Research Center. An Integrated Qualitative and Quantitative Evaluation of the SAGE Project. From http://varc.wceruw.org/sage/
Association for Equity in Funding (2013). Equal Educational Opportunity for All Children, School Finance History. From http://www.waef.net/history.cfm

Maher, C., Skidmore, M. & Statz, B. (2007). State Policy Consequences for Wisconsin’s School Districts: Spending Disparities, Finance, Formulas, and Revenue Restrictions. Wisconsin Education Finance Policy. Marquette Law Review. Milwaukee, Wisconsin.
Kaster, James. H. (1979). Uniform Education: Reform of Local Property Tax School Finance Systems Through State Constitutions. Marquette Law Review. Milwaukee, Wisconsin.
Simpson. W. Michael (2006). Historical Observation of Contradiction as Constitutional Law: Wisconsin’s First School Finance Equity Case and Reform Efforts to 1975. University of Wisconsin-Madison.
Board of Commissioners of Public Lands. Common School Fund / Normal school Fund. http://bcpl.wisconsin.gov/
Norman. J. PhD, (2002). Funding Our Future. An Adequacy Model for Wisconsin School Finance. Institute for Wisconsin’s Future. Milwaukee, Wisconsin.
Wisconsin Association of School Boards (2012). Wisconsin School Finance 101. From http://www.wasb.org/websites/communications/File/school_finance_101_web.pdf