A Funding Choice: Mixing Public & Private School Funding
In 2015, Wisconsin changed how it funds two private school choice programs. This report, A Funding Choice: Mixing Public & Private School Funding, takes a closer look at this important issue. Find a district-by-district supplement to the report here.
The Racine and statewide programs were once paid for from a separate state appropriation. However, since the 2015-16 school year, new enrolling students are now accounted for in two public school formulas:revenue limits and state equalization aid. The state then deducts the payments for these programs from the aid dollars of the public school district in which the student resides. The deducted amounts are then used to pay for the programs. The state also created the special needs scholarship (SNSP) program and expanded the independent charter school program. Both are funded in a similar way. While the effects of this new funding method were small early on, they have grown significantly. One impact in 2024-25 is $337 million in higher school property taxes.
School funding is extremely complex. The current funding system adds another layer of complexity, which, among other things, “hides” the impacts. The bottom line is that the current system replaces the aid deduction for the cost of these programs with property taxes. It also changes the distribution of state equalization aid resulting in “hidden” property tax shifts for districts with no students in these programs.
To understand the total impact of this funding, a simulation of school revenue limits and state equali- zation aid was conducted, removing these students and their costs from the 2024-25 calculations. The results of this “decoupling” were then compared with 2024-25 actual revenue limits, equalization aids, and property taxes for each school district.
The simulations show that for nearly all districts, a decoupling would have no impact on the amount of revenue available for their students. For some it would mean more and for a few it would mean a decline of less than 1%.
A decoupling would also mean a property tax reduction for 407 of 421 districts, with 293 of them seeing a cut of at least 5%. Thirteen districts would see no change. Due to its large number of independent charter students and its low per student revenue limit, the maximum allowable property tax levy in Beloit would increase approximately 3%.
While decoupling would benefit property taxpayers significantly, it would have cost the state $343 million in the current fiscal year. That amount will likely grow in subsequent years.
See the latest Forward Analytics report here: A Funding Choice: Mixing Public & Private School Funding. Find a district-by-district supplement to the report here.