State-sanctioned inequity: Special education funding gap fueling rise in district operating referenda across Wisconsin

Contact: Senator Chris Larson
T: (608) 266-7505
E: justin.bielinski@legis.wisconsin.gov 

 

May 7, 2024

 

~~~FOR IMMEDIATE RELEASE~~~

 

Milwaukee, WI - If you live in Wisconsin, there’s a pretty good chance you’ve been asked to raise your own property taxes to fund local schools at some point in the past decade. All told, there have been 1,077 public school referenda on ballots across the state since 2015, including 103 in spring 2024 alone. The listed reasons run the gamut from building improvements to deferred maintenance on aging facilities, teacher pay to simply keeping the lights on. 

 

Underlying all of these, however, is a little-known feature of our school funding formula that favors private schools at the expense of taxpayer-supported, constitutionally-guaranteed public education. It has to do with how we fund services for kids with special needs.

 

Currently, public schools receive a base reimbursement rate for special education services of 33%. When all types of aid are included, this leaves districts across Wisconsin with about 60% of their special education costs unreimbursed, for a $1.2 billion shortfall in the 2022-23 school year alone.

 

Meanwhile, private schools participating in the Special Needs Scholarship Program, which served just 2,217 students that same year, are guaranteed a 90% reimbursement rate. Statewide, there were over 122,187 students with special needs in ‘22-23, as indicated by those with Individualized Education Plans (IEPs).

 

Just how big of a problem is this, and what does it have to do with the rise in school referenda? To find out, we took the 68 districts with operating referenda on spring 2024 ballots and matched up the amount of the operating referenda with the unreimbursed special education costs for the 2022-23 school year (the most recent year available). What we found was staggering:

 

  • Unreimbursed special education costs were equivalent to 63.8% of the annual dollars sought via operating referendum in those 68 districts
  • In 16 districts, unreimbursed special education costs accounted for 100% or more of the annual operating referendum amount
  • Two-thirds of districts with operating referenda had unreimbursed special education costs equivalent to at least half of the annual referendum amount
  • 57.0% of the recently-passed Milwaukee Public Schools referendum ($143.5 million out of $252 million) can be attributed to unreimbursed special education costs

 

This is not sustainable. People support their public schools, but there are limits to how much they are willing to raise their own taxes. Where referendum passage rates once topped 80%, less than 60% passed this spring, for a total of $1.0 billion. With a multi-billion state budget surplus, there’s no reason this should happen here in Wisconsin.

 

It’s time the Republican-controlled legislature called a special session to use some of our surplus to bring public schools into parity with private schools by guaranteeing 90% sum-sufficient reimbursement for special education services in our public schools. In his most recent proposed state budget, Governor Evers recognized the inequity in Wisconsin’s special education funding formula, and put forward a plan to get us to 60% reimbursement, while paving the way for 90% in future budgets. To their great shame, Republicans rejected Evers’ proposal.

 

A Legislative Fiscal Bureau (LFB) memo requested by this office estimates that the annual state cost of bringing public schools into parity with voucher schools (a 90% reimbursement rate) would be $969.6 million above current law, based on preliminary 2023-24 data. LFB previously estimated that the state will end the 2023-25 biennium with a $3.25 billion surplus, so this critical investment could be achieved without cutting other important priorities. Instead of relying on the more regressive property tax levy, shifting these costs to the state would spread the burden more evenly among wealthier individuals and businesses who benefit greatly from a well-educated workforce.

 

May 6-10 is Teacher Appreciation Week. The time is now to support their work serving all Wisconsin students. Our kids deserve it!

 

To view the entire list of districts with Spring 2024 operating referenda, the annual amount sought, and the district’s 2022-23 unreimbursed special education costs, CLICK HERE. Data sourced from Wisconsin Department of Public Instruction (DPI)