From Larry Miller’s blog:

July 5, 2010

Many Wisconsin School Districts Hit Hard By Economy

State aid to schools expected to drop

Eleven local districts will receive more than 10% less funding

By Amy Hetzner of the Journal Sentinel July 1, 2010

General state aid is expected to decrease for more than half of the school districts in metropolitan Milwaukee for the 2010-’11 school year, according to projections released Thursday.

Eleven of the 50 public school districts in the four-county area will likely receive at least 10% less general aid than they did in 2009-’10, numbers released by the state Department of Public Instruction show. In contrast, only one school district – the Richfield School District in Washington County – expects an aid boost exceeding 10%.

General state aid is the largest source of funding for K-12 public schools in Wisconsin, and it includes the $4.65 billion provided to reduce spending disparities between rich and poor districts.

Statewide, more school districts are expected to lose state aid than make gains in 2010-’11, even though the state budgeted the same amount as the year before. About $2.84 million less is available to the districts because of payments to certain charter and voucher schools, according to DPI spokesman Patrick Gasper.

For some districts, this coming year’s aid loss is nothing new. Seven of the school districts in the Milwaukee area that expect to lose 15% of their aid in 2010-’11 had similar losses the previous year when the state cut $147 million from the formula.

General aid to Milwaukee Public Schools is set to drop about $1.87 million, or about one-third of 1% of the amount the district receives from the state.

Taxes likely to rise

What school districts don’t receive in aid, they can make up by raising local property taxes to the limit set by state-imposed revenue caps.

“Taxpayers are going to be pretty mad,” said Jeff Gross, director of business services for the Menomonee Falls School District, where a projected $1.93 million loss in aid is the largest in the four-county area.

Gross said his district estimates a 5.6% increase in its tax levy, even though its overall revenue will rise by only $50,000.

“Last year, we did all we could to keep it under a 10% levy increase,” he said. “This year won’t look as bad, but it’s another hit.”

Under the state’s complex system of distributing equalization aid, a number of factors can cause one school district to receive more aid than another. Districts losing students might not only receive less aid because they’re educating comparatively fewer students but also because their property wealth per student goes up as a result.

Spending rates also can play a factor, depending on whether a district is considered a high- or low-spending district.

State Superintendent of Public Instruction Tony Evers said last week that he would push for legislative changes to the state’s complex funding system, changes that he would detail this fall in his budget proposal to the governor.

Although the numbers released Thursday are only estimates – final aid amounts are not certified until October – school officials say the state projections are fairly reliable.

Based on those projections, the Oconomowoc Area School District is revising its anticipated levy increase for the coming school year down to 4.4% from an earlier 7.3% estimate.

The reason is an anticipated increase in state aid to 9.45%, the second highest in the metro area. After four years of 15% losses, assistant superintendent Mike Barry said the news is a welcome change.

He pointed to a drop in value for lakeside property and a 2% enrollment increase as the main reasons for his district’s expected aid gain for 2010-’11. “By that measure, OASD is less wealthy than in the prior year and therefore eligible for a greater amount of state aid,” Barry wrote in an e-mail.

The New Berlin School District is one of the unlucky districts in the area, on the other hand, anticipating it will lose 15% of its aid for the second year in a row.

After years of trying to get taxes under control, the New Berlin School Board has tentatively approved a 6.2% tax levy increase for the coming school year that will earn back some of the aid lost in the last two years, said Roger Dickson, the district’s director of financial services.

The main reason the board approved the increase is because of the district’s need to address its growing pension liabilities, he said. In the meantime, the board has issued layoff notices to 29 employees to try to curb costs.

“We’ve done a number of other strategies to try to reduce the impact, but it’s just the reality of the situation that we’re in right now,” Dickson said.