Every year the state tells school boards the maximum amount of funding they can raise via their property tax levy. After their receive this information boards must make a choice, do they:
- Tax to the max;
- Set the levy below the maximum amount; or
- Ask the voters for permission to exceed the maximum levy?
Earlier this month I examined the characteristics of Wisconsin school districts that under-levied – those that raised less education dollars from local taxpayers than they were allowed. The only real differences I found between districts that under-levied and those that taxed to the max was in size, (tax to the max districts were smaller), and state support (tax to the max districts received a comparably smaller percentage of state aid). Today’s post takes a look at the districts that successfully passed referenda to exceed their maximum allowable tax levy, or revenue cap.
Since November of 2008, voters in 83 of Wisconsin’s 424 school districts have voted to allow their school district to exceed its revenue cap. The reasons school boards went to voters are varied. Many districts asked for additional general operating funds, others had specific projects in mind, and others wanted to refinance debt. The vast majority of districts asked for a one-time exception, meaning the revenue cap would return to where it would have been without the one-time exception in the following year. A handful asked for a recurring exception, meaning future revenue caps would be calculated off the now higher base.
So what should we expect districts that pass referenda to look like? One possibility is that they serve more disadvantaged groups and feel they need more money do so. Not so. Districts that passed referenda and those that did not look demographically similar; both groups serve similar percentages of low-income, special needs, and minority pupils.
Another possibility is that wealthy districts, by virtue of having a stronger tax base, are more comfortable asking their voters for more funds. Also not so. The per-capita income in both groups is pretty similar, as is their level of state support (which is an indicator of district property wealth).
The one major difference I found between the two groups was size. Districts that passed referenda served an average of 1,402 pupils. Those that did not served an average of 2,198 pupils. The districts that passed referenda were also much more likely to be rural.
It is just informed speculation, but both of these differences suggest that economies of scale is an issue in Wisconsin school finance. Smaller rural districts are the ones asking for, and receiving funds in excess of what the school aid formula determines they are entitled to.
I plan on digging more into this topic in the near future, specifically exploring differences between districts that pass recurring and non-recurring referenda, and the characteristics of districts that attempt and fail to pass referenda.