The Wisconsin Department of Public Instruction (DPI) reintroduced the “Fair Funding for Our Future” plan as part of their 2013-2015 agency budget request.  I wrote positively before about DPI’s proposal and continue to think it is a thoughtful plan that merits serious discussion.

The most controversial part is the elimination of the school levy and first dollar tax credits.  It takes the funding for these credits, which are currently sent directly to municipalities to offset part of the local education tax levy, and puts them into school aids.  While on the surface it looks like the elimination of tax relief, putting the funds into school aids is still property tax relief.  Why?  Well, the plan does not eliminate revenue limits, meaning the total state and local revenue raised by school districts is controlled.  More state aid still generally means lower property taxes.

The proposal does, however, increase per-pupil revenue limits by $225 in year one and $230 in year two.  These increases are on par with historic increases (between 1994 and 2012 per-pupil revenue limits increased by an average of $226 annually) and will be a welcome sight to districts whose revenue limits went down in the previous biennium.

Perhaps the major difference under this plan is that while the school levy tax credit must be used for tax relief, more school aids could theoretically increase district level spending.  Local voters could vote to exceed revenue limits via referendum, offsetting the property tax relief function of increased school aids.  However, if you support local control, this should not cause you heartburn.

DPI’s proposal also increases per-pupil funding for students using the Milwaukee and Racine Parental Choice Programs, and for students attending independent charter schools in Milwaukee and Racine.  Choice per-pupil funding, which is tied to the percentage increase in general school aids, will be  $6,680 in 2012-13 and $7,041 in 2013-14.  Charter per-pupil funding, which is tied to the increase in per-pupil revenue limits, will be $8,000 in 2012-13 and $8,230 in 2013-14.

There are other logical elements to the DPI plan.  It establishes a minimal level of state funding ($3,000) for all pupils, incorporates poverty in the state aid formula (important for property wealthy districts that serve large amounts of low-income pupils, such as tourist towns), and includes a categorical aid to help high-performing schools share their practices.

Still the proposal is not perfect.  I’d prefer to see funding equity for choice and charter and less reliance on hold harmless aids (probably politically necessary but not great policy).  However, it is a thoughtful proposal and a good jumping off point.  Which is probably why it is already causing some grumbling on both sides of the political spectrum.