New Report Finds Wisconsin School Districts Increasingly Relying on Funding Via Referendums

Tuesday, November 21st, 2023 -- 9:01 AM

(Hope Karnopp, Milwaukee Journal Sentinel) A new report finds Wisconsin school districts are increasingly relying on funding approved by voters through referendums.

According to Hope Karnopp with the Milwaukee Journal Sentinel, the report also questions whether the state-imposed limits on how much revenue a district can raise through taxes should get a fresh look.

It notes that the creators of the limits, which were set in 1993, likely didn't anticipate how often districts would have to use referendums to ask voters for permission to go over those caps.

"To me, it just makes total sense, especially after 30 years, to take a look and figure out what's working, what's not working," said Dale Knapp, the director of Forward Analytics, the nonpartisan research arm of the Wisconsin Counties Association.

While the success of referendums has fluctuated, it's become more common for voters to approve them in the last decade. The report looked only at operating referendums, which are different than ones for new buildings or facility improvements.

Between 1997 and 2010, 44% of all operating referendums were approved. Since 2010, that rate has increased to 76%. Throughout the entire time period, voters have approved 58% of more than 1,500 referendum questions. In this spring's elections, just over half were approved in 52 districts.

Districts have been able to explain to voters that the limits have been allowed to grow much more slowly since 2011, coupled with the challenges of inflation, Knapp said. Districts are also using temporary referendums more often, instead of permanent ones that historically have lower approval.

The vast majority of districts, 82%, have turned to a referendum at one point or another in the past three decades. While most districts have used referendums three times or less, about 20% of districts have gone to voters six times or more.

Districts with declining enrollment are more likely to go to referendum and get them approved. Districts with declining numbers of students have approved 62% of their referendums, compared to 53% of growing districts.

Using household income as a measurement, poorer districts were also more likely to approve referendums. The poorest 10% of districts approved about three-quarters of referendum questions since 2005, compared to 62% of districts in the top 30%. Out of Wisconsin's 421 school districts, 258 are using dollars approved through referendum to fund education this year. That's just over 60%.

In 2022, funding approved by referendum accounted for 5% of total school revenue statewide, or about $650 million. That's more than the $517 million schools received from the state to help them pay for special education costs. But money approved by voters accounts for much more in some districts.

Last year, 100 districts used referendum dollars to cover more than 10% of their total costs, a number Knapp found the most surprising. School districts go to referendum in order to raise more than their caps set by the state, which were created in the early 1990s amid concerns over rapidly rising property taxes.

Knapp suggested lawmakers could assess what components are working and which are not, especially for districts with declining enrollment. But he acknowledged that the biggest obstacles to improvement are political.

Supporters of revenue limits note they rein in tax increases and give local taxpayers a say in education spending. Critics point out lawmakers don't increase the caps every year, which are especially hard on small districts.

And while Wisconsin districts could soon see increases to revenue limits, there's still uncertainty involved. This summer, Democratic Gov. Tony Evers used a creative budget veto to raise the caps by $325 per student, per year for the next four centuries.

That move could be undone, though, if Republicans in the Assembly successfully override it. The Senate already took that move in September. If the increases stay, "you're going to see fewer districts going to referendum," Knapp said, but "inflation is going to start eating at that number."

As part of a compromise this summer, lawmakers also included increases for about half of districts that have been limited to the lowest amount: under $11,000 per student. One group of districts is locked out of those increases for three years because they held a failed referendum.

A bipartisan bill to remove that restriction passed the Senate 31-1, though the Assembly hasn't yet voted on it.

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