Background Case Studies

A tale of two districts


The School Finance Network plan targets more general state aid and categorical aid for all schools districts across Wisconsin. Here are two typical scenarios describing the changes for a small, rural district as well as a large, suburban district, in a recent school year.
 

The Rural District


District A represents a small, rural area with a declining student population, more than a third of whom receive free or reduced lunch. With the School Finance Network plan, District A would benefit greatly from enhanced categorical aid earmarked for the 39% of its students on free or reduced-lunch programs. All told, the SFN proposal, compared to the current school funding formula, results in more than $622,000 in new money for District A, a 17.9% change.

 
  Current formula SFN proposal
State aid $3.1 million $3.4 million
Categorical aid $340,000 $691,000
Total aid per student $6,200 $7,300
 

The Suburban District


District B represents a wealthy, suburban area with far fewer students receiving free or reduced lunch in comparison with District A. It has 6,142 students, 18% of whom are on subsidized lunch programs. The district still will make gains under the SFN proposal, adding $5 million more than the current formula, a 15.5% change, due to increases in both categorical and general state aid.
 
  Current formula SFN proposal
State aid $28 million $31 million
Categorical aid $3.9 million $5.8 million
Total aid per student $5,200 $6,007
 

How taxpayers are affected


The SFN plan controls local property taxes by increasing general aid from the state and reducing local burdens. Due to increases in state aid, District A, which is more highly aided than District B, would experience a 9.8% reduction in local property taxes, and District B would see a 5.8% reduction in local tax money used to run the schools.  
 

Targeting categorical aid


The School Finance Network proposes increasing categorical aid for children with disabilities and special needs, for small, rural school districts, and for low income students — making the system more equitable while ensuring that all children have the opportunity to learn.    
 
The proposal also reconfigures how annual per pupil increases are calculated, moving them from $264 to $350 in year one, and then tying future increases to overall statewide economic growth. The new system is more effective in aligning school district revenue with annual costs.
 

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Every district gets more funds

 
No district loses money under this plan because it builds on existing funding levels and does not re-shuffle money within the current system. Some districts, however, do receive more aid than others.  This is because new aid is primarily based on need — those districts with more high-cost students will get more aid from the state. In this example, District A — with a higher percentage of students on free and reduced-lunch programs, receives more categorical aid than District B. Both districts, however, receive more for education funding and would rely less on local taxes.