Advertisement Faced with a $6.6 billion state budget shortfall, Gov. Jim Doyle and Democrats on the Legislature’s budget committee have proposed cutting state aid to schools and tightening limits on their property tax increases. They have repeatedly said that, on average, federal stimulus money flowing to schools will make up for the added pain from the state.
But the federal money will fall short of offsetting the proposed state cuts for many districts because it comes with strings attached and is distributed through different formulas, experts said.
The possible cuts come on top of other proposed changes to school finance, including ending an effective 3.8 percent cap on teacher pay and benefits in July 2010.
“I think you can argue that this is the worst state budget for public schools in a generation,” said Todd Berry, president of the Wisconsin Taxpayers Alliance, who said a few districts may have to consider closing.
UW-Madison economist Andy Reschovsky said the Madison School District could see a net cut in aid of $4.1 million, or 4.6 percent, possibly forcing program cuts, teacher layoffs and big increases in property taxes. His analysis, which is less precise when looking at any single district, suggests the falling aid could set up Madison schools to raise property taxes by up to 7 percent.
Stimulus math
Over the next two years, the state would cut direct aid to schools by nearly $300 million under a budget proposal that still must be approved by the Assembly and Senate and signed by Doyle. Over that period, the federal government is expected to pump $350 million in stimulus money directly into schools through two main streams. The money would mainly have to be used to help poor and special education students.
Doyle’s budget director, Dave Schmiedicke, noted the budget uses some additional stimulus money and $55 million in state money not included in Reschovsky’s analysis to offset part of the increase in property taxes.
“Are there going to be challenges for districts? Yes, there will be,” he said. “But there continue to be increasing resources for schools.”
Reschovsky used a complex computer model to map out the effects of slicing state aid and boosting federal aid on individual school districts. He tweaked the numbers after showing the model to officials with the state Department of Public Instruction, he said.
The analysis found:
“What we’ve been hearing from the administration and the Legislature is that, yes, state aid will be cut but it will be more than made up for by the (stimulus),” Reschovsky said. “But it’s only part of the picture.”
Mike Thompson, executive assistant at the Department of Public Instruction, said his agency wouldn’t put out its estimates of cuts in state aid to districts until July 1.
The state limits the revenues school districts can raise from state aid and property taxes together, meaning that cutting state aid increases how much a given district can raise property taxes.
Dale Knapp, research director for the Taxpayers Alliance, said many districts could end up having to raise property taxes by 5 percent to 7 percent.
Craig Gerlach, superintendent of the Monona Grove School District, said he’s anxiously waiting to hear what his district will receive in state aid.
Reschovsky’s model shows Monona Grove doing relatively well, but Gerlach said Monona Grove still will face tough choices.
For instance, his district will receive $773,000 in federal stimulus money. But the district can only use about $310,000 of that to make up for the diminished state aid — the rest must be used for new programs for special education and poor students.
“We’re going to have some serious decisions to make,” said Gerlach, who expects his district could be forced to lay off staff next year. “If nothing changes, I don’t believe we’ll have a choice.”
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