The Losing Hand — Madison Schools and the State Budget

how-to-play-omaha-poker-1Susan Troller has a story — “Madison schools — the biggest loser” — on state and local school finance in today’s Capital Times.  I’m off to the “Books not Bombs” action being held in conjunction with President Obama’s visit this morning, so no time for extensive commentary.  Just some lengthy excerpts and a quick observation that although I miss the days when there were two daily newspapers and two reporters on the schools beat, I am glad to see the Cap Times doing some longer and bigger picture stories.  Read the whole thing.

When property tax bills go out in December, taxpayers will be hit with a $92 increase in property taxes on a $250,000 home, far higher than the modest $2.50 increase the board had predicted in May. Next year looks even worse, with a budget gap now predicted to be somewhere between $23 million and $25 million for the Madison school district, said Erik Kass, the assistant superintendent for business services. With the prospect of steep cuts in education as well as the potential for a new round of tax increases, the road ahead looks rocky.

What happened? How did a formula designed to “equalize” resources among disparate school districts in Wisconsin create some of the unkindest cuts for Madison, the state’s second-largest urban school district, with nearly half of its students qualifying for free or reduced lunch? And where was the help from powerful Democrats in state government who had championed school funding reform when they were the minority party in the Legislature?

The swift turnabout in Madison has left Madison School Board members bitter and exasperated. They’re deeply frustrated with the arcane shared-revenue formula that hits Madison especially hard and with 15 years of revenue caps that have forced school districts to pass budgets that couldn’t keep up with the rising costs.

As Arlene Silveira, Madison School Board president, puts it: “We’ve been talking for years about how this system is horribly broken, yet no one seems able to really step forward to change it.”

Madison, with 24,496 students, 47 percent of whom qualify for free or reduced lunch, will this year get just over $51.5 million in general state aid. The district got hit especially hard this time around because, unlike much of the rest of the state, its property values remained relatively stable despite the slump in the housing market. It did have some company in this regard. The Middleton-Cross Plains School District in Dane County, property-rich districts around northern Wisconsin lakes, and suburban areas in the greater Milwaukee area were also socked with the maximum 15 percent reduction in state aid because of their high property values.

But unlike many suburban districts with high property values, Madison has other challenges, including a significant population of low-income students, English language learners and children with disabilities. The cost to educate these children is high, partly because of state and federal mandates that describe in detail what’s required to provide an adequate education.

Unfortunately for Madison, the state general aid formula doesn’t account for these high-needs students when calculating who gets what. Meanwhile, the percentage of funding available from government through “categorical” aids targeted at these students has been steadily dropping for more than a decade.

Madison School Board members are feeling particularly stung by this year’s budget cuts because, the economy notwithstanding, they thought this year might be different. After years of Republican control of the Statehouse, not only were Democrats in control of the Legislature and governor’s office, but Madison-area lawmakers were in charge of the budget process. As co-chairs of the Joint Finance Committee, the Legislature’s powerful budget-writing panel, Sen. Mark Miller and Rep. Mark Pocan were arguably in the most powerful positions to influence the process.

But board members say they got little help from Democratic leaders, both on the specific problems surrounding the 2009-2010 budget and on broader questions about fixing the state’s long-term school funding.

“I understand that the economy is terrible, but for years we heard that the reason we had this school funding mess was because we had Republicans in charge who were basically content with the status quo,” says board member Marj Passman. “I had expected so much change and leadership on school funding issues with a Democratic governor and a Democratic Legislature. Honestly, we’ve got Rep. Pocan and Sen. Miller as co-chairs of the Joint Finance Committee and Democratic majorities in both houses! Frankly, it’s been a huge disappointment. I’d love to see that little beer tax raised and have it go to education.”

Adds Silveira: “There’s been a great deal of talk about the importance of education and improving the system but very little real action that really helps us do a better job of meeting both student needs and taxpayer needs.”

She says all local municipal officials bear a particularly heavy burden, forced to cut budgets and services and go back on their promises to hold the line on property taxes.

“By the time we found out about what a huge hit we were taking in aid from the state, we were already close to the end of our fiscal year and were locked into most contracts and programs for the school year. Basically, our hands were tied,” Silveira says. “The trouble with the politicians is that they tell us that they won’t raise taxes, but that we can. It puts us in a horrible position with our own community, which has been so supportive of our schools. It doesn’t seem fair.”

Although Pocan is sympathetic to the frustrations of Madison School Board members, he says he and other legislators must balance the needs of the entire state. He agrees with Silveira and others that the funding system needs a “complete overhaul” but says that kind of change would likely come with a huge price tag, which some school funding experts suggest could reach a billion dollars.

“Given the current economy, that’s not feasible,” he says. “I’d love to do something that helps Madison, but the system is so complex with 20 or 30 threads all together that if you just pull one, something else unravels.”

But when it comes to changing the law, little of substance has happened, reflecting the political difficulties of bridging deep divisions between what various school districts and communities want, as well as between various school stakeholders, from the teachers union to school board members to taxpayer groups.

Pope-Roberts has been involved with education issues, including funding reform, since she was elected to the Assembly in 2002.

She says Wisconsin’s current dismal economy constrains even those who are most committed to education and most dedicated to exploring a range of ideas.

“It’s very bad out there in the state. I think there may actually be some school districts that simply won’t have enough money to operate after this year.”

But Pocan and Pope-Roberts say they see glimmers of hope in some new, broad-based coalitions that are coming together to work on school funding reform.

For example, the School Finance Network includes representatives from the Wisconsin Association of School District Administrators, the Wisconsin Education Association Council, the Wisconsin Parent Teacher Association and the Wisconsin Alliance for Excellent Schools, among others.

Despite political differences that often put them at fierce odds in the past, as a group they agree that the current funding system is divisive, unsustainable and the reason many school districts lurch from budget to budget, with expenses rising faster than allowable tax increases.

In its literature, the network notes that education has a profound long-term impact on Wisconsin’s economy and, that, if current conditions continue, it won’t be long before a number of school districts will be insolvent.

Thomas Mertz, spokesman for the Wisconsin Alliance for Excellent Schools, says the state funding system also has the unintended consequence of dividing communities instead of bringing them together through their schools. “Under the current system, the state shifts much of the tax burden and the blame to the local level,” he says. “Yeah, it’s difficult for anyone to raise taxes in this economy but the current system is broken.”

Mertz, who teaches at Edgewood College and is a Madison district parent and longtime observer of public school issues, says his group of parents and concerned citizens is advocating for a sales tax increase – a program it describes as Pennies for Kids. While the proposal is not in a final form, he says he is hopeful the state Legislature will consider a 1 percent hike in the state sales tax.

“A penny boost in the sales tax would bring us in line with surrounding states and would provide $830 million a year in aid for education,” Mertz says.

The extra pennies would surely be welcomed in the coming years. With approval of the 2009-2010 budget under its belt, the Madison School Board is already beginning to focus on ways to address the larger shortfalls predicted for the following year.

And so are other districts around the state. The Milwaukee Journal Sentinel recently reported that some suburban districts in the Milwaukee area are already hearing from residents unhappy about double-digit increases in local tax levies, and are considering potential program changes like combining athletic teams.

Thomas J. Mertz

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Filed under "education finance", Budget, education, finance, Local News, Pennies for Kids, Pope-Roberts/Breske Resolution, School Finance, Uncategorized

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