State Representative Mark Pocan met with the Madison Metropolitan School District Board of Education on Monday, November 30 to discuss “K-12 Funding in Wisconsin and the Impact of the State Budget on School District Finances.” (State Senator Mark Miller, who was also expected, was ill, Liz Stevens from his office attended in his stead). The short version of what transpired is that although Pocan brought Bob Lang and Dave Loppnow from the Legislative Fiscal Bureau as support, they were unable to “shut the lions’ mouths” and the Board got a few nips in. Beyond that, Pocan explained the intent and context of the budget “fix,” emphasized the importance of addressing revenue issues, gave some thoughts on school finance reform, defended parts of his record and more-or-less split the blame for everything bad between Governor Jim Doyle and the economy.
I have to give Pocan some credit and respect for facing the lions and for being very forthright and forthcoming. I’ll even go beyond that and say that when he was talking about what can and should be done and why, he showed understanding and that he cared. It was words, not actions, and I want action from my State Rep.. But at least he didn’t shut the door on action. Let’s help him open that door (more on that below, but think Penny for Kids).
You’ll have to rely on my memory and notes for the longer version, because as I anticipated, the meeting was not broadcast or recorded (Susan Troller, whose story inspired the meeting, was there for most of it, but I don’t think it is the kind of story that the Cap Times covers these days). That’s too bad, because some interesting and maybe important things were said.
Pocan began the meeting by asking to speak separately about the recent state budget and school funding in general (or what he refers to as “the formula”). This division was mostly followed, but the two cannot be absolutely separated. One big link between them, and an issue that came up again and again, was revenues. The recently completed state budget was made tough because of a lack of revenues; positive school finance reform requires adequate, sustainable and equitable revenue sources. Pocan said as much more than once.
The 2009-11 State Budget and the “Fix”
During the discussion of the state budget, most of the talk was about about the “fix” that came after the April revenue numbers called for further cuts. The fix included $147 million in cuts to school aids. This was dampened partially through an attempt to share the bleeding, by including provisions to limit resulting cuts to 10% for any particular district. Madison’s overall cuts came in at about 15% and people were not happy. According to Pocan, the 10% figure only applied to the new cuts caused by the $147 million loss and not the aggregate cuts from the entire state budget. Fair enough, and yes, some of the displeasure was due to a misunderstanding of this distinction.
But really this was, and is, a distraction. Most of the displeasure wasn’t about how the last round of cuts were handled. It really was about how much total money was invested in education; capital provided at levels well below cost-t0-continue; and a cut in state aid, while, at the same time, big property tax increases were passed on to many school districts.
On both the big picture and on the particulars of the “fix,” the issue is revenues. Pocan talked a lot about revenues, tax fairness and tax reform. He said good things. He made the point multiple times that if the discussion of taxation and revenues had been left to the Grover Norquists of the world, then public education, and much of the other good that government does, would continue to die the death of a thousand cuts; the “beast” will be starved. He’s right. It is happening everyday.
He also defended his record and the recent state budget by pointing to the tax increase on the highest earner bracket, the closing of the so called Las Vegas loophole, and some improvement on capital gains taxation legislation. All good and Pocan does deserve credit. Still, at the end of the day, our state was left with a budget that did not adequately fund education and other essential investments and is not sustainable. The thinness of the hopes Pocan expressed about the prospect of avoiding a budget reconciliation after the April 2010 tax collections — translate as more cuts — is sufficient evidence that he knows this isn’t sustainable.
Doyle No Friend of Education
It was on the topic of revenues that Pocan threw Governor Doyle under the bus, repeatedly. Most of this happened in the context of the budget “fix.” Because much of what Pocan described occurred in private conversations and the Caucus meeting where Pocan’s and Doyle’s position may have been discussed with other Democrats, and were closed to the public, we have only Pocan’s word to go on. Pocan’s version does agree with the public record (as far as that goes) and also explains Doyle’s contemptuous dismissal of calls for a more public budget process. I believe him, but continue to think that the more that public policy making occurs in public the better. Voters shouldn’t be left with any doubts about things this important.
The story, as Pocan told it, is that when the April, 2009 revenue shortfall happened, Doyle was in public and private talking about 5% or greater cuts in school aids (shared revenues for municipalities were also discussed, but this is an education blog so I’m leaving that out). Pocan said they (Miller, and maybe others implied, but Liz Stevens didn’t confirm that) met with Doyle and pushed to have new revenues as part of the fix. Pocan seemed to favor the expansion of the sales tax to cover services (what I think of as the Erpenbach proposal from a few years ago) and more action on capitol gains, but he may have also had other things in mind.
Shortly thereafter Doyle made a public statement that as far as he was concerned, revenues and tax reform were off the table as part of the solution. Pocan says that, as Doyle was making the statement, he became so angry that he called the Governors office to cancel their next scheduled meeting. Good for Pocan — at least in private he showed some backbone. It would have been nice if he’d showed it in public at the time.
As Pocan described it, the choices were limited. The possibility of overriding a Gubernatorial veto was nonexistent, so all they could do was negotiate. Apparently the 10% cut ceiling was part of these negotiations. The “balance” between state aid and revenue limits was also part of the negotiations.
Later, when asked by Board member Beth Moss about the lowering of the revenue limit increase — from $280 to $200 — that was also part of the “fix,” Pocan revealed that in exchange for a higher revenue limit, Doyle demanded at least a 4% cut in state aid; the $200 limit increase came with with only a 2.5% cut in state aid.
When Bob Lang joined the conversation to explain that the desire was to limit property taxes, Pocan stepped in to make a point that this was part of the Governor’s agenda, not the Democratic Party, and added, “The problem is when we take the Grover Norquist part of the debate we can’t talk about it …. tax fairness, … we need a civic debate about revenue.”
Pocan ended the exchange saying “Schools did way better than if the Gov had sole control.” Keep all this in mind next time Doyle prefaces his Race to the Top (RttT) inspired proposals with references to his record as a friend of education.
School Finance and Reform
From there it was on to a more general discussion of school finance. Pocan hit all the usual notes about the complexity of the system, how tinkering can create unintended consequences, how any change may have winners and losers, and the political difficulties of that, and made generally discouraging noises about the difficulty of real positive change. There wasn’t much new here, but there were some things I’d like to highlight.
First and foremost is Pocan’s championing of tax reform and the need to talk about revenues. This is great to hear. I do think he gets it, and expect to hear more from him on this in the coming months. I have some small hope that the talk will be linked to action.
Pocan spoke from the heart about the needs of students in poverty as well as the diverse needs of other students and displayed his understanding that any positive reforms must address these needs, either via categorical aid or a foundation plan. The positive duty to address the needs of these students highlighted in the Vincent v. Voight decision also makes this is a Constitutional matter. It is also the wise and right thing to do and it was good to be reminded that Representative Pocan knows that. This of course requires investments and revenues.
His repeated references to Andy Reschovsky were also heartening. I like Andy and think he is one of the best experts on taxation and school finance that Wisconsin has.
Pocan also expressed the view, held by many, that school finance reform needs to be done as a stand alone, not as part of the biennial budget process. That means that now is the time to get moving.
In response to Lucy Mathiak’s query about just that point — why isn’t there movement, if now is the time? — Pocan said that “The executive [Governor Doyle] has things stalled around the MPS restructuring.” I tell you, Doyle’s RttT lottery ticket purchase proposal is the gift that just keeps on giving.
School Board Members React
At this point Superintendent Dan Nerad and the Board asked questions and made comments and engaged in some back-and-forth with the guests. Before covering a little more of what was revealed, I’d like to offer some words from the Board to give the tone of their reactions.
Beth Moss — “This is difficult to swallow and really quite ridiculous.”
Lucy Mathiak — “I didn’t ask about the Executive level, I asked about you…somebody has to start.”
Marj Passman — “Show courage.”
Maya Cole — “What kind of economy are we growing…we have to invest in the future.”
Johnny Winston Jr. — “I’m disappointed, a couple of years ago when we were talking about closing schools, you sent us a letter and told us not to, that if the Democrats were to gain control you’d fix this … Madison is changing, has changed, and if we can’t afford to maintain schools and education it will keep changing till it is like Milwaukee … what do you tell a middle class family thinking about moving here when they ask about cuts to education?”
As I said at the top, they got some nips in and maybe broke some skin. Good for them.
Equalization, Equity and Tertiary/Negative Aid
There was a strange set of exchanges inspired by Ed Hughes’ complaint about tertiary/negative aid (whereby Madison and other high spending districts lose progressively more state aid the higher they spend). What was strange to me was that everyone seemed hostile or confused about the basic concept that this is a way to equalize educational opportunity across the state, that it is important that kid’s futures are not determined (or less prescribed) by where they live. I think how Wisconsin implements this policy could be improved, however, I retain my belief in the goals and ideals of this policy. There have been complaints about this for years; the complaints may be louder this year because the cuts in state aids have further exacerbated this and other flaws in our school finance system.
Of course, as Dave Loppnow pointed out, negative aid is also intended as a disincentive to raise property taxes. However, in practice, I’m not sure it works that way, because when a district like Madison goes to referendum, it includes these costs into their calculations and in fact asks for a higher amount, i.e. higher property taxes. This makes it harder to pass referenda, but they do pass and at higher amounts.
Loppnow also conjectured that because revenue caps already limit property taxes, this disincentive was not necessary. That may be true. But it is also true that the combined disincentives have not equalized spending and opportunities around the State. Something has to be in place to make sure the opportunities for kids in Whitefish Bay and Rhinelander are at least in the same ball park. That means either much more state aid via a foundation guarantee or some form of negative equalization.
Ed Hughes asserted that there was “no necessary connection between property value and willingness to spend.” I’m not sure this is true and intend to run some numbers — when I find the time — the Lake Districts and some others obviously support this idea, but in the aggregate it might not be the case.
Either Lang or Loppnow responded, in part, by saying that attempts had been made to use income instead of property wealth in equalization and that “it didn’t work.”
I’ve heard this from others, but have to ask: What we are doing now doesn’t “work” either, so what do you mean when you say it doesn’t work? Is this timidity and inertia or a real analysis?
This and That
A few more observations:
- Pocan repeatedly referenced “the group working on school funding reform” and obviously meant the School Finance Network but never referred to them by name.
- The levy credits only came up once and no one had anything to say about the the shift of $352,852,200 from general aid to the school levy credits — money that never goes near a classroom, but is counted by Wisconsin as “State Aid — a 26% increase in this budget bringing the total to $1,697,625,200 for the biennium. That’s school fiance reform of the worst sort and it was done in this past budget.
- Lang and Loppnow both offered their opinions and analyses on the political prospects for school finance reform. This isn’t their job. I don’t like state employees giving political advice about how difficult it is to change the system (the politicians don’t need any help with that). Stick to the fiscal matters.
- The Penny for Kids dedicated sales tax for education came up only once when Maya Cole mentioned it (thanks Maya!).
A Penny for Kids — Prospects and Action
Despite the relative silence on the topic, I left the meeting feeling a little better about the prospects of the Penny for Kids campaign (although not any better about the prospects of full comprehensive school funding reform in the near future).
I heard one of the legislative leaders say repeatedly that revenue options need to be on the table and advocated for. Penny for Kids is a viable revenue option, it is gaining support and nobody else is talking revenues. If Pocan was sincere, he has to give the proposal serious consideration and should give it his support.
I heard one of the legislative leaders speaking about the need to fund the education of children in poverty. Part of the Penny for Kids proposal creates and funds a categorical aid for low income students. The proposal also increases aid to other high needs students. If Pocan was sincere he should embrace these positive steps toward comprehensive reform.
Mostly I heard a legislative leader who was frustrated and looking for a way to help the schools, to do something he believes in (he was a bit defensive at times as well). Penny for Kids is a way to meet the crisis in education funding and move toward an equitable and sustainable educational investments. If Mark Pocan is looking, I think Penny for Kids is the best thing he is going to find, at least in the short term.
It isn’t easy to move elected officials from words to action. One thing that helps is a show of public support. You can do this in two ways (do both): First go to the Penny for Kids website and sign the petition; second, send Mark Pocan a quick email saying you support Penny for Kids and he should too. You don’t even have to explain why — he gets it.
Thomas J. Mertz
The 
AMPS 