Commentary on Wisconsin per student spending trends – Madison spends far more than average

Wisconsin Policy Forum:

According to U.S. Census figures, Wisconsin relied on state revenues for over half of its K-12 per-pupil spending (54.3%) in 2018, compared to an average of 46.7% nationwide. In fact, aid to schools is the largest spending category in the state budget, comprising $6.0 billion (or 35%) of state general purpose revenue expenditures in 2019.

Moreover, although schools typically are funded by a mix of federal, state, and local revenue sources, the combined total of state and local revenues is particularly important in Wisconsin, which relies less on federal revenues than many other states. The vast majority of school district revenues (and therefore spending power) are controlled by state officials, who set both state aids to schools as well as state caps that effectively limit school property taxes.

This heavy reliance on state support and policies places Wisconsin’s schools in a comparatively precarious position even in the best of times. But attention to school finance issues is especially high right now, as the need to adopt and maintain balanced budgets in light of COVID-19 and its negative impact on state tax revenues will force policymakers to make difficult tradeoffs. Public school leaders are bracing for the possibility of state aid cuts as a consequence of these tough decisions.

Wisconsin K-12 spending has dropped relative to nation

To provide context, we analyzed public K-12 per-pupil spending data from the U.S. Census Bureau. The data include spending on operations such as instruction, general administration, transportation, building maintenance, curriculum development, staff training, and other functions. Debt payments and capital spending are excluded. Also, the data do not include public spending on private schools or charter schools authorized by nongovernmental entities.

We use per-pupil measures to compare state and national averages. As such, it is important to note that Wisconsin’s enrollment dropped by 1.8% between 2008 and 2018, while enrollment across the U.S. as a whole increased by 0.4% in that time. Even if spending is constant from one year to the next, the per-pupil spending figure will rise if enrollment falls and fall if enrollment rises.

In 2002, Wisconsin’s total spending per pupil was $8,574, placing its statewide public K-12 spending level about 11% higher than the national average and 12th highest in the nation. Since that time, the state’s ranking has fallen. By 2018, Wisconsin’s expenditure of $12,285 per pupil somewhat lagged the average nationwide ($12,612), and its ranking dropped to 24th. Among Wisconsin’s four neighboring states, only Iowa (27th) spent less per pupil in 2018.

Property taxes up 37% from 2012 – 2021.

MMSD Budget Facts: from 2014-15 to 2020-21
1. 4K-12 enrollment: -1.6% (decrease) from 2014-15 to projected 2020-21
2. Total district staffing FTE: -2.9% (decrease) from 2014-15 to proposed 2020-21
3. Total expenditures (excluding construction fund): +15.9% +17.0% (increase) from 2014-15 to proposed 2020-21
4. Total expenditures per pupil: +17.8% +19.0%(increase) from 2014-15 to proposed 2020-21
5. CPI change: +10.0% (increase) from January 2014 to January 2020
6. Bond rating (Moody’s): two downgrades (from Aaa to Aa2) from 2014 to 2020
Sources:
1. DPI WISEdash for 2014-15 enrollment; district budget book for projected 2020-21 enrollment
2. & 3.: District budget books
4. Bureau of Labor Statistics (https://www.bls.gov/data/)