Since the beginning of the COVID-19 pandemic, enrollment in Wisconsin schools has dropped by more than 3%, with some districts suffering even greater declines. But an antiquated school funding system means that Wisconsin taxpayers are still paying for students that are no longer in the system. Wisconsin uses what is known as the “Three-Year Rolling Average” to count students for the purposes of calculating school district revenue limits. Under this system, three years of enrollment data are used in calculating how much money the district is able to collect from state and local taxpayers. In an era of rapid enrollment declines across Wisconsin, this system means that substantial amounts of funding are misallocated to districts for students who no longer attend school in the district. This paper attempts to quantify just how costly this is for Wisconsin taxpayers, and offers some alternatives.
The “Three-Year Rolling Average” is an antiquated system of school attendance, costing taxpayers millions. These days, we know where each student is every day in Wisconsin. Our school funding system should reflect that rather than being years behind.
Statewide, Wisconsin funds more than 20,000 “ghost students,” children outside of the school system who are still counted as being enrolled. Statewide, a net of about 20,703 students who are no longer in the system are funded by state taxpayers.
More than $359 million dollars is misallocated to “ghost students” in Wisconsin.
Due to the three-year rolling average, Wisconsin taxpayers are on the hook for hundreds of millions for students that no longer exist in the school system.
Our report outlines a pathway for a better system. Wisconsin should move to a more dynamic funding system that funds students where they are rather than where they used to be. Student counts should be updated more regularly and funding should be based on those amounts.
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