Does anybody like how schools are funded? Republicans want change. Democrats want change. School districts want change. Choice schools want change. Whether you are a suburban, rural, or urban taxpayer, you are not satisfied.

Why is the formula not working?

• lopsided: Your property taxes and tax revenue from the state add up to a “revenue limit.” It is the biggest bit of funding each student gets, but the amount is different in each district. The gaps among districts are thousands and thousands of dollars!
• arbitrary: The state set revenue limits in 1993. Unfortunately, these limits were not based on student needs, local wealth, or fiscal responsibility. As a result, each student gets haphazard funding, and every taxpayer pays a haphazard rate.
• irresponsible: In many districts, passing a referendum increases not just local funding, but their state funding. That leaves less state funding for other districts unless the state increases its education spending.
• confusing: Your brain will melt if you try to understand your school taxes and funding. So, the state created multiple funding sources outside it: per-pupil aid, special-needs aid, transportation aid, rural aid. Wisconsin is the only state that does this.

WHERE WE COULD GO

While schools, legislators, and governors have never gotten on the same page at once, declining enrollment, a new Supreme Court, and greater state spending on health care may force school funding changes in 2027.

So, what could it look like? You must read the Wisconsin Institute For Law And Liberty’s and City Forward Collective’s proposals. Each student would receive a base amount, get a bonus for additional challenges like poverty or special education, and receive that amount whether they attend a district, charter, or private school.

Today, though, let us discuss the basics: how would a change affect your taxes?

Consider a revenue limit decided this way.

• $14,000 base per student, no matter what.
• $3,000 poverty assistance per free-lunch student.
• 50% special needs assistance per special-needs student.
• 0.7% maximum school property tax rate, unless a referendum passes.
• referenda are funded locally, not by the state.

In sports terms, that creates a “salary floor” of $14,000, a “soft salary cap” of ~$18,000 based on need, and a “luxury tax” for districts whose residents want to spend more.

Taxes and spending would be flat but fairer. Local funding would fall ~-$231,000,000, state funding would rise ~$437,000,000, and the average school property tax would fall from 0.705% to 0.678%. Wisconsin would spend ~$250 more per student, but a higher floor and smarter distribution would avert endless referendum requests.

What about school choice? A functional formula would allow charter and voucher students to receive fairer funding tied to their needs or home districts. Students in Milwaukee and Merrill could receive sufficient student support without significant costs to taxpayers.

But there is no magic solution, only tradeoffs. Wisconsin already has among the highest property tax rates and top income tax rates in America. Using 2025 numbers:

• Every $1,000 base increase costs ~$823,000,000.
• Every $1,000 poverty assistance increase costs ~$337,000,000.
• Every 10% special needs assistance increase costs ~$197,000,000.
• Every -0.1% school property tax rate decrease costs ~$866,000,000.

Changing the funding formula can slow down superfluous spending, give all communities a fair shake, and ensure students’ destinies are not determined by ZIP code.

But if we want students to succeed, we must do a better job with what we already have. I will see you next week with some of those solutions.

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