School Finance History

1848 – The Wisconsin Constitution provides in Article X, Section 3, that “The legislature shall provide by law for the establishment of district schools, which shall be as nearly uniform as practicable….”

1949 – State policy determines that “…the state must guarantee that a basic educational opportunity be available to each pupil…” and “…the state should be obligated to contribute to the educational program only if the school district provides a program which meets state standards.” The 1949 legislature provides for distribution of both equalization and “flat” aid. A district not eligible to receive equalization aid receives flat aid; i.e., a fixed amount per student.

1973 – A complete tax base equalization program is enacted that provides a much higher appropriation of equalization aid to relieve local property taxes; discontinues general flat aids; institutes a power equalizing program providing for “negative aids”; and separates the shared cost into primary and secondary levels with a two-level system of state aid in which school costs which exceed the statutory ceiling of aidable costs are supported at a lower level of state aid to serve as a disincentive to high levels of spending.

1976 – The Wisconsin Supreme Court declares recapture of local excess property taxes unconstitutional. Consequently, Wisconsin’s general school aid equalization program is no longer considered a true power equalizing program because districts having the same cost per student are not required to levy the same tax rate.

1992 – The Association for Equity in Funding (AEF) is formed to promote financial equity among public school districts on behalf of all pupils and property taxpayers. At the time, AEF members indicate that legal action should be pursued if significant progress toward financial equity is not accomplished during the 1993 legislative budget session.

1993 – AEF proposes legislation to eliminate the disequalizing factors and provide financial equity for all children and property taxpayers. The 1993 legislature substantially ignores the AEF proposals and increases the disequalizing factors in two ways:

  • First, it expands the special adjustment aid, broadens the eligibility requirements, and diverts funds from the equalized aid appropriation to pay for that expansion.
  • In addition, it imposes per pupil revenue limits on school districts which allow higher spending districts to increase per pupil spending by a greater amount than lower spending districts.

As a result, despite a substantial increase in equalized aids, the actions of the 1993 legislature allow absolute spending disparities per pupil to widen.

1994 – While continuing to work in the legislature, AEF retains legal counsel to study the feasibility of challenging the existing school finance system’s constitutionality. That study indicates that such a suit probably would be successful.

1995 – In January, AEF members vote unanimously to “prepare and organize” for litigation. In July, the 1995-97 state budget (Act 27) increases state aids and levy credits to 2/3 of partial school costs. The budget, however, does not adequately resolve several equity issues, such as the distribution of equalized aid, school levy credits and categorical aid; the impact of revenue limits; and the identification of student needs. On October 12, the class action suit, Vincent vs. Voight, challenging the constitutionality of Wisconsin’s school finance system, is filed in Dane County Circuit Court.

1996 – The Legislative Council of the state legislature creates a Special Committee on the School Aid Formula. The Committee is directed to study the state school aid formula and related aspects of school finance and recommend appropriate adjustments.

1997 – Action both at the legislative and judicial levels. After several hearings involving testimony from dozens of interested people, the Legislative Council Committee on the School Aid Formula recommends several actions, including phasing out the school levy tax credit over six years, establishing new aids for low-income students, and protecting districts with declining enrollment. None of these actions, however, were approved by the Legislature.

Dane County Circuit Judge Richard Callaway rules in favor of the state in Vincent v. Voight, finding the school funding system constitutional. In his comments, however, judge Callaway says he recognizes that schools have “grave pressures” and notes, “the Court does not doubt that these problems have a serious adverse impact on the education received by many of Wisconsin’s children.”

The 104 districts file a petition with the Wisconsin Supreme Court requesting a reversal of Judge Callaway’s decision. The districts call attention to the July ruling, which said that unless there was “clear guidance from the Supreme Court, the legislature, potential litigants and the lower courts will be left groping through more unfocused litigation every time a new budget is created.” The petition to have the case heard by the state Supreme Court – which would have saved time and money for all involved – is denied as premature and appeal briefs are prepared.

1998 – The Fourth District Court of Appeals hears oral arguments on Vincent vs. Voight and upholds the trial court decision. AEF is reorganized as an Unincorporated Association and appoints an executive director.

1999 – The Wisconsin Supreme Court decides to review Vincent vs. Voight. AEF expands it membership to individuals and additional school districts.

2000 – The Wisconsin Supreme Court finds our school finance system to be constitutional. The Court also holds that “Wisconsin students have a fundamental right to an equal opportunity to a sound basic education … that will equip students for their roles as citizens and enable them to succeed economically and personally.” The Court specified courses to be provided and required that “…districts with disproportionate numbers of disabled students, economically disadvantaged students, and students with limited English language skills…” be taken into account.

2001 – The biennial budget enacted for 2001-02 and 2002­ 03 ignores the new educational standard.

2002 – The budget review bill enacted for 2002-03 ignores the new educational standard.

2003 -The biennial budget enacted for 2003-05 increases the low revenue ceiling per pupil to $7,400 in 2003-04 and $7,800 in 2004-05. The Governor creates a Task Force on Educational Excellence and gives it a broad charge including a review of how the state funds K-12 education.

2004 – The Governor’s Task Force on Educational Excellence completes its work. The Legislative Council considers, but does not approve, a legislative study of school finance.

2005 – The governor’s vetoes prevent a major reduction in school district revenues. The low revenue ceiling is increased to $8,400 for 2006-07.

2006 – School finance is being reviewed by the University of Wisconsin Consortium for Policy Research in Education and a Special Committee of the Legislative Council. Simultaneously the numerous education groups (American Federation of Teachers, Association for Equity in Funding, Fair Aid Coalition, School Administrators Alliance, Southeastern Wisconsin Schools Alliance, Wisconsin Alliance for Excellent Schools, Wisconsin Association of School Boards, Wisconsin Association of School District Administrators, Wisconsin Education Association Council and Wisconsin PTA) are attempting to develop a common agenda to address problems with the school finance system.

2007 – No increase in general equalization aid is provided for 2007-08. Because the state budget was adopted so late, the originally intended increase of $79.3 million was shifted to the school property tax levy credit. As a result, 299 school districts will lose more aid than their taxpayers will gain in school levy credits.

2008-09. General equalization aid increases by $79.8M while School Levy Credits increase by another $75M for a total of $747.4M and the First Dollar Levy Credit is introduced for $75M.

2009-10. General equalization aid decreases by $140.3M while the First Dollar Levy Credit increases by $70M.

2010-11. General equalization aid remains the same while the First Dollar Levy Credit increases by $4.6M.