Education finance and student proficiency in Wisconsin

In the summer of 2022, AEF commissioned a study to help us make the case for revenue limit equity. The author was Dr. Jesse Rothstein, Carmel P. Friesen Chair in Public Policy at the University of California, where he is also Professor of Economics. He previously served as Chief Economist at the U.S. Department of Labor and as Senior Economist with the Council of Economic Advisers, Executive Office of the President of the United States. Rothstein’s recent work includes studies of teacher quality and school finance.
Rothstein received a Ph.D. in economics and a Masters in Public Policy, both from the University of California, Berkeley, and an A.B. from Harvard University. He is a member of the editorial boards of Education Finance and Policy, and the National Education Policy Center.

Rothstein’s conclusions include:

*Revenue Limits have persisted over decades–districts at the low end of the revenue limit system in 1993 are almost all still at the low end, making some districts well behind in cumulative funding.
*Revenue Limits are closely tied to spending and loosely to family income
*There is little or no correlation between revenue limits and Forward score most likely because there are many factors that go into achievement
*Higher Revenue Limits are correlated with post-secondary enrollment

In addition, Rothstein performed an analysis of the impact of addition spending on a single middle school demonstrating the higher achievement that is likely in this scenario.

Dr. Rothstein was interviewed on the AEF YouTube Channel. You can read the complete study here and view the cited figures here.

Wisconsin School Funding and Student Outcome: Systemic Roadblock to Opportunity
This study demonstrated that the system funding the education of our children actually contributes to inequity of educational opportunity.

 

Reschovsky Presentation on School Property Tax Relief dated January 19, 2012
Dr Reschovsky shared his slides with us. Several slides show the results of his study on School Levy Credits that help to illustrate our concerns about their inequitable distribution. Presentation made to the AEF Membership at its Annual Meeting on Thursday, January 19, 2012.

 

Reschovsky Research Paper on Levy Credits
According to Andrew Reschovsky’s study of the levy credits, only 51% of the total school levy credit reduces property taxes of WI homeowners on their primary residences. He found further that 9% of the levy credits go to WI 2nd homeowners and 26% go to non-WI owners of 2nd homes in WI. The balance of 14% goes to tenants. Here are his findings, “Property owners in the poorest school districts (in terms of property wealth) received an average credit equal to $375 per student. The size of the average credit going to taxpayers in school districts with higher levels of property wealth per student increases with district wealth. Property owners in the state?s 21 property-richest districts received average per student credits of $2,596, nearly seven times the average credit going to taxpayers in the poorest school districts.” Another of Reschovsky’s findings was that homeowners with higher incomes tend to live in more expensive houses suggesting that higher levy credits are going to taxpayers with higher incomes. Reschovsky concluded that not only should the levy credit programs be discontinued and applied to direct school aids, but that the Homestead Tax Credit Program, which steers tax relief to those WI residents most in need, regardless of school district, should be enhanced. The complete paper is available here.