When the state passed Act 10 in 2011, it did a few things. It pulled back state funding, but gave districts much more freedom to actively manage their budgets. The intent was that school districts would be prudent stewards of the taxpayers’ money to provide the best possible education for the kids. Act 10 also left in place the ability for local district voters to decide for themselves whether or not to raise taxes and spending in their district via the referendum process. And oh, did some districts take advantage of that process.

In the past few years, school districts all around Wisconsin have passed massive building and tax increase referendums. The end result is that taxpayers are taking on massive new debt and increasing taxed. In the past 13 months alone, school districts in Wisconsin have taken on about $2 Billion in new debt. That’s a lot of money.

School Districts have sold some of these referendum like used car salesmen (no offense to used car salesmen) by being deceptive or downright untruthful about the finances. For example, in Kewaskum, the school officials flat out refused to talk about the total cost of the referendum including the interest payments. They would only talk about the actual loan amount as if the interest was not paid with real money. Some districts are drawing out the loan payments for 15 or 20 or more years to pull down the yearly payments, but increase the overall cost. Almost all districts sold their referendums by the tax levy increase instead of talking about the total amount. You heard the rhetoric: “your taxes will only go up by a $100 and who can’t afford $100 for THE CHILDREN!?!?”

(I will give credit to the West Bend School District in their last referendum. Although I opposed it, I thought that their discussion and “selling” of it was, for the most part, honest and straightforward.)

The problem with the referendum process is that while it does give the local school district voters the ability to raise (or, theoretically, lower) their taxing and spending in the spirit of local control, it is not just the local taxpayers who foot the bill for that decision. In Wisconsin’s system of shared government, state taxpayers fund a portion of every school district in the state – some more than others. So when Milwaukee or Arrowhead school district voters decide to pass that massive referendum, the citizens of West Bend and Green Bay get to pay for part of it too. Shouldn’t local control also mean local cost? If a school district’s voters want to jack up their spending and taxes, why should people in other districts, who have made a different choice, have to pay for it?

This is the problem that Republicans have set out to reform in a series of of six bills. Some of the reforms are better than others, so let’s take a look at them as characterized in the Madison State Journal.

Bill #1:

Bill #6:

And a bill authored by Stroebel and Rep. Joe Sanfelippo, R-New Berlin, would provide 50 percent matching state funds for school districts that set aside money they receive under their revenue limits in a fund for maintenance and construction projects. If the district seeks a referendum within 10 years of using the matching funds from the state, the money is reimbursed to the state through a reduction in the district’s state aid.

I’m a little more uncertain on this one. While the goal is laudable in encouraging districts to save up and pay for new facilities with cash – the cheapest way to build anything – I am dubious about state taxpayers subsidizing it. Perhaps there are other ways for the state to encourage this prudent financial behavior?

It’s good to see the Republicans taking a serious look at this issue. In Owen’s perfect world, state school aid would not exist except in very targeted areas( like helping extremely rural districts) and every district would completely pay for itself. In that case, these kinds of laws would not be necessary and local voters would have full local control – with the full burden of the cost for their decisions. But as long as we have this Byzantine school finance system with a combination of state and local funds, the state voters have a vested interest in making sure local school districts are good stewards of the trust reposed in them.