1. AEF is a group of Wisconsin school districts seeking financial equity in the state school finance system. Members include urban districts such as Green Bay and Beloit, and small, rural districts like Algoma, Cornell, Seneca, and Tigerton. The two issues that brought this group together and have kept it together for over 15 years have been the wide differences in the amount school districts have been able to invest in the education of their children and the even wider differences in the property tax burden to pay for that investment. www.waef.net

2. AEF Activities Advocating - Meetings (DPI, Legislators, Governor) - Letters – Governor - Resolution Campaign – Levy Credits Newsletters Website: www.waef.net

3. Updated Legislative Proposal Problem - Inequities Proposed Solutions

4. School District Comparisons School District Local Property Value/Pupil (2010 Aid Data) 2009-10 Comparable Cost per Pupil 2010-11 Equal Aid/ Pupil 2009-10 Tax Rate 2009-10 Levy Credit/ Pupil Beloit Poorest K-12 $210,254 $12,365$7,977$8.24 $340 Gibraltar Wealthiest/Lowest Taxing $6,272,303$17,897$18*$2.71$2,701 Elmwood Highest Taxing $427,734$15,388$7,269 $15.35$915 Phelps highest spending $3,042,358$24,465$110*$7.06$3,895 Wauwatosa$878,380$10,781$2,883$7.92$1,153 Green Lake$3,503,363$20,375$112*$4.85$2,938 Berlin$378,256$11,862$6,889$9.57$588 Three Lakes$2,830,586$15,636$173*$4.99$2,579 Wausau$464,433$12,814$6,167$10.41$776 Elmbrook$1,183,819$13,329$380$10.04$2,096 State Average (K-12) $560,976$12,366$5,180$9.18$847 Sources: WTA SchoolFacts10 and October 15, 2010 State Aid Run - DPI

5. Comparisons between 1992-93 and 2009-10 School District 1992 Local Property Value/Pupil 92-93 Per Pupil Spending (CASC) 92-93 Tax Rate Gibraltar Wealthiest K-12/Lowest tax rate $1,217,237$8,444$6.09 Mellen Poorest K-12 /Highest tax rate $66,998$7,424$31.56 State Average (K-12) $190,590$6,514$20.16 Sources: Basic Facts School District 2009 Local Property Value/Pupil 09-10 Per Pupil Spending (Comparative Cost) 09-10 Tax Rate Gibraltar Wealthiest K-12 /Lowest tax rate $6,272,302$17,897$2.71 Beloit Poorest K-12 $210,254 $12,365$8.24 Elmwood Highest tax rate $427,734$15,388$15.35 State Average (K-12) $560,976$12,366$9.18 1996 New $ for 2/3rds = Tax Relief

6. Property Tax Credits Property Tax Relief State Support for K-12 = Direct Aid to Schools

7. Direct Aid v. Levy Credits Impact on Taxes State Categorical & Equalization Aids affect Gross Tax Levy Certified Tax Levy affects Levy Credits affects Net Property Taxes

8. GROSS SCHOOL LEVY $1,341.30 + 268.78 $1,610.08 Gross Total Levy $3,432.51 -82.48 Lottery & Gaming Credit $1,186.52 Total Tax Levy $3,432.51 Portion paid by state 423.56 Net Total Levy paid by Taxpayer $3,008.95 Net School Levy paid by Taxpayer SCHOOL LEVY $1,610.08 Gross Levy - 268.78 School Levy Credit $1,341.30 -72.30 First Dollar Credit $1,269.00

9. Net Property Tax Levy Impact on Pulaski Taxpayers Gross to Net Tax Levy Impact of Current Law with School Levy Tax Credits 2009-10 CertifiedSchool LevyNet Levy Gross Levy Net Levy LevyTax Credit*(-) CreditsRate Diff 13,635,6952,436,172 11,199,523 8.90 7.31 1.59 LFB 2/2/10 ANALYSIS of School Levy Tax Credits Transferred to Direct Aids 2009-10 CertifiedAdj School AidsNet LevyLevy Adj Levy Levy Reallocated credit $*(-) Add’l AidsRate Diff 13,635,6952,755,250 10,880,445 8.90 7.10 1.80 Net impact on taxpayers of Direct Aid vs. School Levy Credit distribution 0.21 * Based on LFB 2/2/10 analysis that used 08-09 actual school levy credit amount

10. SCHOOL LEVY & 1 st Dollar TAX CREDITS 1995-96$ 319m 1996-97+ 150m Nearly a Decade = $ 469m 2005-06+ 124m $ 593m 2007-08 + 79.4m $ 672.4m 2008-09 + 150m $ 822.4m 2009-10 + 70m 2009-10 + 70m $ 892.4m 2010-11 + 4.6m 2010-11 + 4.6m $ 897.0m

11. State Funding for K-12 Education 2005-06 to 2010-11 ($ in Millions) Sources: 2009 WISCONSIN Act 28 as vetoed and AEF fall 2009 newsletter State Budget Act 28 Change from 05-06 to 10-11 2005-20062006-20072007-20082008-20092009-20102010-2011$ Incr% Incr General School Aids $4,613.90$4,722.70$4,731.70$4,811.50$4,671.20 $57.301.20% School Levy & First Dollar Credits $469.30$593.10$672.40$822.40*$892.40*$897.40$428.1091.10% Categorical Aids $545.20$571.10$608.50$650.90$644.20$653.80$108.6019.90% State Resident Schools $10.40 $11.50 $11.80 $1.4013.40% Total State Funding $5,638.80$5,897.90$6,024.10$6,296.30$6,219.50$6,234.20$595.4010.60% *This includes First dollar credits that were added in 2008-09 for $75M with another $70M added in 09-10 and $5M in 10-11

12. School Levy Credits Municipality’s 3-Year Average School Levies Statewide 3-Year Average School Levies (Includes school levy credits, first dollar credit, and the lottery and gaming credits) DISTRIBUTION Distributed based on each municipality’s share of statewide levies for school purposes during the preceding three years. Source: LFB Papers #21 & #27, January 2009 Local Factors: Local Spending (Higher spending means more credit) Local Levy (Higher taxes means more credit) Direct State Aid (Lower state aid means higher local levy, means more credit)

13. Differing Effects of the 2 Largest Forms of State Support (Aids v. Credits) on Local Taxes ● Property poor/low spending districts will receive more state support when funds are channeled as Equalization Aid ● Property wealthy/high spending districts will receive more state support when funds are channeled as School Levy Tax Credit ● Taxpayers in every district gain from First Dollar Credits (Disequalizing) Why is this important? There has been a shift from Equalization Aids to Levy Credits – Disadvantages 70% of WI SDs Source: LFB Analysis February 2, 2010 Memorandum on school aids and school levy tax credits

14. School DistrictLoss School DistrictGain Appleton +.35-$2,460,110Crivitz (1.34)$1,199,074 Baraboo +.50-$812,613Drummond (.76)$1,020,634 Waunakee +.17 -$352,788Elcho (.99)$806,260 Delavan-Darien +.47 -$919,700Elmbrook (1.56)$12,132,922 East Troy +.46-$698,069Gibraltar (.44)$1,605,973 Fond du Lac +.37-$1,313,439Green Lake (.98)$1,034,812 Hudson +.51-$1,823,001Hayward (1.02)$3,194,244 Kenosha +.30-$2,842,143Mequon-Thiensvl (1.62)$7,487,810 Marshfield +.54-$1,053,006Northland Pines (1.01)$3,657,577 Mosinee +.41-$418,468Phelps (1.30)$550,762 Mukwonago +.41-$1,355,671Sevastopol (.90)$1,291,729 Oak Crk-Frank +.46-$1,711,559Spooner (1.21)$2,117,850 Owen-Withee +.44-$89,065Three Lakes (.96)$1,495,773 Racine +.65-$6,299,947Webster (.97)$1,432,684 Waukesha +.31-$3,031,465Weyerhaeuser (1.50)$296,963 Wauwatosa +.46-$2,475,613Williams Bay (1.23)$1,429,572 West Bend +.59-$2,784,119Wisconsin Dells (.89)$2,070,942 Total No. of SDs295 = 70%Total No. of SDs130 = 30% LFB Analysis: Shift of $747.4M School Levy Credits vs. Equalization Aid to in 2009-10 Source: LFB Paper dated February 2, 2010

15. CESA Comparisons Source: School Facts ‘10 by WTA CESA No. of School Districts 09-10 State Equal Val per Pupil 09-10 Tax Rate 09-10 State Equal Aid per Pupil 09-10 Levy Credit per Pupil 09-10 Tot Exp per Pupil CESA #331$427,989$10.34$6,613$704$13,003 CESA #426$434,902$9.66$6,624$682$12,571 CESA #535$592,752$8.97$5,066$831$12,025 CESA #642$544,661$8.16$5,727$723$11,547 CESA #737$519,411$8.40$5,962$719$11,941 CESA #827$572,480$8.69$5,616$832$12,918 CESA #1030$441,794$9.19$6,236$672$11,738 CESA #1139$587,520$9.17$5,097$894$12,000 CESA #143$761,529$8.71$4,121$1,110$11,992 CESA #274$739,529$8.45$4,631$1,036$12,403 CESA #922$1,003,934$6.02$5,070$1,006$12,923 CESA #1217$854,675$7.17$4,518$1,012$13,208 State Ave (K-12) $560,976$9.18$5,373$847$12,366 Below Average Levy Credit = 277 SDsAbove Average Levy Credit = 156 SDs with lots of out-of-state property owners 15

16. Who Pays & Who Benefits from Levy Credits? Only 51% of the total school levy credit reduces property taxes of WI homeowners on their primary residences. 9% of the levy credits go to WI 2 nd homeowners 26% go to non-WI 2 nd "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." Source: Andrew Reschovsky's study of the levy credit: http://www.lafollette.wisc.edu/publications/workingpapers/#2010-003 http://www.lafollette.wisc.edu/publications/workingpapers/#2010-003

17. School District 09-10 Tax Rate 09-10 Total Exps per Pupil 09-10 Levy Credit per Pupil 09-10 Equal Aid per Pupil Abbotsford$8.78 $11,096 $371$7,503 DC Everest $9.52$11,508$597$6,872 Racine $6.69$12,024$560$6,156 Sparta $9.37$12,472$566$7,383 Elmbrook$10.04$13,329$2,096$899 Green Lake$4.85$20,375$2,938$131 Mequon-Thiensville$8.73$12,614$2,038$597 Three Lakes$4.99$15,636$2,579$202 State Average (K-12) $8.45$12,366$758$5,222 District Comparisons Sources: School Facts ‘10 by WTA Below Average CreditAbove Average Credit