1. 2015-17 Biennial Budget Update State Superintendent’s Advisory Council on Rural Schools, Libraries, and Communities April 22,2015 Erin Fath, Policy & Budget Director Department of Public Instruction

2. What we’ll talk about today … 1.2015-17 State Budget Timeline 2.Governor’s Budget Proposal for: a.School Aids b.Non-Aid provisions (Accountability / Assessments, Parental Choice Program Expansion, Whole Grade Sharing) 3.Q&A AGENDA

3. 2015-17 State Budget Timeline 1.Fall 2014: all state agencies submitted requests for the fiscal years 2015-16 and 2016-17 (FY16-FY17) 2.Governor released his proposal on February 3 rd 3.Joint Committee on Finance (JCF) held agency & public hearings in March 4.JCF has started to hold “executive” sessions – this is where they make decisions... 1.Do not yet know when JCF will take up DPI/K-12 funding 2.JCF may take up some issues earlier – but school finance will likely come later in the process 5.JCF saying they want to wrap up by Memorial Day (?) 6.From there – to both houses of Legislature … 7.Then to Governor for vetoes and signing into law … June (?)

4. Revenue Limits & General Aid … Per Pupil Aid … Tax Credits …

5. As you all know … Governor’s Proposal: 1.Revenue Limit Adjustments: $0 in FY16 and FY17 No additional revenue authority, other than exemptions (e.g., referendum) 2.General/Equalization Aid: $0 in FY16, $108 M in FY17 State General Aid reduces Levy – not “new money” 2015-17 Budget Proposal – Revenue Limits & General Aid Revenue Limits State General Aid Property Tax Levy

6. 2015-17 Budget Proposal – Per Pupil Aid Per Pupil Aid – Current Law Categorical Aid – new for 2013-15 biennium under 2013 Act 20* Provided to all school districts – no eligibility criteria: – Districts spend outside the revenue limit – additional spending capacity – $75 per pupil in FY14 – $150 per pupil in FY15 (increase of $75 per pupil over FY14) – $150 per pupil thereafter (no increase in aid amount, but was provided on a continuing basis under Act 20) *2011 Act 32 provided for “Per Pupil Adjustment Aid” which provided up to $50 per pupil in FY13 only, depending on a district’s use of allowable levy authority.

7. 2015-17 Budget Proposal – Per Pupil Aid Per Pupil Aid – Governor’s Proposal $0 in Per Pupil Aid in FY16 – this is a reduction to districts’ spending capacity ~$165 in Per Pupil Aid in FY17 Still outside of revenue limits Still provided to all districts, no eligibility criteria HOWEVER: – No longer a sum-sufficient appropriation (amount per pupil = total appropriation divided by statewide membership) – Provided on a one-time basis in FY17

8. 2015-17 Budget Proposal – Tax Credits Governor’s Proposal – School Levy Tax Credit Increases allocation by $105.6 million in FY16 & FY17 (e.g., for tax bills going out in Dec 2015 & Dec 2016) The SLTC reduces property taxes – it is not additional revenue beyond a school district’s revenue limit The SLTC is distributed based on a municipalities share of the statewide school levy – not equalizing In the era of “2/3’s” funding for schools, the SLTC was counted as state aid. (SLTC base = $897.4 M)

9. Categorical Aids

10. 2015-17 Budget Proposal – Categorical Aids The Governor’s Proposal includes the following increases requested by the State Superintendent: Sparsity Aid: – Eliminate FRPL eligibility criterion & fully fund at $300 per member Transportation Aid – Raised reimbursement rate for 12+ miles category from $275 to $300 High Cost Transportation Aid – Increase funding to provide reimbursements at ~50% – Introduce sparsity criterion – must have fewer than 50 members/square mile School Library Aid (Common School Fund reestimate)

11. 2015-17 Budget Proposal – Categorical Aids The Governor’s Proposal eliminates funding for a few existing categorical aid programs: – Career & Technical Education Incentive Grants (transferred $3 million annually to DWD, Wisconsin Fast Forward Program) – Environmental Education Grants The Governor’s budget excludes funding increase requested by the State Superintendent for several categorical aid programs: – Regular & High Cost Special Education, Bilingual – Bicultural, SAGE, School Breakfast, Gifted and Talented Grants, STEM Grants, Tribal Language Revitalization Grants …

12. Parental Choice Programs & Independent Charter Schools

13. 2015-17 Budget Proposal – Parental Choice The Governor’s Proposal – Milwaukee Choice Program Per pupil payment – flat ($7,210 for K-8 & $7,856 for 9-12) Additional funding for MCP is related to estimated enrollment growth (and increasing state share of costs) Cost is shared between the state and property tax payers in Milwaukee The Governor’s Proposal – Racine & Statewide Programs Pupils participating prior to 2015-16 Per pupil payment – flat Cost is paid entirely from a separate state appropriation (not funded with a reduction to other districts’ General Aid)

14. 2015-17 Budget Proposal – Parental Choice The Governor’s Proposal – Expand Racine & Statewide Programs: For pupils that begin participating in 2015-16 and thereafter (“incoming pupils”) Eliminate cap on program participation (statewide program) Per pupil payment would be calculated each year: 1.Incoming Choice pupils would be included in their resident district’s membership for calculation of Equalization Aid (but NOT for revenue limits). 2.Average equalization aid /member x the number of Choice pupils residing in the district = a district’s contribution to the pool for paying the participating private schools educating those pupils. 3.All districts’ contributions are pooled and then divided by total incoming Choice pupils from all districts to arrive at per pupil payment to a private school.

15. 2015-17 Budget Proposal – Parental Choice The Governor’s Proposal – Expand Racine & Statewide Programs: For pupils that begin participating in 2015-16 and thereafter (“incoming pupils”) Each district with residents attending a participating private school under the expanded Racine or Statewide Choice programs would see a reduction in their General Aid: – Amount would vary by district – Amount would be determined when DPI calculates the October 15th Certified General Aid Payments

16. 2015-17 Budget Proposal – Parental Choice The Governor’s Proposal – Expand Racine & Statewide Programs: For pupils that begin participating in 2015-16 and thereafter (“incoming pupils”) Restriction on incoming pupils to Racine & statewide choice programs: Limited to pupils from families at or below 185% of FPL To be eligible, a pupil must meet one of the following requirements*: 1.Was enrolled in a public school in their district of residence in the previous school year. 2.Was not enrolled in school in the previous school year. 3.Was enrolled in a private school under the Racine or statewide private school choice programs in the previous school year; or 4.Is enrolling in kindergarten, first grade, or ninth grade in the current year. *Under current law, these requirements apply only to the Racine private school choice program.

17. 2015-17 Budget Proposal – Charter Schools The Governor’s Proposal – Independent Charter Schools Per pupil payment – flat ($8,075) Assumes cost increases based on estimated growth in enrollments Cost of program is borne by all school districts that receive General Aid: – Proportionate reduction in General Aid – Aid reduction approximately 1.5% in 2014-15 – NOTE: schools can levy back for the Independent Charter School aid reduction – thus, the cost is ultimately borne by local property tax payers.

18. 2015-17 Budget Proposal – Independent Charter Schools The Governor’s Proposal – Create the Independent Charter School Oversight Board Creates an 11-member statewide charter school oversight board, with the ability to approve new independent charter school authorizers anywhere in the state. Same per pupil payment would apply ($8,075) Increases independent charter school funding to reflect an anticipated enrollment increase over next two years ($4 million per year based on assumed growth in enrollments) As the costs of the independent charter school program increase, so also do the reductions to General Aid for school districts – thus, the potential for greater pressure on local property tax levies.

19. Other Provisions

20. 2015-17 Budget Proposal – Other Provisions Whole Grade Sharing Permits districts to enter into whole-grade sharing (WGS) agreements. WGS Agreement would specify the per pupil payment between districts (as well as other provisions, e.g., who provides transportation, awards diploma, retains student records) Provides "base guarantee aid" for districts: – For 5 years after they enter into the WGS agreement – For years 6 & 7, guarantee aid at 66% & 33% (respectively) of the WGS base guarantee aid amounts Additional aid would be received through the equalization aid formula; however, no new funds appropriated for WGS

21. 2015-17 Budget Proposal – Other Provisions Open Enrollment No changes to current law program; per pupil payment amount remains at current dollar level: $6,635 for FY16 & FY17 – Delays indexing of per pupil payments until FY18 (indexing = linked to dollar change in per pupil revenue limit adjustment and categorical aid per pupil for public school districts)

22. 2015-17 Budget Proposal – Other Provisions School District Operations / Management Posting of educational options for all children ages 3-20 in the district (required of public school districts, independent charter schools & private schools in the Choice programs) Notification of school & district accountability ratings Optional membership in CESA Closes the Local Government Property Insurance Fund to new policies and would prevent renewal of existing policies issued by this Fund.

23. THANK YOU for your time today! Questions?