Stalled State Budget Creates School Problems

 Michael Theo  |    October 15, 2007

The state budget is now nearly three months late, with no real end in sight. This tardiness, however, is not the result of inept legislative or gubernatorial leadership, but rather a reflection of the deep fiscal and philosophical divisions between the Senate Democratic and Assembly Republican versions of the budget. The Budget Conference Committee is having an understandably difficult time trying to reconcile the Senate Democratic budget that contains the biggest tax increase in state history with the Assembly Republican budget that contains zero tax increases – and the wildly differing spending priorities under each plan.

However, if the current budget deadlock continues much longer, many state and local government programs will begin to feel the fiscal pinch despite the fact that, unlike the federal government, the state government does not shut down if a budget isn’t passed on time. Rather, state spending continues at the current budget levels until a new budget is passed.

A growing concern for many lawmakers of both parties is the fate of local schools. With state funding levels unknown, it is impossible for local school districts to create their budgets and/or set their property tax levies – creating fiscal uncertainties for school boards and taxpayers.

To address the immediate school-funding issue, two leading Republican legislators are calling for the passage of a separate school-funding bill while allowing the state budget debate to continue.

The proposal by Senator Michael Ellis (R-Neenah) and Representative Dean Kaufert (R-Neenah) calls for quick passage of legislation that provides sufficient increases in general school aids to maintain the current level of state support for schools while allowing the revenue adjustments under the existing school revenue caps to occur. Under this approach, the Ellis and Kaufert plan will allow increases of $264 per student in 2007-08 and $270 per pupil in 2008-09, funded by an increase in general school aids of $174 million in the first year and $187 million in the second year. That totals $361 million over base for schools in the biennium that started July 1.

Not everyone thinks this approach is a good idea – most notably Governor Jim Doyle. The governor strongly opposes breaking out major spending components of the state budget, like schools and shared revenue aids to local units of government, arguing the state budget is too interconnected to pass piecemeal.

Despite these arguments, Ellis and Kaufert, and a growing number of legislators, continue to push their approach, calling it reasonable and affordable. They claim it would not only bring certainty to school boards working on their budgets at this time, but it would also demonstrate that funding is a legislative priority for both political parties. According to the legislators, “Our proposal to increase general aids to maintain the current level of state support for K-12 education would allow schools to keep up with inflation while keeping property tax increases to a minimum.”

While the outcome of this approach is uncertain, what is certain is that there will be growing pressure on budget conferees to resolve the budget impasse. Stay tuned. (Note: The outcome of the state budget debate was unknown when this article went to print.)

Michael Theo is Vice President of Legal and Public Affairs for the WRA.

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