Gov. Tony Evers’ proposed 2023-25 state budget would provide a $2.6 billion funding increase to K-12 schools while substantially lifting revenue limits, boosting funding for special education and mental health initiatives, and providing school breakfasts and lunches for all students.
The sweeping package, which will be included in the governor’s full budget proposal, also includes funding to improve literacy rates among students, bolster schools’ capacity to serve students learning English, and recruit and train the state’s next generation of teachers. Evers is set to release his proposed spending plan on Wednesday.
The $2.6 billion in additional funds would represent a roughly 17% increase in state spending on K-12 schools over the biennium compared with the current two-year budget.
“Budgets are about priorities, which is why every budget we build begins with doing what’s best for our kids,” Evers said in a statement. He added that Wisconsin’s “kids, families and schools need our help now more than ever.”
“For years, communities have been forced to go to referendum and raise their own property taxes to keep their local schools afloat, and while some districts have successfully passed referenda to help keep the lights on and the doors open, many have tried and failed,” the governor said.
Evers, who campaigned for reelection on boosting K-12 funding, pledged to invest a portion of the state’s projected $7.1 billion budget surplus into Wisconsin schools.
“There has never been a more important time to do the right thing for our kids,” he said.
Revenue limit increases
The Democrat’s package includes a significant increase in revenue limits for school districts. Revenue limits set a maximum amount of money each school district can bring in for a given school year through the combination of local property taxes and state aid.
Effectively, it’s a spending cap, and any increase in state aid without a corresponding increase in the revenue limit serves as a property tax cut. The concept of a revenue limit, determined by a level of spending per student set in the state budget, first came to Wisconsin in the 1993-95 budget to combat what critics considered soaring property taxes.
Evers’ budget will include a per pupil revenue limit increase of $350 next fiscal year, which begins July 1, and an additional per pupil bump of $650 in the second year of the biennium. The governor’s office said the increases would represent the largest per pupil adjustments since revenue limits were adopted.
Even with the extra funds, many districts around Wisconsin face a challenging budget season this spring as they plan for 2023-24 amid high inflation, which translates to higher costs for employee pay and benefits, among other budget items.
With two years of a $0 per pupil increase in the revenue limit in the current state budget, many districts relied on one-time COVID-19 relief funding to pay for ongoing expenses like pay increases or academic programs, leaving themselves in a difficult position now.
Madison Metropolitan School District Chief Financial Officer Ross MacPherson said Monday that even with the most optimistic budget, which Evers’ proposal would be, the district will face a gap to continue its current spending. That will force MMSD to make cuts, and if they can’t find enough, consider using one-time funds that would leave the district with a structural deficit for 2024-25 before planning even begins.
“This goes against budgeting 101 I was taught years ago, but I also never thought school finance would look like this when I started back in the early 2000s,” MacPherson said.
Universal school meals
The governor’s proposal will also include $120 million in the second fiscal year of the two-year budget (beginning July 1, 2024) to fully fund school breakfasts and lunches for all Wisconsin students. The meals program is “aimed at improving student health and reducing hunger and anxiety,” according to Evers’ office.
If implemented, Wisconsin would join states like California and Maine in offering no-cost meals to all students. Both of those states used budget surpluses to start the programs last fall. Vermont, Massachusetts and Nevada are offering universal meals for the current school year, and Pennsylvania is offering free breakfasts to all students for the 2022-23 school year.
Universal free meals were a feature of the pandemic nationwide, as districts received extra funding to provide the service. Participation in school meal programs went up, and supporters said removing barriers to apply for free and reduced meals meant more students in need were able to eat, making them better able to learn.
Once that funding stream stopped, however, most districts returned to the old system, which requires a family to sign up for free and reduced-price meals.
Student mental health
Abiding by his State of the State declaration that 2023 is “The Year of Mental Health,” the governor’s proposal includes more than $270 million over the biennium to make permanent a program that helps schools build “comprehensive school mental health systems.”
“Mental and behavioral health is as much a health issue as it is an economic one: it affects kids in the classroom; it affects workers being able to join and stay in our workforce; it affects whether folks are able to stay in safe housing or have economic security; it affects folks’ ability to take care of and provide for their family and loved ones,” Evers said during his annual address last month.
The former educator’s budget proposal also includes more than $10 million to allow schools to receive Medicaid reimbursement for costs associated with telehealth consultations that begin at school.
The results of the state Department of Public Instruction’s 2021 Youth Risk Behavior Survey, taken on a voluntary basis in fall 2021, added more evidence to rising rates of mental health issues among youth.
“Our children and youth in Wisconsin are in crisis, and they have been for too long. It is past time to take drastic measures to do something about it,” State Superintendent Jill Underly said in a press release last year. “We must focus our efforts on what will create the most impact, because our kids are hurting and what we have done as schools and communities has not been enough to prevent that.”
About one-third of respondents, 33.7%, reported they “felt sad or hopeless” almost every day for more than two weeks, “so they stopped doing some usual activities” at some point in the year before taking the survey. That figure is up significantly from a decade ago, when the same survey question had 22.7% of respondents report they felt sad or hopeless.
Special education funding
Schools would receive a “critical investment,” Evers’ office said, of more than $1 billion over the two-year budget toward reimbursing special education costs.
Districts are required by state and federal laws to provide services to students with special needs, but the reimbursement for those services has decreased over the years and now hovers around 30% of the costs. Increasing that reimbursement, which Evers’ proposal would bring to 60% in both years, would free up general funds for other needs in districts.
An Education Law Center report last fall found that districts throughout Wisconsin cover a total of $1.25 billion in special education costs above the 30% the state reimburses.
“Districts that are underfunded for special education must redirect money from general funds, leading to fewer resources for all students, not just students with disabilities,” the report stated.
Literacy programs and more
Evers’ proposal also includes efforts to improve “reading and literacy rates statewide,” his office said. The budget would earmark $10 million per year “to fund comprehensive training” for 28 new literacy coaches and 28 new “professionals in early reading instruction practices.”
The budget would also spend about $4.5 million to bolster groups that work to improve literacy and reading skills in the state.
Just 34.8% of Wisconsin third-graders tested proficient in reading last year on the state’s Forward Exam. Among MMSD third-graders, that figure rises slightly to 37.5%.
The governor’s proposal would also provide about $750,000 to help Wisconsin Literacy “conduct adult literacy activities, including expert trainings, personalized consultations and workforce connections,” Evers’ office said.
Districts would also receive increased reimbursement for supporting English-language learners, with $8.2 million in the first year of the budget and $14.2 million in the second year. That would bring the reimbursement rate for schools with higher populations of English learners from 7.9% now to 20% by 2025, according to Evers’ proposal.
The budget would attempt to address the state’s teaching shortage through investments in “grow your own” programs that allow current staff to pursue additional higher education credits or licenses, or cover college costs for students who commit to teaching in their district of attendance after graduation. It would also provide stipends to student teachers and interns and those who agree to train and oversee them.
Evers’ full budget will be released Wednesday. In the weeks and months that follow, Republicans on the Legislature’s Joint Finance Committee will comb through his proposal and could cut sizable portions of it — as they did to his first two budget proposals. The spending plan will then go to the full Legislature for approval before it returns to Evers, who could approve it, veto it or adjust it with his partial veto powers.