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| In brief 11.18.09 l No. 23 |
School district finance facts from SchoolFacts09 |
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School districts budgeted $11,981 per student in 2008-09, 5.1% more than in 2007-08. Last year’s increase topped the 4.0% annual average growth rate of the past decade. District size impacts per pupil spending, as the state’s smallest school districts spent over $1,300 more than its largest. That said, almost three-quarters of districts spend $9,500 per child +/- $1,000, according to WISTAX’s annual SchoolFacts book. Capitol notes n No surprise: In a recent study of state government finances, the Pew Center for the States ranked California as most in "fiscal peril." However, three midwest states—Illinois, Michigan, and Wisconsin—joined the west’s behemoth among the ten most vulnerable states. Despite protests from leading Madison politicians, Pew reported that Wisconsin had "shifted money around, taking money from the state’s transportation fund, for example, to pay for day-to-day operations and then borrowed to cover the transportation budget. Legislators also failed to maintain reserves before the recession hit."n In its third-quarter economic outlook, the Wisconsin Department of Revenue (DOR) said its forecast "has slightly improved since our June release." However, DOR predicted that the state’s "peak-to-trough" job loss during the recession will be 143,000, or 5% of employment. Total nonfarm jobs fell 0.5% last quarter and are expected to drop 0.8% and 0.2%, respectively, in this quarter and next. A 1.8% increase is expected during the April-June period.
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A larger share of state and local taxes (40% or more) goes to Wisconsin’s public schools than to any other program. To aid parents and the press, public officials and taxpayers, the Wisconsin Taxpayers Alliance (WISTAX) each year publishes SchoolFacts, a comprehensive factbook that answers questions about expenditures, revenues, test scores, enrollment, and staffing patterns in the state’s 425 school districts. Spending overview Totals. A common question relates to how much districts spend. During the last school year (2008-09), districts budgeted a total of $10.32 billion (b), or 4.8% more than the prior year. Use. Of that, 58.2% went for instruction, a percentage that varies by district, from about 40% in Grantsburg to more than 70% in Barneveld, Raymond, and Neosho. Most (84%) instructional expenditures were for salaries and benefits for teachers and aides. No other area claimed more than 10% of 2008-09 spending. The pie chart below recaps how the rest of school expenditures were allocated. Buildings and grounds (9.5%) accounted for the largest percentage, followed by administration (7.5%) and debt service and capital expenditures (7.0%). School District Spending by Category
Total per student. A common way to evaluate school district spending is per pupil. In 2008-09 districts budgeted $11,981, up 5.1% from $11,339 in 2007-08. Over the past decade (see table below), per child expenditures have grown about 4.0%. Per Student Spending
Spending compared Measuring comparable costs. Comparing school spending by district is problematic because districts vary both in geographical size and in enrollment trends. Sprawling, low-enrollment districts, often in northern Wisconsin, spend more to transport each child. Likewise, districts with growing student numbers often carry heavier debt loads to cover the costs of new construction.To make interdistrict comparisons more even-handed, WISTAX uses a second measure of per pupil spending, comparative expenditures, which excludes transportation and debt costs from spending totals. While total budgeted spending last year was $11,981 per student, comparative expenditures were $10,064. How spending varies. Based on this measure, per pupil spending ranged from under $8,000 in Grantsburg and Maple to $18,264 in Menominee Indian (which receives considerable federal aid). However, most Wisconsin districts spent within $1,000 of $9,500 per student. Of 369 K-12 districts (excluding K-8 and union high districts), 73% spent between $8,500 and $10,500 per child (see graph above, right). The reason for this "bunching" of spending averages is due to the long-term effects of state revenue limits and, to some degree, to the state equalization aid formula.
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Comparative Spending Per Student ($000)
Size effect. District size has considerable impact on per student spending. In keeping with economic theory, small-enrollment districts generally spend more per student because they have fewer children over which to spread fixed costs. The bar chart (right) summarizes 2008-09 comparative expenditures per student (excluding transportation and debt service) for districts arranged in 11 groups from smallest to largest. For example, the smallest 10% (or decile) of districts averaged enrollment of just 261 and budgeted average expenditures of $11,934 per student. Incidentally, total spending, including transportation and debt, averaged $14,266 per student. As district enrollments grew, average budgeted costs fell. In the second smallest decile, average enrollments were larger (444) than in the first, and comparative spending per student ($10,595) was more than $1,300 less. Average budgeted costs reached their lowest point at $9,439 per student in the ninth decile, where enrollments averaged 3,381. Average comparative spending did not vary dramatically between the fourth (736 average enrollment, $9,793 average cost per child) and the ninth decile. Taking a closer look at the top decile by dividing it in half, one finds that the state’s largest districts (top 5% in enrollment) tended to spend more per pupil. Enrollments averaged 12,079 students and comparative expenditures, $10,280 per child. Over the years, WISTAX research has shown that, from a cost-per-student perspective, optimal district size in Wisconsin is probably between 1,000 and 3,000 students. Being too small or too large can result in higher costs per pupil. Avg. Comparative Spending Per Student
Paying for it all The leading source of school district revenue in 2008-09 was state general ($4.81b) and categorical ($0.65b) aids, which totalled $5.46b. Local property taxes contributed $4.28b, while federal aids accounted for $0.72b. State general aid increases over the past decade ranged from 6.9% in pre-election 2005-06 to 0.2% in 2007-08, when the state budget was late. Categorical aid (e.g., special education and driver instruction) has been even more volatile, with changes ranging from +16.0% in 2000-01 to -7.1% in 2003-04. In 2008-09, general aid rose 1.7% and categorical monies, 7.0%. When state aid grows at a slower rate, local property tax increases tend to be larger. In 2008-09, levies were up 5.2%, though 72 districts raised them by 10% or more. Federal aid grew fastest (6.2%); since 2000, federal dollars have grown an average of 7.7% per year.
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