MADISON—Statewide, total school levies for 2006-07 will rise 5.4% to $3.79 billion, though changes for individual districts vary. This year’s growth is above the median annual increase (4.9%) from 1990 to 2006. A smaller increase in state aid and voter approvals to exceed state revenue caps account for much of this year’s school levy increase, according to a new report by the Wisconsin Taxpayers Alliance (WISTAX), a nonprofit, nonpartisan organization dedicated to public-policy research and citizen education.

The state’s general school aids rose only 2.4%, compared to 6.9% last year, which means school districts may collect more revenues through property taxes as long as they stay within state-imposed revenue caps. At the same time, 72 districts increased their levies $51.5 million through referenda. According to WISTAX, if no referenda had passed, school levies would have grown 3.8%, not 5.4%.

Levies also rose because school boards increased appropriations to community service funds (Fund 80) by 25.2%. Taxes resulting from these Fund 80 increases are exempt from state revenue limits. Had there been no Fund 80 increases, school levies would have been up 4.7%.

Increase in the school levy tax credit will offset some of the school tax hike. The credit reduces an individual’s total property tax bill.

Last year, school levies dropped 0.5%, as the state boosted school aids to "buy down" tax increases. Such reductions also occurred in 1987 and 1994-96, when incumbent governors were up for reelection.

Levy changes for individual districts ranged from a 120.4% increase (Washington-Caldwell) to a 21.3% drop (Seneca). Throughout the state, 222 districts (more than half the 424 examined) held increases to under 5% or cut taxes. Of the remaining districts, 202 hiked levies more than 5%, with 12 districts raising them between 15% and 20%, and 24 raising taxes more than 20%. In Milwaukee, the state’s largest district, the levy rose 8.0% to $244.42 million for 2006-07. The state’s second-largest district, Madison, raised its levy to $209.21 million, a 4.4% increase. Of the 18 other districts with the largest tax levies, changes ranged from a 12.2% increase (to $74.67 million) in Kenosha, to a 1.6% reduction in Eau Claire (to $47.94 million).

Despite the statewide levy increase, school tax rates dropped, usually due to fast-growing property values. The average rate fell from $8.62 to $8.31 per $1,000 of value. Rates were highest in Highland ($13.79) and lowest in K-8 North Lakeland ($1.74).

For a free copy of Focus #26, "School taxes: What a difference a year makes," write WISTAX, 401 North Lawn Ave., Madison, WI 53704-5033; e-mail wistax@wistax.org; or phone 608.241.9789. o