WILL Blog | Flanders: Overhaul School Funding Formula?

Published on: January 11, 2017

Policymakers should consider 3 facts first

According to a recent article in the Milwaukee Journal Sentinel, “Wisconsin lawmakers say they are serious about overhauling the state’s school funding formula.”  Reasons for making the change seem to run the gamut from the perceived unfairness of the current system to issues with the formula’s complexity.  Republican State Rep. Joel Kitchens will assemble a bipartisan task force with the goal of having a proposal for the 2019-2021 state budget.

While it is possible to chart a better path forward on public school funding, a few important facts should be kept in mind as policymakers consider this issue:

  1. Compared to other states, Wisconsin has a relatively equitable funding system among its public schools.

The current complex funding formula is ultimately complex because one of its major goals is to equalize the funding that schools receive across the state. Indeed, the major push from state Superintendent Evers has been to give additional funding to poorer kids. Evers’ plan presupposes that these students aren’t getting a fair shake under the current system, but the evidence for this is questionable at best.  A 2015 study by the Education Trust analyzed the extent to which all fifty states in the United States provided equitable funding to high-poverty districts.  In the study, Wisconsin already ranks as having the 15th most equitable funding, and is reported as one of the states in which poorer districts receive more revenue than their wealthier counterparts.  This relative equality is largely a product of the current funding system.  To say that there are massive disparities in funding in Wisconsin is a stretch.

  1. There is little evidence that additional funding will help students.

Per-student funding has been increased in Wisconsin by more than $400 per student since the end of the Great Recession in 2012.  The basis for these regular increases is the supposition that more funding will lead to improved student outcomes.  However, there is little evidence to back up this claim.  Previous research by WILL has shown that there is not a significant relationship between tax dollars spent and students outcomes when Wisconsin is compared to industrialized countries around the world.

To further highlight the fallacy of such arguments, I took the revenue-limit per district in each district in Wisconsin and compared it to scores on the most recent state report card.  The results of that analysis are in the figure below:

Relationship between District Funding and Report Card Score, 2016

flanders-blog-2017-january

 

If the graph looks flat, it’s because it pretty much is. Consistent with our previous research, there is not a significant relationship between school district funding in Wisconsin and outcomes.  Also of note from this figure is most districts are clustered around the same point of approximately $10,000 with a small number of districts providing much higher amounts of revenue. This further emphasizes the relative equality of the current system. The evidence here gives us little reason to believe that more equalized funding will lead to improvement in student performance.

  1. Federal Aid Further Equalizes Funding.

The analyses above have only considered aid from the state and local levels.  But school districts in Wisconsin also receive aid from the federal government through programs like Title I. These funds tend to flow disproportionately to districts that are less economically well off. For example, the Milwaukee Public Schools receive more than $2,300 per student in federal aid according to the most recent data available from DPI.  The far wealthier Mequon-Thiensville Public Schools receive only about $300 per student in federal aid.  Milwaukee ranks in the top fifth of districts in overall spending per student once these federal aids are taken into account. Federal aid differences tend to further reduce the disparities between rich and poor in a state that already does a fairly good job in equalizing funding.

H.L. Mencken said that “for every complex problem there is an answer that is clear, simple and wrong.” School funding in Wisconsin is complex, but we must be careful to understand the facts on the ground before rushing to implement alternative solutions that may, in the end, be worse than the “problem” we are trying to solve.