The Sconi

The passage of the controversial $252 million Milwaukee Public Schools (MPS) referendum means hundreds of other districts statewide will receive less aid. Madison, Waukesha, and Racine school districts could lose $2 million or more in one year, Appleton and West Bend between $1 million and $2 million, and New Berlin, Fond du Lac, Green Bay, and Mukwonago at least $760,000, according to calculations by the Legislative Fiscal Bureau (LFB).

"The impact is huge," state Sen. Van Wanggaard, R-Racine, who requested the estimates from the LFB, said. "This was a wakeup call for me on the impact of these big referendums on state aid. Huge."

The April 2 MPS referendum passed by a narrow margin. Many critics believe it would have failed if the extent of the district’s financial mismanagement had been known beforehand.

"This is deeply concerning, as this news may have changed the results of the referendum," state Rep. Scott Allen, R-Waukesha said. "In the private sector, such activity is regarded as fraud and would be legal grounds for voiding a contract."

Reverberations are expected statewide. "It has become a State of Wisconsin problem to fix Milwaukee schools," Allen told the Badger Institute. "This is no longer a 'local issue.' The scandal we see at the top of the administration of MPS is merely the tip of the iceberg of financial mismanagement."

In discussions with other lawmakers leading up to the election, Wanggaard asked LFB to calculate how MPS's financial windfall based on a tiered equalization aid formula in place since 1995 would affect other districts.

According to an LFB report: “In pure form, this means that a school district’s property tax rate does not depend on its property tax base but rather on its level of expenditures.” Districts with low per-pupil property valuations receive more through this formula than those with high valuations.

However, Dale Kooyenga noted that for over a decade legislators sidestepped this formula due to Milwaukee Public Schools' financial issues by adding funding to “per-pupil categorical aid,” which provided more money per child regardless of property tax base or other factors.

The exact future loss cannot be precisely calculated yet; however, LFB approximations based on prior finances indicate significant impacts. Based on $5.34 billion appropriated in state aid for 2022-23 school year calculations show that if MPS added $140 million in revenue (as planned for 2024-25), it would have received $48.8 million more in state aid following that year’s referendum.

Milwaukee’s increase sets off an estimated redistribution totaling $87.9 million across 357 out of 421 districts receiving less than they normally would have gotten according to LFB's report.

"Racine Unified is aware of potential revenue loss," Jeffrey Serak Chief Financial Officer for Racine Unified School District told Badger Institute adding any loss digs their deficit deeper resulting in cost reductions across their district.

Despite being smaller Tomahawk School District stands losing largest percentage drop from $1.8m down to$1 .5m representing17 .4% reduction due directly attributable result referendum according same report

Bill Andrekopoulos retired former superintendent outspoken opponent expressed shock magnitude educational impacts statewide stressing importance transparency taxpayer voter awareness suggesting necessary systemic changes stabilize what Kooyenga termed “constant water balloon motion” caused shifting responses affecting entire system ultimately calling reforms legislative session starting January2025

“This our ‘Holy crap!’ moment we’re starting line beginning”Wanggaard concluded emphasizing commitment thorough investigation reform efforts forthcoming period ensuring continued attention issue beyond immediate concerns raised

Mark Lisheron Managing Editor Badger Institute permission reprint granted author institute properly cited