Inside: Financing/Funding

WISCONSIN LAWMAKERS SEEK EQUITY

A group of legislators in Wisconsin has introduced a resolution calling for changes in the state's school funding formula by July 2009.

The lawmakers are seeking finance reforms that would establish funding levels based on actual costs of educating students “rather than based on arbitrary per-pupil spending levels.” The reforms also would have enough flexibility to address special circumstances such as non-English- speaking students, students from low-income households, districts of large geographic size, districts with low population density, or districts with significant changes in enrollment.

The resolution contends that many Wisconsin districts are struggling to survive under the existing school finance system.

”Some school districts are on the brink of dissolution in part due to declining enrollment and the significant financial restraints imposed by a school aid formula that determines school district revenue limits on a per-pupil basis,” the resolution says.

”Some of the lowest-income areas in the state are burdened with the highest property taxes because the state school aid formula is based upon property values.”

NORTH DAKOTA BOOSTS FUNDING

The North Dakota Legislature has approved a $90.7 million increase in spending over two years for K-12 education.

The legislation seeks to provide greater funding equity for school districts by calling for all districts to be at 90 percent of the statewide average in funding by 2008.

The funding changes stem from recommendations made by the North Dakota Commission on Education Improvement. With legal challenges to the state's school finance system pending, Gov. John Hoeven appointed the group in 2006 to come up with ways to distribute money more fairly. Those challenging the funding formula agreed to put their lawsuit on hold, and the state agreed to boost funding for the 2007-09 biennium by at least $60 million.

The bill provides $5 million for full-day kindergarten, an additional $8 million for special education and $2.6 million more for transportation.

“With the addition of $90 million dollars and a fairer, more equitable formula,” Hoeven says, “we are telling students across North Dakota: you are the future of our state, and North Dakota is committed to investing in you.”

FUNDING IS UP FOR HIGHER EDUCATION

State and local governments provided about $77.7 billion in funding for operating expenses to public higher-education institutions in fiscal 2006, according to the State Higher Education Finance Report.

That represents an increase of 7.6 percent, or $5.5 billion, over fiscal 2005 appropriations.

The report, produced each year by the State Higher Education Executive Officers, says the figures show that support for higher education is on the upswing and appears to be following a familiar cycle.

“During the past 25 years, state and local support for higher education has ‘recovered’ following major economic recessions to levels that exceeded previous support,” the report says. “Data from the last two years imply a return to this pattern of recession and recovery.”

The figures show that state and local support per full-time-equivalent student in 2006 was $6,325, an increase of 5.1 percent compared with the 2005 level of $6,017. That was the lowest amount of state and local support per full-time-equivalent student in 25 years.

The peak of local and state support was $7,371 (in constant U.S. dollars) in fiscal 2001.

The report says that two factors played the largest role in reversing the downward trend of state and local support: Total state support grew by 7.9 percent, and enrollment growth leveled off after increasing 17 percent in the previous five years.

Higher education: where funding comes from

Source Fiscal 2006 Fiscal 2005
State sources $70.7 billion (62%) $65.6 billion (61.8%)
Local taxes $7.0 billion (6.1%) $6.7 billion (6.2%)
Tuition revenue $36.3 billion (31.9%) $33.9 billion (32%)
Source: State Higher Education Finance Report
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