MADISON, Wis. – A new report from Forward Analytics, A Funding Choice, Mixing Public & Private School Funding, examines the impact of decoupling funding of School Choice, Independent Charter Schools, and the Special Needs Scholarship Program from the public school revenue limit and general aid formulas. While school funding is extremely complex, the current system changes the distribution of state general aid and results in higher school property taxes, even for some districts with no students in these programs.
In 2015, Wisconsin altered its funding mechanism for the Racine and statewide private school choice programs, as well as the Special Needs Scholarship (SNSP) and Independent Charter School (ICS) programs. Previously funded by a separate state appropriation, new students in these programs are now factored into public school revenue limits and state general aid formulas. The state deducts payments for these programs from the general aid of districts where the student resides and uses those funds to pay for the programs. This new method, which initially had minor effects, has grown to cause significant impacts, including an estimated $337 million in higher school property taxes for the 2024-25 school year.
The current funding system adds complexity and obscures the true impacts, effectively replacing aid deductions with property taxes. It also alters the distribution of state equalization aid, leading to “hidden” property tax shifts even for districts without students in private choice or charter programs. The shift from state aid to local property taxes means that while a district’s resources for its public students might remain the same, local property taxes increase to cover the cost of the choice programs.
To simulate the impacts of this funding mechanism, Forward Analytics researchers removed these students and their costs from 2024-25 calculations, a process known as “decoupling.” They found that for most districts, revenue available for their students would be largely unaffected when the programs were fully separated. Decoupling would lead to property tax reductions for 407 of 421 districts. While benefiting Wisconsin property taxpayers with a projected $337 million reduction in school property taxes for 2024-25, this decoupling would have cost the state an estimated $343 million in that fiscal year, an amount likely to increase in the future.
While the study shows the impacts of a full decoupling, researchers noted that this process would take four years under current law. “During the first two years, there would likely be some volatility in school property taxes, with relatively large declines in the first year followed by increases in the second,” said Forward Analytics Director Dale Knapp. “For nearly all districts, though, these second-year increases would still keep school property taxes below current levels.”
