Abstract
Wisconsin’s system of funding public education is highly complex. The stated goals of state education policy is to reduce inequalities in spending and revenues among local school districts by substituting state funds for local property taxes, and to assure that all students have access to a high-quality education regardless of where they live. The primary purpose of this paper is to develop two statistical indicators that will assist policymakers in determining whether the state’s school funding system has achieved its goals. Drawing on an extensive literature on the costs of education, I calculate for each school district’s cost-adjusted spending per pupil. To assess the state’s success in reducing the linkage between per pupil property wealth and per pupil spending, I calculate benefit-effort ratios. These are defined as each district’s cost-adjusted spending divided by its property tax rate. The smaller the variation in benefit-effort ratios across school districts, the greater the degree of funding equity. I then identify Wisconsin school districts that have relatively low levels of cost-adjusted per pupil spending and districts that have low benefit-effort ratios. Finally, I simulate the allocation of state equalization aid using a version of the state’s equalization aid formula that accounts for differences across school districts in educational costs. The results show that accounting for educational costs would result in more state equalization aid going to school districts with relatively low levels of per pupil property wealth and high levels of student poverty.
Information
- Series: La Follette School Working Paper No. 2024-002
- Authors: Andrew Reschovsky