Analysis by Bob Zientara

The state of Wisconsin funds area school districts with much of the money they need to make payroll for teachers and staff, buy equipment and supplies, and pay monthly bills.

But there are many ways for districts to collect the money, and it doesn’t all come at once, according to information received last week from the Wisconsin Department of Public Instruction.

Between Monday, June 10, and a week later, Monday, June 17, 2019, the state transferred nearly $2 billion to the bank accounts of hundreds of school districts across Wisconsin – including more than $6.3 million to the Barron Area, Cameron and Prairie Farm districts.

The DPI said “general school aids account for approximately 79 percent of state funding paid to Wisconsin’s public schools. General school aids, along with local property taxes, represent the two largest sources of funding for public schools in Wisconsin.”

The state aid payments underline two facts:

• Our local school districts get their largest general state aid payments only after the end of the academic year, which requires some careful financial work to stay in the black during the school year, itself.

• School funding is incredibly complicated. That makes it difficult for the average taxpayer (parent or not) to understand (let alone those of us who have to write about it).

Bank it or borrow it

Here are two examples that illustrate that first fact.

Barron Area School District received nearly $4 million of its total $11.5 million “equalization aid” on June 17 (see infographic). That was more than a week after the schools closed for the year.

Previous quarterly payments to Barron were made in September and December, 2018, and March of 2019. But they weren’t even close to the total Barron collected on June 17. The largest previous payment to Barron was just under $2,823,000 in March 2019.

Because the funding ebbs and flows through the school year, it requires local districts to bank the aid they get and use it on a pay-as-you-go basis.

Or it can require borrowing.

The Cameron School District had to borrow against future aid payments during the fiscal year that ended last Sunday -- June 30, 2019.

Even so, the district expected to pay only about $5,000 in interest before closing out the loans at the end of the fiscal year, according to information shared at a Cameron School Board meeting late last year.

Confusing aid categories

Along with the “big-ticket equalization” aid payments, local districts also picked up several other kinds of aid during the first weeks of June.

Downloadable spreadsheets for the districts say that districts collect payments to help finance the so-called “achievement gap reduction” program. The infographic shows this money under the title: “Achievement.”

According to the Department of Public Instruction, the achievement gap reduction program was created in 2015 and pays for things like one-to-one tutoring by a licensed teacher, instructional coaching for teachers, and creating smaller pupil-teacher ratios in classrooms across the state.

To qualify for the money, districts have to set goals that show how they will reduce the achievement gap between low-income students and the general school population.

June payments to local schools also included transportation aid and two kinds of aid for special education.

On June 17, Cameron was paid $27,887 for the money it spent on the so-called “high cost special education” program.

The Department of Public Instruction says that a district can collect “high cost” special education aid if it needs to spend more than $30,000 to educate a particular special-needs student.

Districts usually can’t reveal much about these payments, in order to protect the privacy of the students and their families.

Keeping local kids in local schools

Of the three school districts in the News-Shield circulation area, Barron Area is the only one to have “withheld” state aid -- a total of $1,521,009, according to Department of Instruction figures.

The underlying reason why that money was not sent to the school district is connected to open enrollment, according to Andrew Sloan, director of finance for the district.

“Districts always get their full allotment of state aid set in October,” he said Thursday, June 27.

However, at the end of the school year, the state “reconciles” state aid and open enrollment finances, Sloan added.

Open enrollment allows parents to send their children to the district of their choice, and districts account for that by counting students as “open-enrolled in” and “open-enrolled out.”

“When the state makes the actual final cash (aid) payment to a district, (it) nets the open enrollment payment against the final aid payment,” Sloan said.

For example, he added, “if a student open enrolls from Barron to Chetek, Barron does not physically write a check to Chetek. Instead, the state summarizes all open-enrollment student movement, and summarizes it for one transaction.”

Of the three school districts in the News-Shield circulation area, Barron Area is the only district with net open enrollment out, according to Department of Public Instruction figures.

In other words, it’s the only one of the three districts in which parents send more of their kids to other districts than those from outside the district who send their children to Barron.

The “withheld aid” represents state aid the Barron Area School District might have collected, if the “open enrolled out” students remained in Barron schools.

What’s ahead?

Following a timeline required by state law, the Department of Public Instruction released an estimate Monday of the general school aids each public school district will receive for the 2019-20 school year.

General school aids are the largest form of state support for public schools in the state. Wisconsin statutes require the department to publish estimated aid amounts by July 1 each year. The estimate can help school personnel to complete their annual budgets and project changes in property tax levies. Estimated amounts are subject to change because they are based on proposed, not final, state budget appropriations for 2019-21 as well as budgeted, not audited, school district data from the 2018-19 school year. On Oct. 15, the department will certify amounts for 2019-20 general school aids based on audited data and finalized state budget numbers.

Based on preliminary figures (subject to change) the Barron Area School District is estimated to receive $11,640,000, an increase from last year of $138,284. The Cameron School District is estimated to receive $7,203,592, and increase of $258,384. The Prairie Farm School District is estimated to receive $2,333,004 and increase of $110,389 over the previous year. Rice Lake is estimated to receive $10,751,775, an anticipated increase of $252,044.

Estimated general school aids for 2019-20 total $4.740 billion for the state, representing a $83.2 million (1.8 percent) increase over last year. Due to changes in the aid deduction from Milwaukee Public Schools for the Milwaukee Parental Choice Program, the estimated increase in aid payments to districts is $83.7 million. Of the state’s 421 school districts, 59 percent (248) are estimated to receive more general aid in 2019-20, while 40 percent of districts (168) are estimated to receive less; five districts will have no change in the aid between the 2018-19 and 2019-20 fiscal years. A district’s general aids can increase or decrease due to changes in any of the three local factors comprising Wisconsin’s general equalization aid formula — property valuation, enrollment, and shared costs — or from changes to the state appropriation.

District aid estimates can be found on the department’s School Financial Services website, in the general aid section. Estimates are available as “Summary by Alphabet” and “Summary by Percent.” The department’s July 1 aid estimate does not include per pupil categorical aid, which will be based on student membership from the 2019-20, 2018-19, and 2017-18 school years (third Friday in September count). Per pupil aid will be paid in March 2020. Proposed budget language would set this aid at $679 per pupil.