We Can't Veto Our Way to Better School Funding

Wisconsin Governor Tony Evers recently made headlines with his creative use of the line-item veto power. Deploying his pen like a scalpel, Evers struck not just words but individual digits and punctuation marks, extending an education funding formula increase meant for the “2023-24 and 2024-25 school years” to instead span the years “2023-2425.” This four-century boost to school budgets was dramatic enough to get attention not just from state outlets, but also from major national and even international publications. The Wall Street Journal even crafted a fun bit of graphics in what might be the first-ever animation of a governor’s veto.

The wet-blanket truth, though, is that the school funding impact of this veto falls short of the breathless headlines. These strokes of the pen didn’t “boost school funding for 400 years.” They didn’t actually increase the state’s aid to schools at all. Instead, the governor raised something called the “revenue limit,” a fiddly bit of Wisconsin school funding fine print that requires a closer look.

The revenue limit is exactly what it sounds like: a cap on how much revenue a school district may receive and spend, from both state aid and local property tax dollars. The legislature meant to increase the limit by $325 per student in each of the next two years. Evers’ change raises the limit annually for a much longer period. But the budget didn’t promise state dollars to actually cover that whole $325 per student—not this year, and certainly not every year for the next four centuries. Instead, it increased the amount that districts are allowed to spend on students’ educations. Districts will still have to raise most of the new dollars locally, from property tax dollars.

It’s not all bad news. A too-low revenue limit really does constrain district budgets, and $325 is a larger increase than the legislature has ever made before. (The last increase written into law was $179 per student.) And when the state does step up its education spending, unless the revenue limit is raised, the new state dollars will just replace local ones, transforming a seeming education investment into property tax relief. So the revenue limit really did have to go up for students to get more resources. The 400-year time span, too, is more than a gimmick. It’s true that this is just a piece of legislation, and it can be altered with new legislation next term. But the governor’s veto does create a presumption of annual increases, and it might be more politically challenging for future legislatures to actively cancel a school budget boost than it would have been to passively leave the number unchanged. Still, this veto doesn’t amount to a truly long-lasting increase in state support for schools.

“Raising school budgets” by lifting the revenue limit also has the troubling effect of shifting more of the revenue burden onto local property tax dollars, which are the most inequitable and regressive part of the school funding equation. School districts with richer property tax bases—primarily, those with higher-priced homes—are able to raise more local funding with less effort than school districts without that advantage. If Wisconsin boosts the revenue limit without making a similarly larger investment of state funds, that will give the most help to districts that can raise local revenue with the greatest ease.

Take Wisconsin’s Gibraltar Area School District, one of the state’s highest-funded districts. In 2021, the most recent year for which federal data is available, Gibraltar had over $28,000 in per-student revenue. Of that, a whopping $20,863 came from local funds. And it was able to collect that money with one of the lowest property tax rates in the state—0.329% in 2021, compared to a state average of 0.922% for all K-12 school districts. It’s no wonder that they were able to raise so much, even with so little tax effort. While the median owner-occupied home in Wisconsin is worth $200,400, according to the United States Census, that value in Gibraltar Area School District is much greater, at $330,000. And that figure doesn’t capture the full extent of the district’s advantage. The district, which sits on a peninsula in Lake Michigan, is also full of high-value vacation homes, many of which are priced in the millions.

Contrast that with Merrill Area School District. In 2021, its revenue was half what Gibraltar’s was, at just over $14,000 per student. Of that, less than 40% was raised from local sources, compared with 73% in Gibraltar. But the district really is trying to raise local property tax dollars—its school tax rate that year was 0.861%, close to triple Gibraltar’s rate and nearing the state average. Merrill has a much steeper climb, though. The median owner-occupied home in the district is worth just $130,100, and unlike Gibraltar, Merrill is landlocked, and certainly not a tourist destination. Without those lakefront vacation houses, how much can Merrill benefit from being allowed to collect more local revenues for schools? Districts like Merrill need state support, not just permission to raise taxes.

Governor Evers did what he could to boost school funding within the limits of his powers. The reality, though, is that a veto can’t create funding that the legislature didn’t promise. With his revenue limit change, Evers was able to give districts greater running room. But not everyone has the property tax base to go the distance—especially without overburdening the school community with too-high tax rates. Gleeful headlines aside, the governor can’t veto his way out of Wisconsin’s school funding woes. And Wisconsin mirrors the nation: Nearly every state suffers from the problem of unfair school funding driven by unequal property tax bases. As long as we root our school funding system in local property tax revenues, we will continue to fall short of true solutions.