Paying for a Public Externality Schools Paying for a Public Externality

Question We said in our last class that public schools are a positive externality. WHY?

The Constitution The Wisconsin Constitution, Art X, Sec. 3 states: "The legislature shall provide by law for the establishment of district schools, which shall be as nearly uniform as practicable; and such schools shall be free and without charge for tuition to all children between the ages of 4 and 20 years...";

Funding Sources for Schools Property Taxes State Aid Federal Grants School Fees

Property Taxes Based on the mill rate (tax rate per $1,000 of assessed home value) Mill rates vary by district So, too, do home values Median Home Values: McFarland: $236,087 Franklin: $214,030 Cashton: $91,986

Mill Rates The mill rate is the tax rate applied per $1,000 of assessed value of the house Varies from district to district Mill Rates McFarland: $12.10 Franklin: $12.10 Cashton: $9.56

Median Property Tax Burden Average Teacher Salary A Comparison District Median Home Price Mill Rate Median Property Tax Burden Average Teacher Salary Teacher Salary Rank McFarland $ 236,087 $ 11.73 $ 2,769.30 $ 48,927 244 Franklin $ 214,030 $ 12.10 $ 2,589.76 $ 65,036 4 Cashton $ 91,986 $ 9.56 $ 879.39 $ 42,220 407

McFarland The McFarland School Board levied property taxes of $10,998,903 for the 2016-17 school year. We also receive $11,447,276 from the State of Wisconsin The total expenditure that McFarland Schools have budgeted for 2016-17 is $35,959,564 This does not include the money for the referendum

What’s Wrong with Education? Based on this little introduction to the school budget process, what issues can you see with public schools in Wisconsin?

The Situation Today

Some Inspiring Thoughts The state caps how much revenue school boards can raise from their property tax levy In the last ten years, there have been 1,063 total referenda asking voters in school districts to exceed their state revenue caps Also, fewer people are entering the education field, and more and more teachers are leaving the profession prior to retirement age