School Finance 101 by Ben Irwin Business Manager Parkview School District

Components of School Finance The WUFAR Revenue Limits Equalization Aid Tax Levy Equalized Value of Property Membership Debt 2

The WUFAR School districts in Wisconsin use the Wisconsin Uniform Financial Accounting Requirements (WUFAR) to categorize all of their finances. The WUFAR is fund accounting, which separates each revenue and expenditure into a specific fund. A majority of school finances are held in the General Fund (Fund 10), but there are also other funds for areas like food service and special education. 3

The WUFAR 4

Revenue Limits Overview School districts have a limit on their revenues they are able to collect each year. Money calculated in the revenue limit formula comprises about 85% of a district’s revenue. The revenue limit is Equalization Aid plus Property Taxes. 5

Revenue Limits 6 Tax Levy Equalization Aid Revenue Limit

Revenue Limits Key Components Prior-year aid. Three-year history of student membership. Property values. Prior-year base revenue per member. Allowable per pupil change. 7

Revenue Limits YearPer Pupil $ $ $ $ $ $ $ $ Allowable Per Pupil Change Each year, districts are allowed to add in a per- pupil increase. Traditionally this number was indexed for inflation. However, with the recent changes to the law, this number has been limited in recent years. 8

Equalization Aid Overview School districts receive money from the state each year called equalization aid. Similar to revenue limits, many factors are involved when calculating equalization aid. For most school districts, this is their largest source of revenue. 9

Equalization Aid Key Components Property values (more aid will go to “Property Poor Districts”). Prior-year spending. Membership from September and January counts. 10 Spending Eligible costs Membership Equalized Valuation of Property

Tax Levy 11 Revenue Limit Equalization Aid Tax Levy

Overview Limits are set from the state on how much a district can tax. School districts can seek additional taxes through non- referendum debt and community activities. 12

Mill Rate The mill rate is a calculation of taxes per $1,000 of equalized values. Useful for comparing school districts, but a poor reflection of what taxpayers will see on their bill. Individual tax levies are separated by municipality and then by individual property values. 13

Equalized Value of Property Overview Determined by the state Department of Revenue. Used to divide property taxes between municipalities in the district. Once we tell each municipality how much they owe the district in taxes, they divide that number among property owners based on assessed values. 14

Membership Overview Outside of state factors, membership will have the largest impact on school finances. The revenue limit will use a three-year average of membership from student counts in September. Equalization Aid will use September and January counts from last year. 15

Membership Membership vs. Enrollment The membership counts used for DPI are different than the physical head count from the district. The membership accounts for all students that are residents in the district. Students that live in the district, but do not attend school here will still count for membership. Also, summer school students are only counted at 40% and students that are not here all day are counted at a certain percentage (4k or KG). 16

Membership Open Enrollment Students are allowed to attend a different school from their resident district if they choose to. School districts are still able to count the open enrolled student in their revenue limit and equalization aid count numbers. However, districts will pay a large portion of the open enrolled student’s tuition to the district they are attending. Base Revenue per Member (amount received for each resident student) $9, Open Enrollment Tuition (amount that we must pay for each resident student that attends a different school) $6,867.00

Debt School districts can burrow up to $1,000,000 without elector approval (Fund 38) and all of this debt must be repaid within the revenue limit. Beyond that, school districts must get voter approval through a referendum (Fund 39). When referendum is passed, a school district has the authority to go beyond the revenue limit. 18

Debt Short-Term Borrowing Due to the variances in school revenues and expenditures, a lot of school districts in Wisconsin will short-term borrow each year. While expenditures are fairly consistent each month, revenues come in lump sums, which can impact a school district’s cash flow situation. 19

Questions? Ben Irwin – Business Manager ext