1. Paying for a Public Externality
Schools
Paying for a Public Externality

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

3. 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...";

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

5. 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

6. 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

7. 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 $
$ ,769.30
$ 48,927
244
Franklin
$ 214,030 $
$ ,589.76
$ 65,036 4
Cashton
$ 91,986 $ $
$ 42,220
407

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

9. 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?

10. The Situation Today

11. 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