How School Spending is Limited by the State
By Alayna Burger, Business Manager, School District of Superior
What does Revenue Limit mean for the School District of Superior? Wisconsin Act 16 implemented revenue limits beginning with the 1993-94 school year which means the School District of Superior revenue limit is the maximum amount of revenue that may be raised through state general aid and property tax for the General, Non-Referendum Debt and Capital Expansion Funds, also referred to as Fund 10, 38 and 41 respectively. The maximum limit is based upon enrollment changes, the Consumer Price Index, and School District of Superior’s prior year controlled revenue. The results of this computation can have significant impact on the School District of Superior’s finances, as general state aids and the General Fund tax levy can comprise anywhere from 70-90% of a districts total General Fund Revenues.
There are four steps in determining the School District of Superior’s maximum revenue limit:
Step 1: The revenue base is created by summing the district’s General Aid amounts and local levies for General Operations (Fund 10), Capital Projects (fund 41), and Non-Referendum Debt (Fund 38) from the previous year. The per-member revenue base is computed by dividing the revenue base by a “base” membership average (3 years rolling average).
Example: Assume School District of Superior received $3,000,000 in General Aid and levied a total of $2,850,000 for Funds 10, 41 and 38 in the previous year. Our revenue base would be $5,850,000. Then, assuming the base membership average for the district was 650, the per-member revenue base would be $9,000.
Step 2: State law provides for every district to add a per-pupil inflationary index at this point to the per-member revenue base from Step 1 (if Governor’s budget allows)
Example: Assuming the inflationary increase was $250 per member, our district per-member revenue base of $9,000 would be increased by $250. The result, $9,250 per member, is known as the “maximum allowable revenue per member.” If our district per-member revenue amount from Step 2 was less than an established per-member minimum, our district’s per-member allowable revenue amount would be increased to the minimum amount.
Step 3: Compute a “current” three year membership average. This average uses the (2) previous year’s membership plus membership for the current year, the year for which the limit is being calculated.
Example: So, assuming the three years of data are 650, 700, 675, the “current membership average” computation would be ((650+700+675/3, getting a result of 675.
Step 4: Compute the “maximum allowable revenue” by multiplying the maximum allowable revenue per member ($9,250) by the new three-year average (675), resulting in $6,243,750.
The final revenue limit maximum is reduced by the October 15 Aid Certification to arrive at the School District of Superior’s total maximum amount to be collected through controlled local property tax levies.
I hope this article helps shed some light on how the funding works for our public education as we continue to provide all children with an excellent education.
