As the Legislature begins working on the Wisconsin State Budget, a dangerous idea to give school vouchers their own separate line item could become a huge drain on resources. | Getty Images Creative

The top issue Wisconsinites brought to legislators’ attention at budget hearings around the state last month was the need to adequately fund public schools.

But now, as the Legislature’s powerful budget committee is beginning to work on the budget in earnest, a low-profile plan that never came up in those public hearings aims to turn school vouchers into a statewide entitlement, sucking up all the resources that might otherwise go to public schools and putting Wisconsin on a path to a full–blown budget crisis. 

The plan, contained in two bills that failed in the last legislative session, would stop funding school vouchers through the same mix of state and local funding that supports regular public schools, and instead pay for school vouchers just out of the state’s general fund. 

“It’s certainly something that I personally support. … I’m sure it will be part of the discussion,” Rep. Mark Born (R-Beaver Dam), co-chair of the powerful Joint Finance Committee, told Lisa Pugh on Wisconsin Eye when she asked about “decoupling” Wisconsin voucher school funding from the rest of the school finance system.

“Decoupling” would pave the way for a big expansion in taxpayer subsidies for private school tuition. While jettisoning the caps on available funds and enrollment in the current school formula, voucher payments would become an entitlement. The state would be obligated to pay for every eligible student to attend private school. It’s worth noting that most participants in Wisconsin’s voucher programs never attended public school, so what we are talking about is setting up a massive private school system with separate funding alongside the public K-12 school system. That’s more than Wisconsin can afford.

Anne Chapman, research director for the Wisconsin Association of School Business Officials (WASBO), has followed the issue closely. “It could come up last-minute, on very short notice,” she warns. 

She worries that Wisconsin is following the same path as other states that have steadily expanded public funding for private schools without accurately assessing what the expansion would cost. In a recent WASBO paper, “The price of parallel systems,” Chapman writes that Wisconsin already ranks third among states with the highest proportion of state education dollars used in private schooling options (9%). The top two states, Florida (22%) and Arizona (12%), she writes, are “cautionary examples.” 

Florida’s universal voucher program will cost the state $3.9 billion this year. The state, which until now has been running budget surpluses, is projecting a $6.9 billion deficit by 2027-28, fueled by the voucher expansion along with tax cuts. Arizona is also facing much bigger than expected costs for its universal voucher program. After projecting it would cost $64 million in 2023-24, the state found that it underestimated the cost of vouchers by more than 650%. The real cost of universal vouchers in Arizona in 2023-24 was  $738 million. The result: a huge budget deficit and significant cuts to public schools.

Wisconsin, which launched the first school voucher program in the nation in Milwaukee 35 ago, has steadily increased both the size and per-pupil expenditures of its system of voucher schools. That’s despite a research consensus that school vouchers have not improved academic outcomes for students and, in fact, have done significant harm.

Testifying recently against a school voucher bill in Texas, University of Michigan professor and school voucher expert Josh Cowen described the “catastrophic” results of vouchers on educational outcomes across the country over the last decade.

‘Horrific’ voucher results

Cowen has been evaluating school vouchers since the 1990s, when the first pilot program in Milwaukee had a measurable, positive impact on the 400 low-income kids who used vouchers to attend traditional private schools. As school vouchers expanded to serve tens of thousands of students and “subprime” operators moved in to take advantage of taxpayer dollars, however, the results took a dramatic downturn. Cowen described the “horrific learning loss” he and other researchers have recorded over the last decade among kids who started in public school and then moved to private school using vouchers. He was used to seeing trends in education that simply didn’t work to improve outcomes, he told the Texas legislators, but “it’s very rare to see something that harmed kids academically.” The worst drops in test scores, he said, came in 2014-15 — the same year that states began taking the programs statewide. He concluded that the smaller programs that had paid close attention to students and offered them a lot of support became something entirely different when vouchers were scaled up. Yet despite the abysmal results, more and more states are moving toward universal voucher systems.

Imagine, Cowen told the Texas legislators, if “30 years ago a vaccine showed some positive effects in clinical trials for a few hundred kids.” Then, when the vaccine was approved and used on thousands of children, “the health effects became negative, even atrocious.”

“No one would say, ‘let’s just hang our hat on the pilot and focus on results from 30 years ago,” Cowen said. But that’s exactly what’s happening with school vouchers. The kids vouchers were originally supposed to help — low-income children in underresourced schools — have suffered the most. 

Studies from research teams in Louisiana, Indiana, Ohio and Washington, D.C., show learning losses for kids who left public school to attend voucher programs that surpassed the learning loss experienced by students in New Orleans after Hurricane Katrina or by children across the country from the COVID-19 pandemic, Cowen said.

Instead of helping those struggling students, who often attend the “subprime” schools Cowen discussed, the voucher programs in Wisconsin and other states mostly provide a taxpayer-financed benefit to private school families — 70% of whom have never put their kids in public school.

Anti-government ideologues and school choice lobbyists are selling a faulty product with the rapid expansion of school vouchers.

Part of the scam is the effort to hide the true costs from taxpayers. That’s the part Chapman, the school business expert, is worried about. As school districts struggle with lean budgets, under the current system, at least local taxpayers can see how much they are paying to support the voucher schools in their districts. If the Legislature succeeds in moving the cost of school vouchers into the general statewide budget, that transparency will be lost. And, at the same time, the state will open the door to unlimited spending on vouchers, no matter how expensive the program becomes. 

School choice advocates in Wisconsin have long pushed for “a voucher in every backpack” — or universal eligibility for the private school voucher program.

“Eligibility” doesn’t mean the same thing as “access,” however: In Wisconsin voucher schools have a track record of kicking out students who are disabled, challenging to educate, LGBTQ or for any other reason they deem them a bad fit.

Those students go back to the public schools, whose mission is to serve all students. In contrast, private schools in the voucher system can and do discriminate. Yet, Chapman reports, we are now spending about $629 million for Wisconsin’s four voucher programs, which serve 58,623 students. That’s $54 million more than the $574.8 million we are spending on all 126,830 students with disabilities in Wisconsin, as school districts struggle with the cost of special education. 

Federal tax deduction windfall for voucher schools

As if that weren’t enough, at the federal level, the Educational Choice for Children Act of 2025 (ECCA), currently being considered by Congress, would give a 100% tax deduction on donations to nonprofits known as Scholarship Granting Organizations, which give out private K-12 school vouchers.

Normally, donors to nonprofits can expect a tax deduction of 37 cents on the dollar at most. The 100% tax deduction means financial advisers across the country will push clients, whether they are school choice advocates or not, to give money to voucher schools. Under the bill, contributors would also be allowed to give corporate stock and avoid capital gains tax. “This would allow wealthy ‘donors’ to turn a profit, at taxpayer expense, by acting as middlemen in steering federal funding into private K-12 schools,” the Institute on Taxation and Economic Policy reports. ITEP estimates that the ECCA would cost the federal government $134 billion in foregone revenue over the next 10 years and would cost states an additional $2.3 billion.

The very least we can do as citizens is to demand accountability and transparency in the state budget process, before we blow all of our money on tax breaks and tuition vouchers for people who don’t need them. 

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Parents with the "Learn in My Shoes" campaign including Amanda Sherman and Melanie Grosse stand before the Joint Finance Committee at a public hearing in West Allis. (Photo by Baylor Spears/Wisconsin Examiner)

Wisconsin’s special education reimbursement rate has been a concern for public school advocates for many years, but with districts’ reliance on school referendum requests increasing and federal support in doubt, the state’s reimbursement rate is quickly becoming one of the top issues this budget cycle.

Public school districts currently get about 30% of their special education costs reimbursed by the state. Advocates have called to increase that to at least 60% and as much as 90%, which is the amount that private and charter schools participating in the state’s voucher programs already get.

Tiffany Schanno, a Sheboygan parent, and Melissa Custer, a Grafton parent, have been showing up at state budget hearings and meeting in the Capitol to bring awareness to the experience of families seeking special education services in schools.

“We both have kids with disabilities who are trying to access special education, and we both experienced a lot of obstacles just trying to get our children accessible education, and the thing that we discovered is that it all comes down to funding,” Schanno said in an interview with the Examiner. “There’s only so much as far as resources to go around, so a lot of times families are competing against each other for services.” 

The pair put together a display — titled “Learn in My Shoes” — that included letters from families about their children’s experience receiving services and financial strains on schools. They placed the letters in a pair of children’s shoes. Custer said they thought having a visual representation and sharing stories would give lawmakers a “small taste” of the reality.

One letter described how educators and paraprofessionals have helped 12-year-old James “communicate with peers, become more confident and able to share more of who he is in meaningful ways.” James received important supports thanks to a “persistent” parent who said not all parents understand the process or know how to advocate for what their children need.  

“Because public school budgets are stretched to the point of hundreds of referendums over the past few years, families don’t ask for what they need because they don’t want to be thought of as burdensome,” the parent wrote. “Our family can find workarounds to an extent, but many others cannot. All children deserve an equal opportunity to a sound public education, and funding that keeps up with cost increases.”

Another parent said her son, who has Prader-Willi Syndrome, requires specialized support to navigate school safely and help with emotional regulation, transitions and physical safety. 

“Due to funding shortages, services are stretched thin… ” the parent wrote. “My children — and thousands of others across Wisconsin — deserve a chance to succeed, to feel safe, and to receive the support they need to reach their potential. Please make this a priority.” 

Schanno and Custer delivered the shoes and letters to lawmakers.

Schanno said some lawmakers expressed skepticism that additional state money would actually be used for special education. She said that isn’t a “valid argument” since federally mandated special education costs are carefully tracked.

“It’s not like you’re just giving a district a whole bunch of money and trusting them to use it for the right thing,” she said.

“Ultimately, what I took away from our visits… is that we have a long way to go with people understanding more about disability in general … and about the value in educating people who are different than they are,” Schanno said.

Proposals in discussion

Gov. Tony Evers proposed in his state budget that the reimbursement rate be raised to 60%. Republican lawmakers, including Sen. Howard Marklein (R-Spring Green), have acknowledged education funding as a top concern for  the public, and some, including Rep. Patrick Snyder (R-Weston), have said they want to put more money into  special education, but it is unclear what Republican lawmakers will support. 

As Republican lawmakers seek a deal on tax cuts, WisPolitics reports that spokesperson Britt Cudaback said Evers “expects Republicans to come to the table on investing in education at every level, among other critical priorities, in order to move forward.”

During the last budget cycle, lawmakers increased the special ed reimbursement rate, though Sen. Chris Larson (D-Milwaukee) notes it was a sum-certain rate, meaning there is a finite amount of money available, so the rate of reimbursement is not guaranteed as funds run low. The current reimbursement rate is hovering around 30%.

“School funding is complex” and special education funding is the “baseline that we absolutely should be doing,” Larson said. Special education funding in Wisconsin peaked at 70% in 1973 and at one point was as low as about 24.5% in 2018-19.

Larson supports increasing the rate to 90%. He said he thinks Evers’ 60% proposal is looking at it “from a political standpoint of what he perceives as what he wants to start the negotiations at in the budget with Republicans instead of what’s needed” and also taking into consideration other budget priorities. 

“That’s helpful and that would be significant and still double the percentage of what schools are currently getting, and I appreciate that…” Larson said. “I would hope that the governor would say 60% or veto.”

Larson also noted Evers’ budget would change special education reimbursement from sum certain to sum sufficient — so reimbursements at the set rate would be guaranteed.

Larson said he hopes his Republican colleagues support boosting the rate. 

“It still baffles me that some people think this is a partisan thing. Schools all over the state need help. The districts that are going to referendum are rural, they’re urban and they’re suburban. There’s nobody who’s special who is dodging this. Everybody is getting screwed over by the state,” Larson said. “I hope that the folks, the Republicans, who hold the narrow majority in the Assembly and in the Senate, would listen to their constituents who are saying, ‘Stop throwing this on us to cover your gap.’”

Special ed reimbursement could relieve referendum pressure

The discussion about school funding, especially for special education, comes as school districts have increasingly come to rely on referendum requests. Public school leaders, advocates and Democratic lawmakers have said increasing the special education reimbursement to at least 60% could help relieve some of that pressure.

Anne Chapman, research director for the Wisconsin Association of School Business Officials Association, said that increasing special education funding by a significant amount would allow school districts to not have to pull as much money from their general funds for the mandated services.

“You would see way fewer referendums, and you would see kids surge with better programs,” Chapman said. 

According to the Wisconsin Policy Forum, just this year there were 94 referendum requests across February and April elections with about a third of those representing “retry” efforts. As schools continue to rely on referendum requests to meet costs, Republican and Democratic lawmakers are seeking ways to change the dynamic, though the latter are focused on providing additional state funding, while the former are focused on implementing new restrictions. 

Rep. Christian Phelps (D-Eau Claire) said a memo from the Legislative Fiscal Bureau that compares recent referendum requests to the amount of unreimbursed special education costs illustrates the correlation. He said he asked for the memo after noticing a detail about the finances of the Eau Claire School District. 

“Eau Claire’s unreimbursed special education dollar amount was equivalent to the amount of money that they were asking for in their referendum just to not go too far into the red in their budget,” Phelps said, adding that he wondered “how widespread is this pattern?”

The 128 school districts that sought operating referendums in 2024, a record-breaking year, had over $488 million in unreimbursed special education costs for the 2022-23 school year, according to the Legislative Reference Bureau. The bureau’s memo also found that about one-fifth of the referendum requests in 2024 were equal to or exceeded special education costs that were unreimbursed by the state in 2022-23.

Some examples include: 

• Bangor School District had a recurring referendum request for $900,000 that failed in 2024. Its unreimbursed special education costs were $973,299 in 2022-23. 
• Edgerton School District had a $3,500,000 recurring request that passed. Its unreimbursed special education costs were $3,520,303. 
• Eau Claire School District had a successful $18,000,000 request. Its unreimbursed special education costs were $17,933,991. 

In some cases, a referendum request was for more than the unreimbursed costs, but even those were still close. Hamilton School District passed a $7,600,000 recurring referendum in 2024. The total of its unreimbursed special education costs was $6,128,870. 

“Funding special ed fully lifts all boats,” Phelps said. “When we have an underfunded special ed system, we are creating discrimination and disparity against students with disabilities. The services are mandated, so we’re paying for them one way or the other.” He added that right now, property taxpayers are making up for the state’s low reimbursement rate, and school districts are depleting their general funds. 

“Who loses when we’re stretching funds like that? Literally, every kid,” Phelps said, adding that funding special education through referendum isn’t effective because it’s also unpredictable. 

“When referendums happen, they either pass or fail, so now this district is better off than that district for no reason other than the fact that they both had to ask their voters for a referendum, and so we have disparities… when there is literally a pile of billions of dollars sitting around,” Phelps said, referencing the state’s $4 billion budget surplus. 

“It’s a gold mine in state budgeting to find something that you could do that just so clearly lifts all boats,” Phelps added. 

While Phelps said 60% is a compromise, he said the request from Evers is significant.

“It was not that long ago, public ed advocates were literally getting laughed out of rooms when they would ask for 60%,” Phelps said. “Now, the pressure is just too big, and you’re not getting laughed at for asking for 60[%] anymore.”

Derek Gottlieb, an associate professor at the University of Northern Colorado and senior research director for School Perceptions, an education research firm, also said the state could pick up more of the cost of special ed than Evers’ proposed 60%. 

“Even if the state didn’t touch revenue limits, even if the state continued to fail to raise just revenue limits upward to keep pace with inflation, we would see many, many, many fewer operating referendums if the state just paid 100% of special education expenditures…” Gottlieb said. “It is shameful, frankly, that the state has done less.”

Federal upheaval shadows special ed funding debate 

During a virtual public forum in April, Wisconsin Department of Public Instruction leaders said the discussion about federal and state special education funding are connected.

State Superintendent Jill Underly said as reimbursement rates remain low, local communities will continue to take on the cost of the federal- and state-mandated services. 

The special education reimbursement rate “is rather low — it’s 29% now, based on last year’s numbers — but the federal government also has a reimbursement rate, and it’s even lower,” Underly said during the session. “What this would indicate is that our schools are still going to provide the services, because that’s what our schools do. It’s just that they’re not going to be reimbursed fully for them, so the burden is going to shift more to the local school districts to compensate the costs.”

The comments come as the future of the federal government’s role in special education is in flux. The Trump administration has pushed to close the U.S. Department of Education, slashing its workforce and seeking to move “special needs” programs to the Department of Health and Human Services. 

During the forum, Deputy State Superintendent Thomas McCarthy noted that when it comes to federal funding “special education is one of the things that, by and large, everyone has said, we’re not going to reduce the states now.” 

“That is what I know today, ask me next week, it could be on the chopping block,” McCarthy said. Trump’s recent “skinny budget” proposal seeks to cut 15% from the education budget, but says it isn’t cutting funding for special education, though it does propose consolidating several Individuals with Disabilities Education Act (IDEA) grant programs into one. 

As the upheaval creates uncertainty, DPI leaders encouraged Wisconsinites to take the  opportunity to advocate for more funding. 

When the Individuals with Disabilities Education Act became law in 1975, the federal government said it would fund 40% of special education costs, Underly noted. The federal contribution now hovers around 10%.

“When they are arguing that they’re going to make things more efficient at the U.S. Department of Ed or in the federal government… What are they going to do with those savings? This would be a great example. Well, let’s authorize Congress to reimburse up to 40% of special education costs,” Underly said.

“Not only do we need the current level of funding, we need more funding… so be having that conversation with your federal elected officials [and] also be having it with your state elected officials,” Assistant Deputy State Superintendent Sara Knueve said. “We’re in the heat of that conversation about what’s the state’s reimbursement rate and they’re connected.”

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