Wisconsin State Superintendent Jill Underly called for the state to overhaul the school funding formula in her sixth State of Education address Thursday, saying that the state “simply cannot afford to wait any longer.” 

Underly delivered the address less than six weeks before the November election, when Wisconsin voters will decide who she will be working with in the governor’s office and in the state Legislature on the next state budget. She will need their support to get the funding for the budget proposals she has begun to formulate.

The Department of Public Instruction so far has only submitted the first part of its budget request, which covered funding for libraries, support for children who are deaf and blind, public libraries, cybersecurity, technology modernization and the investigation of alleged educator misconduct. The agency said last week that it would release the second part of its request, for “categorical aid programs and other critical supports” for Wisconsin’s public schools, in November. The election is scheduled for Nov. 3. 

“The formula used for funding our schools, for years, has failed our children, schools and entire communities,” Underly said during her address. “The reasons are varied and complex, but you don’t need to be familiar with every detail of the funding formula to know that it’s simply not working. The evidence is all around us.” 

More than 75 school referendum requests carrying a total cost of $1.5 billion will go before voters in November. It’s just the latest round in a now-familiar ritual as school districts across the state  seek approval to raise property taxes to make up for a shrinking pool of  state aid. School districts that can’t pass a referendum have had to cut costs including by eliminating programs, staff and in some cases closing or consolidating schools. Districts on a streak of failed referendum requests have faced dissolution. 

Underly noted that the classrooms of the Hustisford School District “sat empty” on the first day of school this year. The district started the dissolution process after its referendum failed in April.

“Every kid felt the impact,” Underly said. “Kindergarteners, who should have been walking through the doors of the school their family chose when they made this beautiful community home, instead traveled to a neighboring town. Meanwhile, seniors who spent the past 12 years as Hustisford Falcons started their last year of school in an unfamiliar building,” Underly continued. “This is what happens when we turn our back on our schools. And when schools close, the impact doesn’t stop with students. It ripples through entire communities.”

Underly said the state funding formula “places value on the wrong things,” including enrollment, district spending and property value, instead of on student needs. 

“It fails to ask the most essential question: How much does it actually cost to educate the students who live in a district so that they have an equal opportunity to succeed? A student’s opportunity for success should not depend on their zip code,” she said. 

School funding will depend on who’s in office. Republican candidate Tom Tiffany and Democratic candidate David Crowley are running to be governor and control of the state Senate and Assembly are up for grabs. 

Some lawmakers have argued that rather than increase funding for schools the state needs to explore more school consolidation given declining enrollment. Asked about when school closure is the appropriate answer to declining enrollment, Underly told reporters she thinks “it deserves some study and conversation to figure out what’s best for kids.”

Underly pointed to the 2019 bipartisan Blue Ribbon Commission while speaking to reporters. The commission, which was created by Assembly Speaker Robin Vos and then-Senate Majority Leader Scott Fitzgerald in 2017, developed a report offering ideas to address school funding issues, as a guiding document for what the state should be doing. She said that the reports showed that there are kids who need additional support including those in poverty and who have special needs. She said money also needs to be invested in career and technical education, mental health supports and speech and language pathology.

“All these things have been in my past budget requests, and that’s what we will be able to expect in the next one, too,” Underly said. The agency’s 2024 state budget request totaled over  $4 billion. 

Urgent, but possibly not very fast

While Underly delivered her message with urgency, the timeline for changes could look vastly different depending on who wins in November.

Senate Minority Leader Dianne Hesselbein (D-Middleton), who could become the Senate Majority leader depending on the results of the November elections, has said Democrats will increase school funding in the next state budget, but changing the state’s school funding formula could be a “multi-year” process. 

“We’re also looking at a long-term goal of seeing what other states are doing and how they are funding their public schools, but that’s going to take probably a multi-year task to try to figure that all out and talking to our friends in Minnesota, Michigan, Illinois,” Hesselbein said. 

Crowley has been supportive of increasing school funding, including moving the state toward reimbursing districts for 90% of the cost of special education, instead of the current rate of 38% , but he has also suggested throughout his campaign for governor that there may need to be another Blue Ribbon Commission to study tax issues including school and local government funding. The last Blue Ribbon Commission on school funding took two years to complete. 

Tiffany has said he wants some increases to school funding, but also promises to freeze property taxes if elected. He hasn’t provided clarity on how much he would invest or how he would balance the two issues. Tiffany has focused on issues of accountability and ensuring “high standards” as opposed to school funding when discussing education issues.

Underly has had a strained relationship with Republicans on the Joint Finance Committee, who have declined to invite her to testify in front of the committee, and it’s unclear whether a working relationship between her and Tiffany would be an improvement. Tiffany recently described the state superintendent’s position as a constitutional office as a “problem” at a Moms For Liberty Town Hall in Richfield. He said he would use the state budget, which determines the state’s spending for a two-year period, to try to steer the superintendent  to make the decisions he wants her to make.

Underly said responding to the comments that independence is positive.  

“When you think about my office, my office is nonpartisan. It’s independent. It is not at the whim of any governor and I think that actually strengthens public education,” Underly said. “I think his comments stand on their own.”

In her speech, Underly called for people to look at the candidates’ records on school issues, not their talking points, when making their decisions at the ballot box this November. 

“We have people running for office who have spent a decade or more in government, in positions to make school funding decisions — or who have left state government for another level and now want to return — whose records include repeatedly voting against investments in Wisconsin’s children,” Underly said, apparently referring to Tiffany, who as a state lawmaker served on the budget committee before he was elected to Congress. “Past actions are the best evidence we have of what someone will do when given power again. Wisconsin does not need more people who tell us they support children while their votes tell a different story. We need people in positions of decision-making power who are pro-public school, pro-child and pro-Wisconsin.” 

Kate Murrain, a realtor and mother of two Middleton-Cross Plains School District students, said she has a couple of questions before she makes her mind up whether to vote for the district’s $118.5 million referendum request. 

Murrain told the Wisconsin Examiner that she wants to see a side-by-side comparison of budgets, one of if the referendum passes and one if it fails. Her questions reflect the competing concerns that surfaced in a recent public discussion of rising property taxes and the school district’s troubles meeting rising costs. 

“At this point, without any information and being as educated as I need to be I would vote no,” Murrain said, adding she noticed that the meeting was attended by a relatively small group of neighbors who appeared to be pro-referendum. “I was surprised. I expected to walk into 100 people having questions to get better educated. I’m just shocked that this is the turnout.”

Murrain was one of about 20 who gathered in the performing arts center of Middleton High School on Sept. 17 to listen to district leaders explain the request and take questions. The district is holding at least four of these sessions open to the public leading up to the Nov. 3 election.

Middleton’s request is part of a wave of more than 70 school district referendum requests this fall seeking $1.6 billion in support from property taxpayers. Under Wisconsin’s school funding system, there is a cap on how much school districts can bring in through a combination of state aid and property taxes. To exceed the caps, Wisconsin school districts have to go to voters for approval. 

Among the requests 17 are for one-time building costs, eight are recurring, to provide permanent support for operating costs, and the remaining are non-recurring, slated to help with operating costs but for a set number of years.

By the end of the year, the total number of referendum requests appearing on spring and fall ballots will total more than 150. Eight of the school districts asking voters for more money in November are trying for the second time this year after a spring request failed. 

In April, 75 referendum requests went before voters. According to the Wisconsin Policy Forum, 46 of those passed — a 61.3% approval rate. The Policy Forum found that a similar result in November would represent “a substantial decrease from the 70.1% approval rate in 2024” and the “lowest approval rate of any even-numbered year since 2010, when voters approved 52.7% of referenda.”

The Middleton-Cross Plains School District request is the second largest referendum ask  on ballots in November behind Green Bay Area School District, which is seeking $158 million over four years and is currently a party in a lawsuit suing the state over the school funding formula.

Middleton is considered “property rich,” meaning it gets less state aid than other school districts and relies more heavily on property taxes for its budget. According to school leaders, about 80% of the district budget comes from property taxes. The other 20% comes from state aid. 

The request would be split to provide $24.9 million in year one of the referendum. That amount would continue the funding the district is currently receiving through a 2022 nonrecurring referendum. The next three years the funding would rise by about 3% each year to account for inflation, so $27.9 million in year two, $31.1 million in year three and $34.6 million in year four.

Bob Hesselbein, the school board president, told the Examiner that the district considered about six different referendum scenarios.

“Like a lot of districts within Wisconsin since 2010, we have been forced to find operational funding with our own community because the state each year is giving us in real dollars less in buying power,” Hesselbein said. “We recognize with the economics going on now in the country, we didn’t want to ask for more because everyone’s hurting.”

The district conducted surveys while working to develop the question. In one survey of about 1,800 community members, 66% said that they would probably or definitely vote for a 2026 referendum. Those who opposed the referendum cited property-tax fatigue, spending reductions and a preference for state level solutions. 

Hesselbein said the district hasn’t had a “No Vote” committee form. In other districts, “No Vote” and “Yes Vote” committees will form and can come into contention with one another as residents concerned about rising property taxes are pitted against those who want their schools to be able to meet costs.

One attendee at the recent meeting in Middleton asked for clarification on the actual cost to individual taxpayers of the referendum and said he was worried about how the additional taxes would affect seniors on a fixed income.

An explanatory page provided by the district shows that property taxpayers could expect to pay no additional money in the first year, $21 in the second, $40 in the third and $59 in the fourth. However, the numbers are pegged to $100,000 of property. The district said it provided the information in the form it did so individuals could do the math easily depending on the cost of the house. 

“Who has a $100,000 house in Middleton?” the attendee said. “I’d rather see the average house in there, so people can get a feel as to what you’re looking at.” 

The average cost of a house is $500,000 in Middleton, meaning in the second year of the budget an average homeowner could expect to pay an additional $105 in property taxes in the second year of the referendum.

“You’re going to be squeezing me,” the attendee said. “You want to keep everything status quo. There’s room to cut.” 

If the referendum fails the district will have to cut its budget by about 20%. 

Whether the referendum passes or not, the district plans to cut $5 million from its budget, though conversations are just beginning on where those cuts will come from. 

“We’re going to probably find ourselves cutting some of the enhancements to education, not the meat of what we do here,” Hesselbein told the Examiner, adding that it likely wouldn’t mean layoffs, but retirements may mean conversations about dividing work among current employees instead of a new hire. 

The same retiree who spoke up about the cost of the referendum asked why the district wasn’t turning to state lawmakers. 

“I called Sen. [Dianne] Hesselbein’s office last year, and asked, what have you done to get more money?” he said. “I got the typical political run around.”

Gov. Tony Evers and Republican lawmakers tried to pass a deal earlier this year that would have tapped the state surplus to give schools some additional funding and send rebate checks to property taxpayers. The bill failed in the Senate, where most Democrats opposed it, saying it didn’t do enough to help schools or spend money responsibly, along with a couple of Republicans, who opposed the spending. 

Since then, progress on school funding changes have been stalled as most politicians have turned their attention to the upcoming elections. 

Bob Hesselbein, who is married to the Democratic leader of the Senate, said he had some inside information for the disgruntled taxpayer at the Middleton meeting.

“I happen to know Sen. Hesselbein pretty well,” he said, drawing a few chuckles in the room. 

“You can yell and swear all you want,” he added. “In Dane County, we have very pro-education representation in both our Assembly and our Senate. Unfortunately, they’re a minority within the state of Wisconsin, and until the rest of the cities, Wisconsin, come to that realization that their public schools are being damaged, we can’t expect anything different from our local politicians, because that’s the constitutional laws of our state.”

Sen. Hesselbein has said that Democrats will pass legislation to fund public schools in January. 

“We are going to be fully there for our public schools, especially when it comes to special education reimbursement,” Sen. Dianne Hesselbein said at a press conference last week. “One thing that school administrators are telling us all across the state — principals as well — that they want to see something they can count on and they want to rely on it.” 

Sen. Hesselbein said that her caucus has started having conversations over the summer about what needs to happen, including putting more money into special education and general aid. She said Democrats are also looking at other states to understand how the school funding formula could be changed.

“We’re also looking at a long-term goal of seeing what other states are doing and how they are funding their public schools, but that’s going to take probably a multi-year task to try to figure that all out and talking to our friends in Minnesota, Michigan, Illinois,” Hesselbein said. 

Meanwhile, school districts continue to rely on taxpayers to help them meet costs. 

Jim Coursey, treasurer of the Middleton school board, explained the stakes to Murrain. 

“If we were to lose that 20% of the budget, there will be no question that classrooms will be impacted, that’s too much,” Coursey said. “That’s going to lead to larger class sizes because it’s going to lead to a reduction in the number of staff that we’re going to be able to have supporting. It’s going to lead to elimination of programs.” 

Murrain, who said she values the education her children are receiving, remained unconvinced.

“I don’t know, it’s tough… I would need to see exactly where those funds are being allocated,” she said.