A yard sign urging voters to vote 'Yes' on a referendum request for Ashwaubenon School District in 2024 when a record number of schools went to referendum. Photo by Baylor Spears/Wisconsin Examiner.

As Wisconsin school districts seek permission this week from voters to spend more than $1.6 billion for operational and building costs, state lawmakers are looking for ways to address the issue of schools’ growing reliance on referendum requests.

Voters across the state are deciding this spring on a total of 94 referendum requests including some in February and many in the upcoming April 1 elections. According to the Wisconsin Policy Forum, it’s the most ever between January and April in a non-presidential or midterm election year and it’s the continuation of an ongoing trend.

Republicans have introduced three proposals for new limitations on the referendum process in reaction to Milwaukee Public Schools’ successful request last year, with lawmakers saying the proposals would increase fairness and transparency for voters and taxpayers. However, one Democratic lawmaker and other stakeholders said the proposals would limit local control and don’t address the structural financial issues that drive school districts to go to referendum.

Eliminating ‘recurring’ referendum requests

A bill coauthored by Rep. Cindi Duchow (R-Town of Delafield) and Sen. Chris Kapenga (R-Delafield)  would eliminate referendum questions that allow permanent operational funding increases and would limit other referendum requests to cover no more than a four-year period.

Duchow said in an interview with the Wisconsin Examiner that she doesn’t think there is a problem with school districts going to referendum and called them the “perfect tool” to allow local residents to make funding decisions. But she doesn’t think funding increases sought through a referendum should be permanent — or, in legislative terminology, “recurring” year after year. 

The referendum option was created for schools in 1993 as a part of legislation that put limits on schools’ ability to raise revenue by increasing property taxes. 

Anne Chapman, research director for the Wisconsin Association of School Business Officials Association (WASBO), said in an interview that the idea behind the legislation was that property taxpayers would be protected and the state would take care of school districts financially in return. From 1993 to 2010, revenue caps — the limit on how much districts could raise without voters’ permission — were tied to inflation. The inflationary increases were eliminated in 2009 and state funding has not filled the gap to give schools an inflationary increase. 

According to WASBO, general school district revenues have lagged the rate of inflation for a decade and a half. If funding had kept up with inflation, districts would be getting $3,380 more per pupil in 2025.

Wisconsin schools also only receive funding for about a third of their special education costs and many are drawing from their general funds to keep up with providing expensive federally and state mandated services to students with disabilities. Districts are also dealing with declining enrollment, which results in lower funding for a district as there are fewer students even if fixed costs such as maintaining facilities may not fall.

School officials and advocates have pointed out that many districts are relying heavily on referendum requests to meet costs (even to keep schools open), saying the trend is untenable. Mauston School District is one example as school leaders were considering dissolving the district after two failed referendum requests until voters finally approved a request in February.

Chapman noted that when a referendum fails it can result in a school deferring maintenance, increasing class sizes and cutting staff, AP programs, language, support staff for special education, nurses, librarians, athletics and “all the things that kids need to kind of stay engaged in school.” 

Dale Knapp, director of Wisconsin-based research organization Forward Analytics, said in 2023 that he didn’t “think the lawmakers who created this law envisioned referenda being relied on this much.”

“Maybe the answer after 30 years of the limits is an in-depth review of the law to see how it can be improved to continue protecting taxpayers and ensure adequate funding of our schools,” Knapp said.

Duchow, however, said that the state is providing “plenty of money” to schools.

“If they want a new gym, that’s on them. I’m not here to build you a new gym. The people who live in that community should make that decision,” Duchow said. She also said there are some schools that probably need to consolidate and others that need to close.

While school districts do go to voters to fund building costs, many are also going to referendum for “operational” (and often recurring) costs and as a way to keep up with staff pay, afford educational offerings and pay utility bills.

Duchow said recurring referendum questions are unfair. She said lawmakers in the caucus have been discussing changing the policy for a while. A similar proposal was introduced in 2017.

“We are looking at declining enrollment around this state, and how do we know what we really need 10 years from now?” Duchow said. “The Milwaukee referendum never goes away, so 10 years from now, we have less students in Milwaukee and we need the same amount of money?  We have more technology coming in, which means we probably need less teachers.” 

Duchow said Milwaukee’s $252 million operating referendum, which was the second largest school operating request in state history, was the “catalyst” for her bill.

Republican lawmakers and other state leaders have been highly critical of the request, which the district said was needed to fund staff pay and educational programming and voters narrowly approved. The criticism grew louder after the district’s financial crisis that resulted in the resignation of the superintendent and audits launched by Gov. Tony Evers.

“Enough is enough. MPS is a disaster. We have the worst reading scores in the nation, and all they do is scream they need more money,” Duchow said. “Money is obviously not the answer.”

Even with declining enrollment, the Milwaukee Public School District is the largest district in the state with 65,000 students enrolled, according to the 2024-25 enrollment data from DPI. This is over 2.5 times as many students as the next largest district in Wisconsin, Madison Metropolitan School District.

MPS students are also more likely to face significant challenges. More than 20% of students in the district have a disability, more than 80% are economically disadvantaged and 17.5% are English language learners. Statewide about 40% of students are economically disadvantaged, 15.7% are students with disabilities and 6.92% are English language learners.

Chapman said students with higher needs often incur higher costs for districts. 

Duchow said that putting a four-year limit on referendum requests for recurring funds gives communities the ability to react to changing circumstances and that school districts should justify to voters why they need the funds. She said she would be open to discussing a different limit when it comes to nonrecurring referendum requests.

“It’s also not fair that everybody could vote for that referendum and then decide, hey, this is really too expensive. I can’t afford these property taxes and then they move out, and I’m still there paying the referendum,” Duchow said. 

Duchow said she hadn’t yet spoken with any school district leaders when she was interviewed by the Examiner in early March, but planned to reach out before a public hearing on the bill.

“I’m sure I can already tell you how the schools are going to feel. The schools are going to feel they want their recurring referendum, just like we want your boss to give you a 20% raise every year without you justifying why you should get it,” Duchow said. “That’s what the schools want, too. I don’t blame them. I would, too, but we can’t do that to our taxpayers.”

According to the Wisconsin Eye on Lobbying website, the Wisconsin Education Association Council has registered against the bill, while the Wisconsin REALTORS Association has registered in favor.

Lawmakers have added new restrictions to school referendum requests before. The 2017-19 state budget limited scheduling of a referendum requests to only two per year and only allowed them to be held on regularly scheduled election days.

“It used to be that referendums could be called by a school district at any time, but the Legislature said… we don’t want you to have the option to run so many referendums,” Chapman said. 

Chapman noted in an interview that recurring referendum requests pass at lower rates than other types because it is harder to convince taxpayers. She said voters “know how to handle this” and lawmakers shouldn’t further reach in to restrict district’s options.

“Some districts and some communities want a recurring referendum,” Chapman said. “School districts have the option of asking for recurring and sometimes they do and voters sometimes approve them because they’re asking to fill structural budget holes that are never going to go away. They’re asking for basic operating dollars that they’re going to need in four years.” 

A recent Marquette Law School poll found that Wisconsinites are becoming increasingly concerned with holding down property taxes since 2018 and less favorably inclined toward increasing funding for K-12 public schools. 

Chapman noted that districts also often make nonrecurring referendum requests for recurring costs because they are an easier ask, though this places districts in another difficult position.

“As soon as you go to nonrecurring referendum in this environment with grossly inadequate state funding and state policies to support schools financially, you are now going to be in your own personal fiscal cliff,” Chapman said. “You’re going to have to go again, and probably for more, because your costs have gone up and funding does not keep up with inflation.” 

Bills meant to provide ‘fairness,’ ‘transparency’

Lawmakers, concerned about the MPS referendum, requested a Legislative Fiscal Bureau memo last year that found some school districts in Wisconsin could see a decrease in state aid after the MPS referendum due to the way that equalization aid is calculated.

Equalization aid acts as a form of property tax relief, according to the Wisconsin School Business Officials Association. The amount of aid a district receives from the finite pot of money distributed by the state is determined by a formula that depends on a district’s property wealth, spending and enrollment.

Spending triggered by referendum requests is one factor in determining districts’ equalization aid, and Milwaukee — like other districts with low property wealth per pupil compared to the rest of the state — will receive more state aid per pupil than other districts with higher property wealth per pupil as a result of its increased spending from the referendum.

Chapman noted, however, that all 148 referendum requests for operating expenses in 2024 affect the share of equalization aid districts receive. She also emphasized that it’s not the only factor affecting the amount of aid districts get.

“Some districts have increasing enrollment, which means they’re going to pull more money away from Milwaukee.” Chapman said. “There’s all of these factors that affect every single district, and they intertwine with each other.”

Republicans viewed Milwaukee’s referendum as taking too much from other districts. 

“Is it fair to the students, parents and taxpayers in Waukesha, Madison, Wautoma and others suffer without having the right to cast a vote?” the bill authors Rep. Scott Allen (R-Waukesha) and Sen. Julian Bradley (R-New Berlin) asked in a memo. “Local school referendums should not have a significant negative impact on other districts. Simple fairness demands this type of thinking.”

The lawmakers’ bill would exclude any district referendum request worth more than $50 million from being considered when determining equalization aid. The effect of the bill would be that districts that pass a large referendum would have their aid eligibility reduced, leaving local taxpayers to pay more of the cost. The bill would only apply to districts below a certain property wealth value.

Chapman said the bill would penalize districts for being larger and having lower property wealth and is an example of lawmakers trying to micromanage local entities.

A final bill introduced by Allen and Sen. Rachael Cabral-Guevara (R-Appleton) would require that tax impact information be added to ballots. Currently, referendum ballot questions are required to include the dollar amount of the increase in the levy limit.

Under the bill, referendum questions would also need to include the estimated interest rate and amount of the interest accruing on the bonds, any fees that will be incurred if the bonds are defeased and a “good faith estimate of the dollar amount difference in property taxes on a median-valued, single-family residence located in the local governmental unit that would result from passage of the referendum.” 

Proposal criticisms

Freshman Rep. Christian Phelps (D-Eau Claire) said he wasn’t inclined to support a ban on recurring referendum requests given the inconsistency in state funding. 

“We go through this sort of toxic [state] budget cycle every two years and districts have to levy, and they don’t even know what to plan for, so recurring referendums are obviously a response to that,” Phelps said.

Phelps said the question of fairness is relevant when talking about the referendum process, but the framing of the Republican proposals is misguided, given the state’s over $4 billion budget surplus.

“It is not fair to taxpayers that, depending on what school district you live in, you might have an astronomical property tax bill just to keep that district running. That’s not fair,” Phelps said. He said the state of Wisconsin is “underfunding public schools and not using the taxes people already paid.”

Derek Gottlieb, an associate professor at the University of Northern Colorado and senior research director for School Perceptions, an education research firm, said Republicans appear to be “operating on behalf of the taxpayers across the state who have voted no on school referendums and yet lost and so had their taxes raised anyway.”

“Suddenly, because so many [referendum requests] are passing, homeowners, taxpayers who don’t want to have their taxes raised are saying that this is unfair or we shouldn’t have to have our taxes raised just because everybody in our community wants to raise our taxes and Republicans are coming to the defense of those folks,” Gottlieb said. 

According to the Wisconsin Policy Forum, while the number of requests continues to rise, approval rates have started to decline with the 66.2% approval rate in 2024 being the lowest in a midterm or presidential election year since 2012.

Gottlieb said some of the concerns raised by lawmakers are valid. For example, he said the current terms used to describe referendum questions are “obscure” and unclear.

“Why not just say a permanent referendum and a temporary referendum?” he asked. “You could do a lot to increase the transparency of what people are voting on if you made that little language change.” 

Gottlieb also said that he does have “sympathy” for those who don’t think there should be permanent funding requests, but acknowledged that this would have consequences for districts because it removes predictability in planning.

However, he said he doesn’t agree that the potential for people to move out of a community or into a community in the future should be the deciding factor in funding decisions. 

“That’s a basic feature of any community anywhere,” he said. 

The argument that “it is not a legitimate exercise of public governmental power to make a decision for a community, given the fact that the community will change in the future…is ridiculous,” Gottlieb said. “If that were the case, it would make all public decisions fundamentally illegitimate.”

The increasing number of referendum requests, Gottlieb said, is a sign that revenue limits are set too low, at an amount that is unacceptable to community members. He noted that when operational referendum requests fail, the schools typically cut theater arts, advanced placement coursework, second language instruction, foreign language instruction and other programs that aren’t required by the state.

Chapman called the proposals a “BandAid” on the issues districts are facing that “isn’t even really fixing the problem.” 

“[If] legislators really wanted to protect taxpayers and make sure schools have what they need, they would do something like keep revenue limits inflationary [and] significantly improve the funding for special education, which would help every single kid,” Chapman said.

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