Wisconsin Legislature: AB937,3,15

2009 Assembly BILL 937

April 6, 2010 - Introduced by Representatives Meyer, Mursau, Lothian, Tauchen,
Brooks, Murtha and Nygren, cosponsored by Senator Kapanke. Referred to
Committee on Education.

AB937,1,8 1An Act to repeal 121.07 (10) (a); to renumber 121.105 (2) (am); to renumber
2and amend 121.105 (1), 121.105 (2) (b), 121.85 (6) (a) and 121.86 (2) (a); to
3amend 121.06 (title), 121.06 (1), 121.06 (2), 121.07 (7) (b), 121.07 (10) (title),
4121.08 (2), 121.08 (3), 121.08 (4) (c), 121.08 (4) (d), 121.105 (3), 121.86 (3), 121.90
5(2) (bm) 1. and 121.90 (2) (bm) 2.; and to create 121.07 (1) (d), 121.07 (7m),
6121.07 (8m), 121.07 (10) (e) to (g), 121.08 (2g), 121.08 (2r), 121.105 (2g), 121.85
7(6) (a) 2. and 121.86 (2) (a) 2m. of the statutes; relating to: distributing
8one-half of general school aid using an income equalization formula.

Analysis by the Legislative Reference Bureau

Under the current general school aid formula, the state establishes a
guaranteed property tax base, known as the guaranteed valuation. The rate at
which a school district's costs are aided through the formula is determined by
comparing the school district's per pupil property tax base (or equalized valuation)
to the guaranteed valuation. State equalization aids are provided to make up the
difference between the school district's actual property tax base and the state
guaranteed level. Thus, school districts with low property valuations per pupil
receive a larger share of their costs through the formula than school districts with
high property valuations per pupil. Currently, the income of school district residents
is not a factor in the calculation of general state aid to the district.

This bill provides for the distribution of 50 percent of the money appropriated
for general school aid using an income equalization formula that is based on the
structure of the current property tax equalization base formula. (The other 50
percent continues to be distributed using the current property tax base equalization
formula.) The guaranteed valuation is based on the net taxable income reported by
taxpayers in the school district rather than the district's equalized property
valuation.

The bill first applies to the payment of state aid in the 2011-12 school year.

For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:

AB937, s. 1 1Section 1. 121.06 (title) of the statutes is amended to read:

AB937,2,3 2121.06 (title) Determination and certification of equalized valuation
3and net taxable income.

AB937, s. 2 4Section 2. 121.06 (1) of the statutes is amended to read:

AB937,2,105 121.06 (1) Annually on or before October 1, the full value of the taxable
6property in each part of each city, village and town in each school district, and the
7net taxable income in each school district in the calendar year ending in the previous
8school year, shall be determined by the department of revenue according to its best
9judgment from all sources of information available to it and shall be certified by the
10department of revenue to the state superintendent.

AB937, s. 3 11Section 3. 121.06 (2) of the statutes is amended to read:

AB937,2,1412 121.06 (2) The state superintendent shall certify to each school district clerk
13the appropriate full values amounts certified to the state superintendent under sub.
14(1).

AB937, s. 4 15Section 4. 121.07 (1) (d) of the statutes is created to read:

AB937,2,1716 121.07 (1) (d) 1. The net taxable income of the school district in the calendar
17year ending in the previous school year shall be used in computing general aid.

AB937,3,3

12. For a school district operating only high school grades, the sum of the net
2taxable incomes of its underlying elementary school districts shall be used in
3computing general aid.

AB937, s. 5 4Section 5. 121.07 (7) (b) of the statutes is amended to read:

AB937,3,85 121.07 (7) (b) The "secondary guaranteed valuation per member" is an amount,
6rounded to the next lower dollar, that, after subtraction of 50 percent of the payments
7under ss. 121.09 and 121.85 (6) (b) 2. and 3. and (c), fully distributes an amount equal
8to 50 percent of the amount remaining in the appropriation under s. 20.255 (2) (ac).

AB937, s. 6 9Section 6. 121.07 (7m) of the statutes is created to read:

AB937,3,1110 121.07 (7m) Guaranteed net taxable income per member. (a) The "primary
11net taxable income per member" is $300,000.

AB937,3,1512 (b) The "secondary net taxable income per member" is an amount, rounded to
13the next lower dollar, that, after subtraction of 50 percent of the payments under ss.
14121.09 and 121.85 (6) (b) 2. and 3. and (c), fully distributes 50 percent of the amount
15remaining in the appropriation under s. 20.255 (2) (ac).

AB937,3,1816 (bm) The "tertiary net taxable income per member" is the amount, rounded to
17the next lower dollar, determined by dividing the net taxable income of the state by
18the state total membership.

AB937,3,2019 (c) For districts operating only high school grades, the amounts in pars. (a) to
20(bm) shall be multiplied by 3 and rounded to the next lower dollar.

AB937,3,2221 (d) For districts operating only elementary grades, the amounts in pars. (a) to
22(bm) shall be multiplied by 1.5 and rounded to the next lower dollar.

AB937,4,223 (e) 1. For a school district created by a consolidation under s. 117.08 or 117.09,
24in the school year in which the consolidation takes effect and in each of the

1subsequent 4 school years, the amounts under pars. (a) to (bm) shall be multiplied
2by 1.15 and rounded to the next lower dollar.

AB937,4,73 2. For a school district from which territory was detached to create a school
4district under s. 117.105, in each of the 3 school years beginning on the July 1
5following the effective date of the reorganization under s. 117.105, the amounts
6under pars. (a) to (bm) shall be multiplied by 1.05 and rounded to the next lower
7dollar.

AB937, s. 7 8Section 7. 121.07 (8m) of the statutes is created to read:

AB937,4,119 121.07 (8m) Guaranteed net taxable income. A school district's primary,
10secondary, and tertiary net taxable incomes are determined by multiplying the
11amounts in sub. (7m) by the district's membership.

AB937, s. 8 12Section 8. 121.07 (10) (title) of the statutes is amended to read:

AB937,4,1313 121.07 (10) (title) Required levy rate and income rates.

AB937, s. 9 14Section 9. 121.07 (10) (a) of the statutes is repealed.

AB937, s. 10 15Section 10. 121.07 (10) (e) to (g) of the statutes are created to read:

AB937,4,1716 121.07 (10) (e) The "primary required income rate" is the primary shared cost
17divided by the primary net taxable income.

AB937,4,1918 (f) The "secondary required income rate" is the secondary shared cost divided
19by the secondary net taxable income.

AB937,4,2120 (g) The "tertiary required income rate" is the tertiary shared cost divided by the
21tertiary net taxable income.

AB937, s. 11 22Section 11. 121.08 (2) of the statutes is amended to read:

AB937,5,423 121.08 (2) The aid computed under sub. (1) shall be reduced by the sum of the
24amount by which the school district equalized valuation exceeds the secondary
25guaranteed valuation, multiplied by the secondary required levy rate, and the

1amount by which the school district equalized valuation exceeds the tertiary
2guaranteed valuation, multiplied by the tertiary required levy rate. In no case may
3the aid distributed under sub. (1) and this section subsection be less than the amount
4under sub. (1) (a).

AB937, s. 12 5Section 12. 121.08 (2g) of the statutes is created to read:

AB937,5,76 121.08 (2g) The state shall pay to the school district the sum of the following
7amounts:

AB937,5,98 (a) The amount by which the primary net taxable income exceeds the school
9district net taxable income, multiplied by the primary required income rate.

AB937,5,1110 (b) The amount by which the secondary net taxable income exceeds the school
11district net taxable income, multiplied by the secondary required income rate.

AB937,5,1312 (c) The amount by which the tertiary net taxable income exceeds the school
13district net taxable income, multiplied by the tertiary required income rate.

AB937, s. 13 14Section 13. 121.08 (2r) of the statutes is created to read:

AB937,5,2115 121.08 (2r) The aid computed under sub. (2g) shall be reduced by the sum of
16the amount by which the school district net taxable income exceeds the secondary net
17taxable income, multiplied by the secondary required income rate, and the amount
18by which the school district net taxable income exceeds the tertiary net taxable
19income, multiplied by the tertiary required income rate. In no case may the aid
20distributed under sub. (2g) and this subsection be less than the amount under sub.
21(2g) (a).

AB937, s. 14 22Section 14. 121.08 (3) of the statutes is amended to read:

AB937,6,223 121.08 (3) The aid computed under sub. (1) and the aid computed under sub.
24(2g) shall each be reduced by 50 percent of the amount by which the aid that the
25school district is receiving under sub. (1) as a result of the number of pupils reported

1as enrolled in the school district under s. 121.05 (1) (a) 7. exceeds the amount paid
2by the school district for tuition for those pupils.

AB937, s. 15 3Section 15. 121.08 (4) (c) of the statutes is amended to read:

AB937,6,104 121.08 (4) (c) The amount of state aid that a school district is eligible to be paid
5from the appropriation under s. 20.255 (2) (ac) shall also be reduced by an amount
6equal to the amount paid to the Second Chance Partnership under s. 115.28 (54) for
7pupils enrolled in the school district. The department shall ensure that the amount
8of the aid reduction lapses to the general fund and that it does not affect the amount
9determined to be received by a school district as state aid under this section for any
10other purpose.

AB937, s. 16 11Section 16. 121.08 (4) (d) of the statutes is amended to read:

AB937,6,1612 121.08 (4) (d) The state superintendent shall ensure that the total amount of
13aid reduction reductions under pars. (a) and (b) this subsection lapses to the general
14fund and that 50 percent of the aid reductions are made to the computations under
15subs. (1) and (2) and 50 percent of the aid reductions are made to the computations
16under subs. (2g) and (2r).

AB937, s. 17 17Section 17. 121.105 (1) of the statutes is renumbered 121.105 (1) (a) and
18amended to read:

AB937,6,2119 121.105 (1) (a) In this section subsection, "state aid" means the sum of the
20payments provided to a school district under this section subsection and ss. 121.08
21(1) and (2), 121.85 (6) (a) 1., and 121.86 (2) (a) 1.

AB937, s. 18 22Section 18. 121.105 (2) (am) of the statutes is renumbered 121.105 (1) (b).

AB937, s. 19 23Section 19. 121.105 (2) (b) of the statutes is renumbered 121.105 (2r) and
24amended to read:

AB937,7,5

1121.105 (2r) A school district is eligible to receive additional aid under par. (am)
2subs. (1) and (2g) only if the aggregate additional aid does not result in a state aid
3payment greater than the school district's shared cost. In this subsection, "state aid"
4means the sum of payments provided to a school district under this section and ss.
5121.08, 121.85, and 121.86.

AB937, s. 20 6Section 20. 121.105 (2g) of the statutes is created to read:

AB937,7,97 121.105 (2g) (a) In this subsection, "state aid" means the sum of the payments
8provided to a school district under this subsection and ss. 121.08 (2g) and (2r), 121.85
9(6) (a) 2., and 121.86 (2) (a) 2m.

AB937,7,1510 (b) 1. Except as provided in subd. 2., if a school district would receive less in
11state aid in the current school year before any adjustment is made under s. 121.15
12(4) (b) than an amount equal to 85% of the amount of state aid that it received in the
13previous school year, as adjusted under s. 121.15 (4) (b) in the current school year,
14its state aid for the current school year shall be increased to an amount equal to 85%
15of the state aid received in the previous school year.

AB937,7,2116 2. If a school district from which territory was detached to create a new school
17district under s. 117.105 would receive in state aid in the school year beginning on
18the first July 1 following the effective date of the reorganization less than 85 percent
19of the amount determined as follows, its state aid in the school year beginning on the
20first July 1 following the effective date of the reorganization shall be increased to an
21amount equal to 85 percent of the amount determined as follows:

AB937,7,2322 a. Divide the school district's membership in the preceding school year by the
23school district's membership in the 2nd preceding school year.

AB937,8,3

1b. Multiply the amount of state aid received by the school district in the
2preceding school year, as adjusted under s. 121.15 (4) (b) in the current school year,
3by the quotient under subd. 2. a.

AB937, s. 21 4Section 21. 121.105 (3) of the statutes is amended to read:

AB937,8,115 121.105 (3) In the school year in which a school district consolidation takes
6effect under s. 117.08 or 117.09 and in each of the subsequent 4 school years, the
7consolidated school district's state aid shall be an amount that is not less than the
8aggregate state aid to which the consolidating school districts were eligible in the
9school year prior to the school year in which the consolidation takes effect. The
10additional state aid shall be paid from the appropriation under s. 20.255 (2) (ac). In
11this subsection, "state aid" has the meaning given in sub. (2r).

AB937, s. 22 12Section 22. 121.85 (6) (a) of the statutes is renumbered 121.85 (6) (a) 1., and
13121.85 (6) (a) 1. a. and c., as renumbered, are amended to read:

AB937,8,1614 121.85 (6) (a) 1. a. Divide the state aid received in the current school year under
15s. 121.08 (1) and (2) by the membership used to compute state aid to the school
16district for the current school year.

AB937,8,1717 c. Multiply the quotient under subd. 1. a. by the product under subd. 2 1. b.

AB937, s. 23 18Section 23. 121.85 (6) (a) 2. of the statutes is created to read:

AB937,8,2119 121.85 (6) (a) 2. Except as provided under pars. (am) and (ar), the school district
20of attendance of pupils transferring from one attendance area to another under subs.
21(3) (b) and (4) shall be entitled to an amount determined as follows:

AB937,8,2422 a. Divide the state aid received in the current school year under s. 121.08 (2g)
23and (2r) by the membership used to compute state aid to the school district for the
24current school year.

AB937,9,2

1b. Multiply the number of transfer pupils, as counted for membership purposes
2under s. 121.004 (7), by 0.25.

AB937,9,33 c. Multiply the quotient under subd. 2. a. by the product under subd. 2. b.

AB937, s. 24 4Section 24. 121.86 (2) (a) of the statutes is renumbered 121.86 (2) (a) 1., and
5121.86 (2) (a) 1. a. and c., as renumbered, are amended to read:

AB937,9,86 121.86 (2) (a) 1. a. Divide the state aid received in the current school year under
7s. 121.08 (1) and (2) by the membership used to compute state aid to the school
8district for the current school year.

AB937,9,99 c. Multiply the quotient under subd. 1. a. by the product under subd. 2 1. b.

AB937, s. 25 10Section 25. 121.86 (2) (a) 2m. of the statutes is created to read:

AB937,9,1411 121.86 (2) (a) 2m. Except as provided under sub. (3), if a school board
12establishes a merged attendance area after January 1, 1984, for the purpose of
13reducing racial imbalance in the school district, the school district shall be entitled
14to an amount determined as follows:

AB937,9,1715 a. Divide the state aid received in the current school year under s. 121.08 (2g)
16and (2r) by the membership used to compute state aid to the school district for the
17current school year.

AB937,9,1818 b. Multiply the number of pupils enumerated under pars. (b) and (c) by 0.25.

AB937,9,1919 c. Multiply the quotient under subd. 2m. a. by the product under subd. 2m. b.

AB937, s. 26 20Section 26. 121.86 (3) of the statutes is amended to read: