Wis. Lawmakers Adopt Controversial School-Finance Plan

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Wisconsin lawmakers have approved a controversial budget plan that would for the first time bring the state share of school spending above 50 percent.

The entire $28-billion plan faces a potential veto, however, by Gov. Tommy G. Thompson, who has been sharply critical of it.

Central to the measure, which cleared the legislature this month, is a provision providing a state income-tax credit to homeowners equal to their local school taxes on the first $30,000 of the value of their primary residences. The provision is intended to provide some targeted tax relief in a state that is noted for its high property-tax rates.

The credit, which would be taken only after a local tax jurisdiction had already set its levy rates for the year, would also have the effect of providing additional state funding to school districts, via the taxpayers. As a result, the state's portion of public-school expenditures would rise to more than half.

Governor Thompson was twice elected to office on a promise to break the 50 percent barrier. But the state share currently stands at about 45 percent of the cost of local schools, according to one legislative estimate.

Under the legislature's plan, the state would use lottery revenues, corporate-tax increases, a 10-cent increase in the cigarette tax, and other fee and tax increases to help pay for the new credit. The tax hikes would total an estimated $534 million.

"The legislature's number-one goals have been to provide property-tax relief; to use the lottery proceeds for direct property-tax relief, which was what it was intended for; and to provide a good education for everyone no matter where you live," said Michael Haas, a spokes8man for Speaker of the House Walter Kunicki.

The legislation as approved is considerably less ambitious than an earlier school-funding plan considered by lawmakers, which would have raised the sales tax by 20 percent, using that revenue and lottery receipts to pay for schools and to provide property-tax relief.

Thompson's Objections

Both plans, however, have been strongly opposed by Governor Thompson. His own budget plan called for no tax increases and sought to provide property-tax relief by limiting annual school-district spending increases to the rate of inflation.

"It's not a good budget by any stretch of the imagination," Thomas Fonfara, the Governor's education aide, said of the legislature's newest plan. "We're one of the few states that doesn't have a deficit but still advocates a tax increase, which we find objectionable."

"It's never been this partisan," Mr. Fonfara added, referring to the standoff over the budget between the Democrat-controlled legislature and the Republican Governor.

Mr. Thompson has also criticized the plan for failing to include many of his own education-reform proposals.

The legislature turned down, for example, Mr. Thompson's plan to carve the Milwaukee school district into at least four separate systems. (See Education Week, Feb. 20, 1991.)

Also failing to win approval were Thompson proposals to allow districts to contract with teachers in private practice, expand the state's testing program, and enable some districts to obtain waivers from state regulations that constrain innovation.

Lawmakers did, however, approve the Governor's plan to allow high-school students to take for-credit classes at vocational schools or local colleges for free. They also approved a measure calling for a uniform report card on schools in every district in the state.

Mr. Thompson, who is noted for his frequent use of his line-item-veto authority, has never before threatened to veto an entire budget. He is expected to announce this week whether he will sign the measure.

Vol. 10, Issue 40

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