2003 - 2004 LEGISLATURE
April 18, 2003 - Introduced by Representatives M. Lehman, W. Wood, Ainsworth,
Ziegelbauer and Gronemus. Referred to Committee on Education.
1An Act to repeal
111.70 (1) (dm), 111.70 (1) (fm), 111.70 (1) (nc), 111.70 (4) (cm) 2
5s., 111.70 (4) (cm) 7., 111.70 (4) (cm) 7g., 111.70 (4) (cm) 8m. b., 111.70 (4) (cm) 3
8p., 111.70 (4) (cn), 121.15 (1) (a) to (e), 121.15 (1g), 121.15 (3m) and 121.23 (2); 4to renumber
121.23 (1); to renumber and amend
121.15 (1) (intro.); to
5consolidate, renumber and amend
111.70 (4) (cm) 8m. a. and c. and 121.15 6
(1m) (a) (intro.) and 3.; to amend
20.255 (2) (ac), 67.03 (1) (a) and (b), 67.05 (6a) 7
(a) 2. (intro.), 71.08 (1) (intro.), 71.10 (4) (i), 77.52 (1), 77.52 (2) (intro.), 77.53 8
(1), 111.70 (1) (b), 111.70 (4) (cm) 5., 111.70 (4) (cm) 6. a., 111.70 (4) (cm) 6. am., 9
111.70 (4) (cm) 7r. (intro.), 111.70 (4) (cm) 8s., 111.70 (4) (d) 2. a., 115.93, 118.255 10
(4), 118.40 (2r) (e) 1., 118.51 (16) (b), 118.51 (16) (d), 119.23 (4) (b) 2., 119.82 (5), 11
121.08 (1) (intro.), 121.08 (4) (a) (intro.), 2., 3. and (b), 121.09, 121.095 (1) 12
(intro.), 121.095 (2), 121.105 (3), 121.15 (1m) (b), 121.23 (title), 121.85 (6) (a) 1., 13
121.85 (6) (e), 121.85 (6m), 121.85 (8), 121.85 (9) (c), 121.86 (2) (a) 1., 121.90 (2) 14
(intro.) and 121.91 (2m) (e) (intro.); and to create
15.375 (1), 20.255 (2) (t),
20.835 (2) (cb), 25.90, 65.90 (7), 67.03 (1) (c), 71.07 (5d), 115.34 (3), 115.341 (3), 2
115.343 (6), 115.345 (10), 115.36 (4), 115.361 (3), 115.366 (3), 115.405 (4), 115.42 3
(5), 115.43 (3), 115.435 (4), 115.45 (11), 115.75 (4), 115.88 (10), 115.995 (3), 4
116.08 (6), 118.153 (8), 118.43 (9), 120.145, 121.085, 121.086, 121.105 (2) (c), 5
121.135 (4) and 121.41 (3) of the statutes; relating to: abolishing the general
6equalization aid formula for distributing state school aid; creating a foundation
7plan to fund school costs; creating a School Building Projects Board; providing
8state aid to school districts for building projects; creating a school levy rate
9limit; eliminating school district revenue limits; eliminating certain categorical
10aids to school districts; modifying dispute settlement procedures in local
11government employment other than law enforcement and fire fighting
12employment; creating a refundable individual income tax credit for certain
13sales and use taxes paid by a claimant; increasing the sales and use tax;
14granting rule-making authority; and making appropriations.
Analysis by the Legislative Reference Bureau
Under the current school aid formula, the state establishes a guaranteed 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 tax base (or equalized valuation) to the guaranteed valuation. State aid is
provided to make up the difference between the school district's actual tax base and
that state guaranteed level. Thus, school districts with low property valuations per
pupil generally receive a larger share of their costs through the formula than school
districts with high property valuations per pupil.
Beginning in the 2004-05 school year, this bill eliminates the current school aid
formula. Under the bill, in 2004-05 each school district is paid an amount per pupil
that is determined by multiplying the district's prior year educational cost per pupil
by the percentage rate that, when applied annually for 20 years, will result in a per
pupil payment of $19,000 in the 2023-24 school year. Beginning in the 2005-06
school year, each year the prior year per pupil payment is increased by the same
annual percentage rate. In addition, the bill eliminates most formula-driven
categorical aid programs (such as special education and children at risk).
Current law limits the increase in the total amount of revenue per pupil that
a school district may receive from general school aids and property taxes in a school
year. This bill eliminates school district revenue limits beginning in the 2004-05
The bill creates a School Building Projects Board attached to the Department
of Public Instruction (DPI). The bill prohibits a school board from issuing a bond to
finance a capital project unless it adopts a resolution to do so by a three-fourths vote.
A school board may then apply to the board for state aid for the project. The board
provides aid for that portion of the project that it determines satisfies an educational
need; the amount of aid is determined by multiplying the cost of the approved portion
of the project by the percentage of the school district's costs that would have been paid
under the former school aid formula or by 10%, whichever is greater.
The bill also prohibits a school board from levying a tax at a rate that exceeds
three mills except to pay the principal of and interest on debt that is outstanding on
the bill's effective date or unless DPI approves a higher levy rate to deal with an
emergency. In addition, a school district may not incur indebtedness after the bill's
effective date in an amount that would require it to levy a tax at a rate greater than
three mills unless DPI approves a higher rate to deal with an emergency. The bill
prohibits a school district from using revenue from its tax levy to fund employee
salaries or benefits.
The bill provides that the total amount in a school district's fund balance in any
fiscal year may not exceed 18% of the school district's budget in that fiscal year.
With certain exceptions, school districts currently receive 15% of their total
school aid entitlement in September, 25% in December, 25% in March, and 35% in
June. Beginning in the 2004-05 school year, this bill requires that school aid be
distributed in four equal installments. The bill directs DPI to determine the
Sales and use taxes; public school aid fund
This bill increases the sales tax and use tax rates from 5% to 7.5% beginning
on January 1, 2004. The bill also creates a segregated fund called the public school
aid fund, consisting of 41% of all revenue from sales and use taxes. Beginning in the
2004-05 school year, money in that fund is used for state school aid. For school aid
in the 2004-05 school year, the bill also transfers $5,300,000,000 from the general
fund to the public school aid fund.
Dispute settlement procedures
This bill does all of the following:
1. Under current law, in local government employment other than law
enforcement and fire fighting employment, if a dispute relating to the terms of a
proposed collective bargaining agreement has not been settled after a reasonable
period of negotiation and after mediation by the Wisconsin Employment Relations
Commission (WERC), either party, or the parties jointly, may petition WERC to
initiate compulsory, final, and binding arbitration with respect to any dispute
relating to wages, hours, and conditions of employment. If WERC determines, after
investigation, that an impasse exists and that arbitration is required, WERC must
submit to the parties a list of seven arbitrators, from which the parties alternately
strike names until one arbitrator is left. As an alternative to a single arbitrator,
WERC may provide for an arbitration panel that consists of one person selected by
each party and one person selected by WERC. As a further alternative, WERC may
also provide a process that allows for a random selection of a single arbitrator from
a list of seven names submitted by WERC. Under current law, an arbitrator or
arbitration panel must adopt the final offer of one of the parties on all disputed
issues, which is then incorporated into the collective bargaining agreement.
Under current law, however, this process does not apply to a dispute over
economic issues involving a collective bargaining unit consisting of school district
professional employees if WERC determines, subsequent to an investigation, that
the employer has submitted a qualified economic offer (QEO). Under current law,
a QEO consists of a proposal to maintain the percentage contribution by the
employer to the employees' existing fringe benefit costs and the employees' existing
fringe benefits and to provide for an annual average salary increase having a cost to
the employer at least equal to 2.1% of the existing total compensation and fringe
benefit costs for the employees in the collective bargaining unit plus any fringe
benefit savings. Fringe benefit savings is that amount, if any, by which 1.7% of the
total compensation and fringe benefit costs for all municipal employees in a collective
bargaining unit for any 12-month period covered by a proposed collective bargaining
agreement exceeds the increased cost required to maintain the percentage
contribution by the municipal employer to the municipal employees' existing fringe
benefit costs and to maintain all fringe benefits provided to the municipal employees.
This bill eliminates the QEO exception from the compulsory, final, and binding
2. Current law provides that in reaching a decision, the arbitrator or
arbitration panel must give weight to many factors, including the lawful authority
of the municipal employer, the stipulations of the parties, the interest and welfare
of the public, and the financial ability of the unit of government to meet the costs of
the proposed agreement, comparison of wages, hours, and conditions of employment
with those of other public and private sector employees, the cost of living, the overall
compensation and benefits that the employees currently receive, and other similar
factors. But, under current law, the arbitrator is required to give greater weight to
economic conditions in the jurisdiction of the employer and the greatest weight to any
state law or directive that places expenditure or revenue limitations on an employer.
This bill eliminates the authorization for the arbitrator or arbitration panel to
give any weight to economic conditions in the jurisdiction of the employer or to any
state law or directive that places expenditure or revenue limitations on an employer.
3. Under current law, every collective bargaining agreement covering school
district professional employees must expire on June 30 of the odd-numbered years.
For all other local government employees, the term of a collective bargaining
agreement must be two years, except for an initial agreement and except as the
parties otherwise agree, and in no case may exceed three years. This bill treats the
terms of collective bargaining agreements for school district professional employees
the same as those of other local government employees.
4. Finally, under current law, school district professional employees are
required to be placed in a collective bargaining unit that is separate from the units
of other school district employees. This bill eliminates this requirement.
Income tax credit
This bill creates a refundable individual income tax credit for the sales and use
taxes paid by an individual in the taxable year to which the claim relates. The
maximum credit that may be claimed each year under the bill is $500, or $250 for
each spouse if a married couple files separate tax returns. The amount of credit that
may be claimed by a nonresident or part-year resident of this state is modified based
on the ratio of the claimant's Wisconsin adjusted gross income (AGI) to his or her
Because this individual income tax credit is refundable, if the amount of the
credit exceeds the taxpayer's income tax liability, the difference will be refunded to
the taxpayer by check.
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:
AB272, s. 1
15.375 (1) of the statutes is created to read:
15.375 (1) School building projects board.
There is created a school building 3
projects board attached to the department of public instruction under s. 15.03. The 4
board shall consist of the following members, appointed for 3-year terms:
(a) Three members appointed by the state superintendent of public instruction.
(b) Three members appointed by the governor.
AB272, s. 2
20.255 (2) (ac) of the statutes is amended to read:
(ac) General equalization aids.
A sum sufficient for the payment of 9
educational aids under ss. 121.08, 121.09, 121.095, and 121.105 and subch. VI of ch. 10
121 equal to $4,200,945,900 in the 2002-03 fiscal year, and
equal to the amount 11
determined by law in the 2003-04 fiscal year and biennially thereafter, and equal to
12the amount determined by the joint committee on finance under s. 121.15 (3m) (c) in
1the 2004-05 fiscal year and biennially thereafter. No moneys may be encumbered
2from this appropriation after the 2003-04 fiscal year
AB272, s. 3
20.255 (2) (t) of the statutes is created to read:
(t) State school aids.
From the public school aid fund, a sum 5
sufficient for state school aid under ss. 121.085, 121.086, 121.09, 121.095, and 6
121.105 (3), and subch. VI of ch. 121.
AB272, s. 4
20.835 (2) (cb) of the statutes is created to read:
(cb) Sales and use tax individual income tax credit.
A sum sufficient 9
to make the payments under s. 71.07 (5d).
AB272, s. 5
25.90 of the statutes is created to read:
1125.90 Public school aid fund.
There is established a separate nonlapsible 12
trust fund designated the public school aid fund consisting of 41% of all revenue from 13
sales and use taxes.
AB272, s. 6
65.90 (7) of the statutes is created to read:
The total amount in a school district's fund balance in any fiscal year 16
may not exceed an amount equal to 18% of the school district's budget in that fiscal 17
year. In this subsection, "fund balance" means the difference between fund assets 18
and fund liabilities, as determined by the department of public instruction.
AB272, s. 7
67.03 (1) (a) and (b) of the statutes are amended to read:
(a) Except as provided in s. 67.01 (9), municipalities may borrow 21
money and issue municipal obligations therefor only for the purposes and by the 22
procedure specified in this chapter. The aggregate amount of indebtedness, 23
including existing indebtedness, of any municipality shall not exceed 5% of the value 24
of the taxable property located in the municipality as equalized for state purposes 25
except that the aggregate amount of indebtedness of any school district that offers
no less than grades 1 to 12 and that at the time of incurring the debt is eligible to 2
receive state aid under s. 121.08 121.085
shall not exceed 10% of the equalized value 3
of the taxable property located in the school district.