AB937: Bill Text

LRB-4244/1

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2009 - 2010 LEGISLATURE

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 An Act to repeal 121.07 (10) (a); to renumber 121.105 (2) (am); to renumber and amend 121.105 (1), 121.105 (2) (b), 121.85 (6) (a) and 121.86 (2) (a); to amend 121.06 (title), 121.06 (1), 121.06 (2), 121.07 (7) (b), 121.07 (10) (title), 121.08 (2), 121.08 (3), 121.08 (4) (c), 121.08 (4) (d), 121.105 (3), 121.86 (3), 121.90 (2) (bm) 1. and 121.90 (2) (bm) 2.; and to create 121.07 (1) (d), 121.07 (7m), 121.07 (8m), 121.07 (10) (e) to (g), 121.08 (2g), 121.08 (2r), 121.105 (2g), 121.85 (6) (a) 2. and 121.86 (2) (a) 2m. of the statutes; relating to: distributing one-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 Section 1. 121.06 (title) of the statutes is amended to read:

AB937,2,3 121.06 (title) Determination and certification of equalized valuation and net taxable income.

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

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

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

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

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

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

AB937,3,3 2. For a school district operating only high school grades, the sum of the net taxable incomes of its underlying elementary school districts shall be used in computing general aid.

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

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

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

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

AB937,3,15 (b) The "secondary net taxable income per member" is an amount, rounded to the next lower dollar, that, after subtraction of 50 percent of the payments under ss. 121.09 and 121.85 (6) (b) 2. and 3. and (c), fully distributes 50 percent of the amount remaining in the appropriation under s. 20.255 (2) (ac).

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

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

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

AB937,4,2 (e) 1. For a school district created by a consolidation under s. 117.08 or 117.09, in the school year in which the consolidation takes effect and in each of the subsequent 4 school years, the amounts under pars. (a) to (bm) shall be multiplied by 1.15 and rounded to the next lower dollar.

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

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

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

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

AB937,4,13 121.07 (10) (title) Required levy rate and income rates.

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

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

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

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

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

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

AB937,5,4 121.08 (2) The aid computed under sub. (1) shall be reduced by the sum of the amount by which the school district equalized valuation exceeds the secondary guaranteed valuation, multiplied by the secondary required levy rate, and the amount by which the school district equalized valuation exceeds the tertiary guaranteed valuation, multiplied by the tertiary required levy rate. In no case may the aid distributed under sub. (1) and this section subsection be less than the amount under sub. (1) (a).

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

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

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

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

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

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