Chilton, WI 53014

How Much Can a School Tax?

First published on 15 April 2009 Posted in Business Office

Many people believe that public schools can tax as much as they want for operations and that these citizens that attend the annual meeting are the only ones that control the school’s taxing authority. This was true until fifteen years ago, but now it is primarily the State of Wisconsin that controls public school’s taxing ability.


During the 1993-1995 State of Wisconsin budget cycle, legislators passed a new funding formula for public schools in an effort to hold down local school property taxes. This legislation is known as Revenue Limits. Along with this new revenue limit formula to “cap” what school districts can tax local property owners, the state also agreed to help fund schools in Wisconsin by aiding them with two-thirds funding and developing legislation known as the QEO (Qualified Economic Offer) which protects all of the teachers’ benefits and guarantees a 3.8% total salary and benefits package should a voluntary settlement be unattainable. These three things: Revenue Limits, Equalization Aid and QEO, make up what the public school system calls the “Three Legged Stool.”

The Revenue Limit is used to establish the amount of tax revenue available for general operations, non-referendum debt payments and capital projects. Outside of the revenue limits are taxes for referendum debt payments (new school) and community service programs (open swim and weight room programs).

For the taxing portion of the revenue limits, it is important to have a general understanding of how schools compute the revenue limit and tax. Though the computation is not a simple one to explain, in general, it is the district’s three year average of student membership multiplied by the previous year’s revenue per member, plus the State’s allowable per member increase. The amount of money that districts can then levy local property owners is the Revenue Limit (as calculated above) less the amount of Equalization Aid received from the State of Wisconsin. Equalization Aid is computed by the State, not school districts, and is based on the previous year’s shared costs. Chilton is currently aided at approximately 67% which means that 2/3 of our revenue limit is covered by State aid, the remainder is what we are allowed to tax local property owners.

So, as you can see, school districts are not allowed to tax local residents what they wish as was the case many years ago, but instead are limited by the State government and its rules regarding revenues from taxes. Schools can attain additional revenues for operation in the form of individual fees and donations. An example of this would be the participation fee of $25.00 for the high school Foods class that helps offset a portion of the grocery costs. The only other way schools can increase their income would be by going to referendum to exceed the revenue limits. This kind of referendum is happening more often as declining enrollments and minimal revenue increases by the state continue to tighten the school’s ability to maintain programs to meet State and Federal program requirements with less resources.

We encourage all members of the Chilton Public School District to attend the Annual meeting and budget hearing which will be held this fall. At this meeting, district staff will provide additional information regarding the school’s financial structure, how the structure affects the district budget as well as future budgets. For more information, please contact the District Office at 920-849-8109.

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