The News: The Wisconsin Institute for Law & Liberty (WILL) released its latest report, Piercing the Fog: Shedding Light on School District Referenda in Wisconsin, which uncovers various transparency problems with Wisconsin’s referendum process that costs taxpayers millions of dollars every single year. The report also calls for significant reform to Wisconsin’s referendum process to give voters more complete information when deciding.
The Quotes: WILL Research Director, Will Flanders, stated, “Using referendums to fund school districts is not going away, but for voters to make smart decisions, they must be armed with all necessary information. Our report highlights the grave transparency concerns that exist in Wisconsin’s current process while outlining policy changes to ensure voters are fully informed. Ultimately, with the changes we proposed, referenda can be an important tool for direct democracy when used properly.”
Additional Background: More than 90 school districts around Wisconsin went to referendum in the 2024 spring elections, with 58.8% passing. The role of referenda in funding Wisconsin schools has been the subject of debate for many years. Some argue that referenda are necessary for school districts to keep their doors open, while others make the case that they are examples of wasteful spending that take advantage of voter sentiments in favor of funding education.
WILL’s report provides an overview of how referenda have been used historically around the state, and then highlights three ways that school districts around Wisconsin are “gaming the system.” We then make suggestions for what policy makers can do about it.
Key Findings:
Misleading use of the Mill Rate: In a time of increasing property values, districts often focus on the mill rate in their advocacy materials to make the referendum appear like it will have less of a tax impact than it will have. Unfortunately for many taxpayers, a referendum will allow the district to maintain or increase mill rates on higher valued property.
Balloon Payments: While most personal loans are set up such that the average monthly payments stay the same even as the amount you’re paying in principal and interest changes over time, many school district referenda are not set up in this way. Instead, they create “ballooning” payments that may mislead taxpayers into not considering the full cost that they are agreeing to. We highlight one of these egregious examples in our report.
Hiding Tax Reductions if Referenda are Not Approved: Voters should be made aware—in the text of the referendum—of the extent to which tax rates could be cut if the referendum was not passed.
Solutions: Referenda in Wisconsin remain an important part of the overall picture of student funding. But new transparency in both advocacy and materials are needed. We believe school districts, especially, should be required to include the following information when presenting a referendum to voters: estimated net tax impact per $100,000 of value; estimated total cost of a capital referendum with principal and interest; a disclosure of how much tax rates would decrease if the referendum was not passed.
WILL crafted model legislation that can be used to increase transparency, found in the appendix of our report.
Read more:
Piercing the Fog: Shedding Light on School District Referenda in Wisconsin, April 2024
