Voucher Program Expansion and the
Impact on your District
WASDA Annual Education Conference
May 4, 2016
2:15 – 3:15PM
Robert W. Baird & Co. Incorporated is providing this information to you for discussion purposes. The materials do not contemplate or relate to a future issuance of
municipal securities. Baird is not recommending that you take any action, and this information is not intended to be regarded as “advice”’ within the meaning of
Section 15B of the Securities Exchange Act of 1934 or the rules thereunder.
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Presenters
Robert W. Baird & Co.
Public Finance
Mike Clark
Director
Robert W. Baird & Co.
Public Finance
Debby Schufletowski
School Business Specialist
• 414-765-7326 (office)
• [email protected]
• 715-552-3567 (office)
• [email protected]
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History of Parental Choice (Voucher) Program
Milwaukee Parental
Choice Program
started in 1990-91
•Approximately 350 student
•7 Private schools
•Oldest program in America
2015-16
•26,766.9 Student FTE
•21,112.9 K-8 FTE
•5,654 9-12 FTE
•117 Private Schools
Racine Parental
Choice Program
started in 2011-12
•Approximately 250
students
•8 Private Schools
•Green Bay originally
included
2015-16
•2,055.6 Student FTE
•1,671.6 K-8 FTE
•384 9-12 FTE
•19 Private Schools
Wisconsin Parental
Choice Program
started in 2013-14
•511 student (headcount)
•25 Private Schools
•Funding for private schools
from state general purpose
revenues
2015-16
•2,472.5 Student FTE
•1,765.5 K-8 FTE
•707 9-12 FTE
•82 Private Schools or
Systems
•28 Districts at the 1%
maximum of enrollment
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Funding of Parental Choice Programs
MPCP
Funding
WPCP & RPCP Funding
71.2% from general
purpose revenue
Act 55 changed funding for WPCP
and RPCP
28.8% from MPS
equalization aid
reduction
Continuing students from general
purpose revenues
New students funded from all
districts with student participating
in WPCP
Resident district can not back fill
the loss of aid with levy
Districts a net revenue limit gain
($5.28 Million in 2015-16)
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2016-17 and Going Forward
(Based on current rules)
• Milwaukee Parental Choice Program
• Student qualifications for MPCP
• Family income at or below 300% of the Federal Poverty Level (only for new students)
• Continuing students or students on the DPI waiting list do not require to prove
income eligibility
• Reside in the City of Milwaukee
• Application windows each every month
• 124 Private School Registered for 2016-17
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2016-17 and Going Forward
(Based on current rules)
• Racine Parental Choice Program
• Student qualifications for RPCP
• Family income at or below 300% of the Federal Poverty Level (only for new students)
• Continuing students or students on the DPI waiting list do not require to prove
income eligibility
• Reside in the Racine Unified School District
• Must meet one of the prior year attendance requirements
• Enrolled in a public school in Wisconsin in the 2015-16 school year
• Not been enrolled in school in the 2015-16 school year
• Applying for Kindergarten, 1st or 9th grade at a private school in 2016-17
• Participated in the RPCP in the 2015-16 school year
• Application windows each month February-September
• 19 Private School Registered for 2016-17
• No longer a net revenue limit gain
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2016-17 and Going Forward
(Based on current rules)
• Wisconsin Parental Choice Program
• Student qualifications for WPCP
• Family income at or below 185% of the Federal Poverty Level (only for new students)
• Continuing students or students on the DPI waiting list do not require to prove
income eligibility
• Reside in a Wisconsin School District other than in the City of Milwaukee or RUSD
• Must meet one of the prior year attendance requirements
• Enrolled in a public school in Wisconsin in the 2015-16 school year
• Not been enrolled in school in the 2015-16 school year
• Applying for Kindergarten, 1st or 9th grade at a private school in 2016-17
• Participated in the WPCP in the 2015-16 school year
• Application window February 1-April 20
• 135 Private School Registered for 2016-17; in 2016-17 no more than 1% of the
pupil membership of a public school district can participate
• No longer a net revenue limit gain
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Special Education Vouchers
• Beginning in 2016-17, allow a child with a disability to attend a participating private school
of their choice, if that child has previously been rejected from attending a school in a
nonresident school district under the public open enrollment program. State provides a
$12,000 voucher to private school.
Funding
• DPI:
o Pays $12,000 to the private school for each child participating in the program.
o Reduces the resident school district’s equalization aid amount by a corresponding
amount. If insufficient equalization aid, DPI will reduce other state aids received.
o Increases a school district’s student membership for revenue limits and general
school aid purposes.
• School Boards:
o Prohibited from “back filling” the aid reduction with property tax levy increase.
o Count private school students receiving voucher as part of federal set aside.
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Wisconsin Voucher Program
2016-17
Wisconsin Parental Choice Program (WPCP) Total 133
Racine Parental Choice Program (RPCP) Total 19
Milwaukee Parental Choice Program (MPCP) Total 124
2
1
1
3
4
4
4
3
9
4
1
3
8
5
6
4
18
4
1
124
41
7
19
Source
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Other Student Choice Options: Open Enrollment
Applications and Transfers
60,000
50,000
Enrollment
40,000
30,000
20,000
10,000
0
*Includes alternative applications and transfers
All Apps*
All Transfers*
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Source: DPI
Other Student Choice Options: Virtual Charter
Schools (VCS)
8,000
33
35
30
7,000
27
30
25
6,000
25
5,000
20
16
4,000
15
3,000
14
15
13
11
9
2,000
1,000
10
7
4
5
5
0
0
Total Enrollment*
Number of Virtual Charter Schools
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Source: DPI
Diving into the Finances
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Financial Impact – Base Information
FTE Maximum
• 1% for 2015-16 and
2016-17
• Increasing by 1% each
year until 10%; then
cap lifted
Equalization Aid
Impact
Categorized
• K-8
• 9-12
• SPED
Tax Levy Impact
Revenue Limit
Impact
Budget Impact
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Revenue Limit and State Aid – Base Information
One-time
Resident
Membership
(FTE)
$ per pupil
State EQ Aid
Revenue Limit
Authority
(Non-recurring)
exemptions
On-going
(Recurring)
exemptions
Revenue Limit
Tax Levy
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Revenue Limit and State Aid – First Year of
Voucher Impact (i.e. 2015-16)
• Exemption = FTE *
$ per pupil
• Exemption
increased revenue
limit authority
Resident
Membership
(FTE)
One-time
$ per pupil
(Non-recurring)
exemptions
• State aid was not
impacted in 15-16
(Why???)
• Revenue Limit
Levy Increased
State EQ Aid
• Some districts
chose to levy less
than their amount
(more later)
• In summary:
increase in
operational
revenue. Was it
theirs to keep?
Revenue Limit
Authority
On-going
(Recurring)
exemptions
Revenue Limit Tax
Levy
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Revenue Limit and State Aid – First Year of
Voucher Impact (i.e. 2015-16)
Sample district:
• 69 voucher FTE
• $9,822 Revenue
Limit $ / pupil
• $677,739 revenue
limit increase
(69*$9,822)
• $0 increase in EQ
Aid
• $677,739 increase
to revenue limit
levy
• Approx.
$.08/$1000 mill
rate impact.
Actual
2015-16
Revenue and Levy Impact
Maximum % FTE as per state budget
Maximum # FTE (based on prior year count)
K-8 FTE
9-12 FTE
# of Voucher FTE
Revenue Limit Per Pupil $
Revenue Limit Exemption
Equalization Aid
Voucher Levy
Levy $
Mill Rate Impact / $1,000 property value
1%
129
48
21
69
$9,822
$677,739
$0
$677,739
$677,739
$0.08
• Was this $677,739
for the district to
keep?
This example is for hypothetical purposes only
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“Aid Reduction” Impact
• “Aid Reduction” is
coded as a fund 10
expenditure.
• It is netted with
the district’s June
aid payment –
hence the “aid
reduction” label
Revenue Limit
Authority
• Increases Fund 10
revenue budget
“Aid Reduction”
• Increases Fund 10
Expenditure Budget
• K-8: $7214 / FTE
• 9-12: $7860 / FTE
• SPED (new in 16-17)
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“Aid Reduction” Impact
• In this example,
revenue limit
authority increased
$677,739
• The district’s “aid
reduction” (fund 10
expense) =
$511,332
• Therefore, in 15-16
the district gained
$166,407 for
operational use
• What are the
political
ramifications of
this?
• Are there costs the
district incurs due to
private/voucher
schools?
Actual
2015-16
Revenue and Levy Impact
Maximum % FTE as per state budget
# of Voucher FTE
1%
69
Revenue Limit Per Pupil $
$9,822
Revenue Limit Exemption
$677,739
Budget Impact
K-8
9-12
Voucher Expenditure
Voucher Surplus
p/p $
$7,214
$7,860
$346,272
$165,060
$511,332
$166,407
This example is for hypothetical purposes only
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2016-17 Legislative Changes
• Concept stays the same. Revenue Limit Exemption Amount changes.
• 2015-16 exemption = FTE * RL $ per pupil
• 2016-17 exemption = FTE * K-8 $ + FTE * 9-12 $ + FTE * SPED $
• Which means: Revenue Limit exemption will equal “aid reduction”
• Why would this change come about (discussed on last slide)?
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Equalization Aid Impact
• Equalization aid is based on prior year data
• Distributed on
• Property wealth / member
• Shared costs / member
• Voucher FTE and expenditure from 15-16 is included in 16-17 aid
calculations
• How does this impact a school with 15-16 voucher students?
• Property wealth / member?
• Shared costs / member?
• Does this impact districts with no voucher students?
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Revenue Limit and State Aid – 2nd Year Impact
• Revenue limit
exemption (if
applicable)
calculated on
current year FTE #s
• As a result, revenue
limit authority will
increase
• State EQ Aid will
increase due to
prior year voucher
FTE and costs
• Revenue limit levy
will adjust
• Very important: The
impact for each
district will vary
based on # and
grades of voucher
students and on
district’s position in
the EQ Aid formula
Resident
Membership
(FTE)
One-time
$ per pupil
(Non-recurring)
exemptions
Revenue Limit
Authority
State EQ Aid
On-going
(Recurring)
exemptions
Revenue Limit
Tax Levy
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Previously Attending vs. Not Previously Attending
• Is the financial impact different for those students who once attended your district
and those who never did?
• September FTE
• Revenue Limit non-recurring exemption
• “aid reduction”
This may be
more detail than
you want to
know…
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Questions?
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Disclosures
Robert W. Baird & Co. Incorporated is providing this information to you for discussion purposes
only. The information does not contemplate or relate to a future issuance of municipal securities.
Baird is not recommending that you take any action, and this information is not intended to be
regarded as “advice” within the meaning of Section 15B of the Securities Exchange Act of 1934 or
the rules thereunder. In providing this information, Baird is not acting as an advisor to you and does
not owe you a fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934. You
should discuss the information contained herein with any and all internal or external advisors and
experts you deem appropriate before acting on the information.
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