Under Pressure: Wisconsin Schools and the Threat of Consolidation

Many Wisconsin schools have a problem. Over the past decade, enrollment has consistently dropped in districts across the state’s rural counties.

The map below shows changes in enrollment over the past ten years (up to the 2015/2016 school year). As you can see, districts all across the state have lost students since 2005. However, the impact on districts is far from uniform. Rural districts have been hit harder than urban districts:

Changes in Enrollment in WI districts 2006–2016

This drop in student numbers feeds into a feedback loop — decreased enrollment means higher costs per students, which feeds into cutbacks in school services and this, in turn, creates more of an incentive for students to leave the district. The result of this pressure is the temptation for small districts to consolidate.

School consolidation occurs when two or more districts decide to merge together to create a new, unified school district. Consolidation is a tough sell to the community members affected. Especially in rural communities, local schools hold great importance: losing a district is akin to losing a part of the community’s identity. This has been a rare occurrence in Wisconsin’s history, but the number of districts exploring this option has undoubtedly increased over the past couple of years. Five school districts have merged since 2006, with the latest merger set to occur in 2018 between the Richfield and Friess Lake school districts (set to become the Holly Hill Area School District in July 2018).

The reasons for consolidation can be compelling to small schools due to the savings, increased opportunities to offer elective courses, and greater availability of student services that come with increased economies of scale. In fact, small districts can even be at a disadvantage in how they operate due to their having to pay more in areas like transportation compared to larger districts. Economics, however, does not tell the whole story.

Crunching the numbers

Districts all over Wisconsin are feeling the effects of school consolidation. Just this year, the West Allis-West Milwaukee school district closed a middle school in response to declining enrollment and financial difficulties. They aren’t alone. The Unified School District of Antigo has announced that it will consolidate within the district, merging part of the middle school class with the high school and moving 4th and 5th grade students to the middle school building. This comes on the heel of a declining student population over the past decade, with elementary enrollment down 15% overall and down 28% in rural areas.

Declining enrollment in rural schools is a problem in Wisconsin statewide. A 2016 report from the University of Wisconsin-Madison found that the number of students has gone down in nearly 75% of rural districts. Our analysis of the data reaches the same conclusion. We’ve found that the average difference in enrollment for rural districts during this time frame is a loss of 52 students. That is huge. It means that the districts losing students are precisely those that can least afford to. However, this trend makes sense given general shrinking population numbers in rural parts of the state.

Data from Wisconsin Department of Public Instruction

As the population in these areas decreases, the value of the local school district to rural communities increases. These schools serve as a point of community pride and even community identity, making any decision to reduce their connection to the community an incredibly difficult one. Additionally, studies show that smaller schools and districts, while struggling financially, oftentimes outperform their larger counterparts academically.

These struggles are made more complex by Wisconsin’s school funding laws. There is a legal limit on the amount of revenue each individual district can raise from property taxes, with a popular election required to raise funds above the $9,100 per-pupil district limit. This restriction on local revenue has really tied school districts’ hands considering the decline in state aid to education. State aid to districts has decreased by 13 percent since 2012, even as lawmakers have consistently funded the Wisconsin Parental Choice Program during this same time span to provide vouchers subsidizing private school tuition for low-income students.

What lies ahead

Help may finally be on the way over the next few years. Wisconsin’s recently-passed 2017–19 budget includes increased funding for K-12 education. This includes an increase in sparsity aid. This is additional funding made available to the smallest districts in Wisconsin, currently defined as those with fewer than 745 students. Gov. Walker had originally proposed both increasing those payments from $300 per pupil to $400 per pupil as well as adding a new $100 per student tier for districts with between 745 and 1,000 students. However, the final budget instead allows for districts to retain 50% of the prior year’s sparsity aid if they grow to big to qualify.

This will help those districts experiencing a decrease in enrollment and who are thus under the most pressure to consolidate. However, this would be a short-term fix at most because overall aid will continue to decline unless student enrollment ticks back upward. This is a problem for those districts that rely heavily on state aid for 50% or more of their budget. What’s more, increased sparsity aid and support for consolidation seem to be two conflicting goals, as increased sparsity aid is an incentive for schools to not consolidate. Why try to secure funding for consolidation as a small rural district when the state provides funding for being small and rural?

Republicans in the Legislature had created their own proposal for increasing state funding to schools. Their proposal would have kept sparsity aid payments at their current levels but would have increased the revenue limits for the lowest-spending districts. Districts would then have had the ability to raise revenue up to $9,800 per student, a $700 increase. This would have been helpful to small school districts but would have also involved more taxpayer money going to school districts across the state as opposed to Gov. Walker’s plan to more directly increase local district revenue. In the end, Governor Walker vetoed this provision in the final budget. [Edit: Governor Walker signed Assembly Bill 835 into law in 2018, increasing sparsity aid to $400 per student and gradually raising the revenue limit to $9,800 by 2022–2023, provided district taxpayers haven’t rejected a tax referendum in the past three years]

One unique response to this problem is for small schools to team up with a neighboring district to provide increased opportunities for students. For example, the Benton school district has partnered with Shullsburg for course offerings that allow some students at Benton to take select classes at Shullsburg that their school doesn’t offer. Additionally, Benton High School shares athletics teams with the Scales Mound district across the border in Illinois. They aren’t alone; 2017 marks the first year that Potosi and Cassville school districts will come together for a joint football team.

As part of the 2015–2017 budget, small districts can take this cooperation a step further and actually come together to teach students of the same grade level at a shared location. In this year’s budget, there was additional per-pupil funding proposed to incentivize districts to pursue whole grade sharing or consolidation, but Governor Scott Walker vetoed these grant programs. Whole grade sharing agreements remain as a possible way for districts to save money without formal consolidation, but unfortunately they still carry the feel of a loss of local schooling.

Hard Choices

Until school districts find a way to address their enrollment and financial difficulties, consolidation will remain a sensitive issue in Wisconsin. These communities’ pride in their schools makes any conversation about change tough. But the reality is that rural districts will have to explore possible solutions, such as increased sharing of resources between schools and increased help from the state.

However, this change isn’t a reason to silence school pride. If anything, communities should rally behind their local school even more during these tough times for public education in Wisconsin. Districts, in turn, should redouble their effort to effectively communicate not only their students’ success stories but also the strong ties that exist between their educators and the community they serve.

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