Overview
Consolidation Aid is addressed under Wis. Stats. 117.08(6) and 117.09(6).
For a school district consolidation that takes effect July 1, 2019, or later, aid is provided to a consolidated district in an amount equal to $150 per pupil attending school in the consolidated district for the first five years after the consolidation. In the sixth year, districts qualify for 50 percent of the amount received in the fifth year after the consolidation. In the seventh year, districts qualify for 25 percent of the amount received in the fifth year after the consolidation. Consolidation aid provisions relating to higher cost ceilings and guarantees under the equalization aid formula, as well as related revenue limit adjustments, do not apply to these consolidations.
School districts that consolidated before July 1, 2019, received 15 percent increases to their cost ceilings and guaranteed valuations in the general aid calculation for the first five years of consolidation. In the sixth year after consolidation, the consolidated district received a recurring revenue limit exemption equal to 75 percent of the extra (outside of revenue limit) aid received due to these provisions.
Review links below for additional details.
Categorical Aid
The 2009-11 biennial budget bill (2009 Wisconsin Act 28) increased from 10% to 15% the equalization aid formula factors (shared cost and guaranteed valuation) applicable for five years to newly-consolidated districts, starting in the 2009-10 school year. The 2013-15 biennial budget bill (2013 Wisconsin Act 28) extended from five to seven years the length of time during which consolidated school districts receive additional equalization aid and special adjustment aid, with a phase out in years six and seven. The 2015-17 budget bill (2015 Wisconsin Act 55) eliminated the 2013 changes to the equalization aid factor adjustments and created a new, recurring revenue limit exemption for districts that consolidated in 2009-10 or after. The 2017-19 biennial budget bill (2017 Wisconsin Act 59) made the enhancements to the aid formula related to cost ceilings and guaranteed valuation applicable only for a district consolidated before July 1, 2019, and created the new Consolidation Aid.
s. 117.08(6) and 117.09(6), School District Consolidation Aid
From the sum sufficient appropriation under s. 20.255 (2) (br), the Department shall pay to school districts created by consolidation on or after July 1, 2019, the following amounts:
(a) In the school year in which the consolidation takes effect and each of the subsequent four school years, $150 multiplied by the number of pupils as defined in s. 115.437(1).
(b) In the fifth school year following the school year in which consolidation takes effect, 50 percent of the amount received under par. (a) in the prior year.
(c) In the sixth school year following the school year in which consolidation takes effect, 25 percent of the amount received under par. (a) two years prior.
s. 115.436(3)(ap), Sparsity Aid
In the school year in which a school district consolidation takes effect under s. 117.08 or 117.09 on or after July 1, 2019, and each of the subsequent four year years, the Department shall pay the consolidated school district sparsity aid in an amount that is not less than 50 percent of the total sparsity aid received by the consolidating school districts in the prior school year.
Special Adjustment Aid
s. 121.105(3), Special Adjustment Aids
In the school year in which a school district consolidation takes effect under s. 117.08 or 117.09 and in each of the subsequent four school years, the consolidated school district’s state aid shall be an amount that is not less than the aggregate state aid received by the consolidating school districts in the school year prior to the school year in which the consolidation takes effect.
Example
If district A received $500,000 in equalization aid in the year prior to consolidation and district B received $500,000 in equalization aid in the year prior to consolidation, for the first five years of the consolidation, new district C would never receive less than $1,000,000 in equalization aid, regardless of the current equalization aid formula.
Revenue Limits - Wis. Stats. 121 Subchapter VII
Rule Clarifications
- s. 121.90(1m) - “Revenue" means the sum of state aid and the property tax levy.
- s. 121.90(2bm) - “State aid" excludes all of the following: s. 121.90(2)(bm)1. Any additional aid that a school district receives as a result of ss. 121.07(6)(e)1 and (7)(e)1 and 121.105(3) for school district consolidations that are effective on or after July 1, 1995, as determined by DPI.
Consolidated Districts
- s. 121.91(2m)(t)1 - If two or more school districts are consolidated under s. 117.08 or 117.09, except as follows, in the 2013-14 school year and the 2014-15 school year, the consolidated school district's revenue limit shall be determined as provided under par. (hm), and in the 2015-16 school year and in each school year thereafter, the consolidated school district's revenue limit shall be determined as provided under par. (i).
- s. 121.91(2m)(t)1.a - For the school year beginning with the effective date of the consolidation, the state aid received in the previous school year by the consolidated school district is the sum of the state aid amounts received in the previous school year by all of the affected school districts.
- s. 121.91(2m)(t)1.b - For the school year beginning with the effective date of the consolidation, the property taxes levied for the previous school year for the consolidated school district is the sum of the property taxes levied for the previous school year by all of the affected school districts.
- s. 121.91(2m)(t)1.c - For the school year beginning with the effective date of the consolidation and the two succeeding school years, the number of pupils enrolled in the consolidated school district in any school year previous to the effective date of the consolidation is the sum of the number of pupils enrolled in all of the affected school districts in that school year.
- s. 121.91(2m)(t)2 - If two or more school districts are consolidated under s. 117.08 or 117.09, and an excess revenue has been approved under sub. (3) for one or more of the affected school districts for school years beginning on or after the effective date of the consolidation, the approval for those school years expires on the effective date of the consolidation.
- s. 121.91(4)(L) - For a school district created by a consolidation under s. 117.08 or 117.09, beginning with the limit for the 2016-17 school year, the limit otherwise applicable under sub. (2m) for the fifth school year following the school year in which the consolidation took effect is increased by an amount equal to 75 percent of any additional aid that the school district received as a result of ss. 121.07(6)(e)1. and (7)(e)1.and 121.105(3) in the fourth school year following the school year in which the consolidation took effect.
Issues to Consider
Some factors involved in school finance can be more easily and accurately calculated. For example, the value of the new district would be the combined value of the two consolidating districts, and the students of the new district would be the combined students of the consolidating districts. The new value divided by the new number of students will give a new average value per student for the new district.
However, it is not possible to calculate a mill rate or a school tax for a new district after consolidation until it is known what the levy will be for the new district. The levy cannot be determined until many other questions are answered, particularly specifics about the new district’s budget. For example, will the new consolidated district still employ the same number of staff? Will it still maintain the same facilities? What will be the impact of consolidation on the number and variety of programs it offers? Future changes to the equalization aid formula could also affect aid to consolidated districts.