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Impact of Revenue Caps On the District Budget

CFAC 2-minute videos: Impact of Revenue Caps On the District Budget


To understand the state of finances in the Hamilton School District today, you need to go back nearly 30 years ago when the Wisconsin State Legislature implemented revenue caps. Since 1993, school districts have operated under limits which restrict them from generating revenue through state aid and local property taxes. The limit is based on enrollment changes and any additional funds provided by the Legislature, but these additions have not kept up with the annual cost-of-living or inflationary increases embedded within district budgets.

When revenue caps were put in place, it essentially locked in program and staffing inequities that previously existed. Then, Hamilton School District was a more rural district than it is now and programming was not consistent with neighboring districts. To add programming that other districts had, the district needed to reallocate funds from the existing budget or find savings elsewhere. 

That is why neighboring districts are able to spend as much as $950 more per pupil than the Hamilton district does. 

30 years of revenues not keeping pace with inflation have meant budget cuts and reallocated resources – always with the intent of keeping cuts as far away from the classroom as possible. Through the years the district has required employees to pay a greater share for retirement contributions, eliminated post-employment healthcare coverage through conversion to a Health Retirement Account, implemented energy-efficient practices and restructured debt several times. Significantly, the district has made changes to its self-funded employee medical and drug plan that has kept healthcare expenses below national average increases.

With nearly 55% of the budget allocated to direct instruction that goes into the classroom – such as teachers, instructional assistants, textbooks, computers and desks – and another 40% for services that support instruction, future cuts will have an impact on the educational program.

Stay tuned for next week’s 2-minute video that will provide more information about the district’s financial situation, including federal ESSER funds.