Legislative Fiscal Bureau

One East Main, Suite 301 • Madison, WI 53703 • (608) 266-3847 • Fax: (608) 267-6873

March 15, 2011

TO: Members
Wisconsin Legislature

FROM: Bob Lang, Director

SUBJECT: Wisconsin Technical College System Aid and Levy Information and Discussion of
Governor's 2011-13 Budget Proposal

This memorandum provides information relating to major revenue sources for the Wisconsin
Technical College System (WTCS) as well as a discussion of major provisions of the Governor's
budget proposal for WTCS.

The Wisconsin Technical College System receives its funding from three major sources:
property taxes, tuition and fees, and state aid. The breakdown of the three largest sources of revenue
is shown in the table below. The property tax figures include both the operational levy and the levy
for debt service. Additional sources of revenue include self-financing operations, debt proceeds,
and contracted services to business and industry. WTCS receives federal funding primarily in the
form of financial aid to students, which totaled $333.4 million in 2009-10 and is partially included
in the tuition revenues shown in Table 1.

TABLE 1

Major Revenue Sources for Technical Colleges

($ in Millions)

Actual Estimated
2009-10 2010-11

Property Taxes $742.6 $757.0

Tuition and Fees 259.0 285.0
State General Aid 119.3 119.3
Other State Aid 17.7 18.8
Total $1,138.6 $1,180.1
 The property tax is the largest source of revenue for the technical college system, totaling
$742.6 million in 2009-10. Current law limits the property rate levied by each WTCS district for all
purposes except debt service to $1.50 per $1,000 of the district's equalized property valuation (1.5
mills), which is referred to as the operational mill rate. Through 2008, increases in property values
allowed most districts to levy below the rate limit. However, in 2010-11, after two years of declines
in statewide property values, five districts (Fox Valley, Milwaukee, Northcentral, Southwest, and
Western) had a tax rate at the mill limit, one district had a mill rate between 1.40 and 1.45 mills,
and 10 districts had mill rates of less than 1.4 mills. While there is no statutory limitation for taxes
levied for debt service costs, a district's total indebtedness may not exceed 2% of its equalized
property valuation, and building projects costing more than $1.5 million, excluding remodeling and
expenditures financed with gifts, grants, or federal funds, are subject to mandatory referendum.

Under the budget bill, technical college operating levies would be frozen at the 2010-11 levy
amounts for 2011-12 and 2012-13. Because technical college budgets for 2011-12 are not set, it is
not possible to predict what districts would levy for 2011-12 in the absence of the proposed levy
freeze. Table 2 shows the total operational levy subject to the 1.5 mill rate limit for each district
from 2005-06 through 2010-11, as well as the change in the amounts levied by each district
compared to the prior year.

As shown in Table 2, the operating levy for WTCS districts increased each year. The annual
increases range from a high of $30.3 million in 2008-09 to a low of $8.4 million in 2010-11.
Operating levies in 2010-11 reflect the impact of declining district-wide property values in some
districts, with the operating levy for the Milwaukee Area Technical College being reduced by $8.8
million compared to 2009-10. Under the bill, the 2010-11 amounts represent the maximum amount
that each district could levy in the coming biennium. In the case of those districts experiencing a
loss in property value, and that are already levying the maximum possible rate, the amounts levied
could decrease again in 2011-12, rather than remain at the 2010-11 amount.

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 TABLE 2

Technical College Operational Levy -- 2005-06 to 2010-11

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Operational Operational Operational Operational Operational Operational
District Levy Levy Levy Levy Levy Levy

Blackhawk $13,629,288 $14,115,009 $15,109,593 $15,925,359 $16,031,971 $15,888,757

Chippewa Valley 22,210,408 23,260,215 24,483,919 26,075,235 28,259,190 29,599,008
Fox Valley 42,978,142 45,863,112 48,068,286 50,118,006 50,646,561 50,242,456
Gateway 41,545,000 43,143,282 44,825,834 47,351,262 49,242,000 51,161,000
Lakeshore 14,923,500 15,574,380 16,146,300 16,826,000 17,356,000 17,711,000
Madison Area 66,334,293 70,226,990 74,086,000 78,432,605 85,383,824 92,926,042
Mid-State 13,377,494 14,004,030 14,648,057 15,351,538 15,812,084 16,372,910
Milwaukee Area 99,378,769 104,922,969 112,819,404 119,337,577 120,315,415 111,496,432
Moraine Park 24,022,893 25,056,894 26,378,155 27,631,281 29,241,845 30,147,317
Nicolet 15,485,432 16,264,728 17,088,867 17,771,863 17,688,804 18,093,373
Northcentral 19,363,947 20,782,176 21,889,978 22,878,104 23,028,071 23,038,071
Northeast WI 35,287,219 36,228,825 37,678,063 39,131,103 41,314,558 43,639,878
Southwest WI 8,557,186 9,107,000 9,682,000 10,489,000 11,013,000 11,165,380
Waukesha Co. 44,180,993 45,977,514 48,049,741 50,228,025 52,105,414 53,638,255
Western 19,628,542 20,800,315 22,248,062 24,454,767 25,168,776 24,993,137
WI Indianhead 25,320,496 26,571,724 27,807,693 29,261,843 30,344,642 31,277,929

Total $506,223,602 $531,899,163 $561,009,952 $591,263,568 $612,952,155 $621,390,945

Technical College Operational Levy -- Change over Prior Year 2006-07 to 2010-11

2006-07 2007-08 2008-09 2009-10 2010-11

Change Change Change Change Change
District Amount Amount Amount Amount Amount

Blackhawk $485,721 $994,584 $815,766 $106,612 -$143,214

Chippewa Valley 1,049,807 1,223,704 1,591,316 2,183,955 1,339,818
Fox Valley 2,884,970 2,205,174 2,049,720 528,555 -404,105
Gateway 1,598,282 1,682,552 2,525,428 1,890,738 1,919,000
Lakeshore 650,880 571,920 679,700 530,000 355,000
Madison Area 3,892,697 3,859,010 4,346,605 6,951,219 7,542,218
Mid-State 626,536 644,027 703,481 460,546 560,826
Milwaukee Area 5,544,200 7,896,435 6,518,173 977,838 -8,818,983
Moraine Park 1,034,001 1,321,261 1,253,126 1,610,564 905,472
Nicolet 779,296 824,139 682,996 -83,059 404,569
Northcentral 1,418,229 1,107,802 988,126 149,967 10,000
Northeast WI 941,606 1,449,238 1,453,040 2,183,455 2,325,320
Southwest WI 549,814 575,000 807,000 524,000 152,380
Waukesha Co. 1,796,521 2,072,227 2,178,284 1,877,389 1,532,841
Western 1,171,773 1,447,747 2,206,705 714,009 -175,639
WI Indianhead 1,251,228 1,235,969 1,454,150 1,082,799 933,287

Total $25,675,561 $29,110,789 $30,253,616 $21,688,587 $8,438,790

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 Under the bill, state general aid to technical college districts would be reduced by $35.8
million annually in 2011-12 and 2012-13, from base level funding of $119.3 million. Reliable data
is not available to project changes in the distribution of aid by technical college district under the
bill in 2011-12 and 2012-13. However, Table 3 uses data on the distribution of aid in 2010-11 to
illustrate the potential effects of the Governor's proposed funding reduction. The first column in
Table 3 shows equalized aidable costs for each technical college district under the state general aid
formula, and the second column shows the aid distribution according to data from the November,
2010 aid estimate, the most recent available estimate for the 2010-11 aid year. The third column
shows the aid distribution, based on the same November, 2010, data, if the aid level provided under
the Governor's version of the budget had applied in 2010-11. Finally, the last column shows the
amount of the change in aid for each WTCS district, had the Governor's budgeted aid level applied
in 2010-11.

TABLE 3

Technical College General Aid Distribution as if

Budget Bill Aid Level Had Applied in 2010-11

Equalized If Budget Bill

Aidable 2010-11 Aid Level Had
Costs Aid Applied in 2010-11 Change

Blackhawk $34,827,003 $4,531,700 $3,172,189 -$1,359,511

Chippewa Valley 55,506,983 7,222,600 5,055,808 -2,166,792
Fox Valley 96,376,045 12,540,500 8,778,333 -3,762,167
Gateway 55,566,572 7,230,300 5,061,236 -2,169,064
Lakeshore 27,324,831 3,555,500 2,488,860 -1,066,640
Madison Area 106,665,748 13,879,400 9,715,562 -4,163,838
Mid-State 27,775,208 3,614,100 2,529,882 -1,084,218
Milwaukee 190,619,364 24,803,400 17,362,409 -7,440,991
Moraine Park 35,443,620 4,611,900 3,228,353 -1,383,547
Nicolet Area 5,130,394 667,600 467,298 -200,302
Northcentral 53,137,867 6,914,300 4,840,019 -2,074,281
Northeast WI 86,462,049 11,250,500 7,875,325 -3,375,175
Southwest WI 27,474,036 3,574,900 2,502,450 -1,072,450
Waukesha Co. 35,278,645 4,590,500 3,213,327 -1,377,173
Western 58,084,635 7,558,000 5,290,591 -2,267,409
WI Indianhead 21,444,530 2,790,400 1,953,257 -837,143

TOTAL $917,117,530 $119,335,600 $83,534,900 -$35,800,700

LM/le

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