Understanding School Funding: How Vouchers Shape Local Districts’ Budgets and Planning

As tax bills arrive this season, school funding is once again at the center of conversation in communities across Wisconsin. Public schools, private schools, virtual schools, and homeschool networks all operate within the same taxpayer-supported landscape. For families, these options offer a valuable choice. For school districts—especially in rural areas—they create an increasingly complex financial picture that influences budgets, long-term planning, and the services districts are legally required to provide.
This combined article draws on information shared by area superintendents and principals from Kewaskum and Campbellsport to help residents understand how school funding works and how vouchers factor into local property taxes.
A Regional Story: State Leaders Weigh In
The exact numbers differ by district, but rural communities across the state face a shared reality: schools are preparing students for the future while working within a funding system stretched by declining enrollment, expanded schooling options, rising student needs, and state-mandated responsibilities that do not change.
Districts stress that public, private, and homeschool families are all part of the same community. The goal is not to promote or oppose vouchers—but to ensure that every taxpayer understands how educational funding works and how statewide policy changes influence local budgets.

Statewide data from the Wisconsin Department of Public Instruction (DPI) shows that the financial impact of vouchers is not limited to one community. For 2025, DPI reports that $310.8 million in local school levies statewide is tied to private school vouchers, the highest amount ever recorded.
In simple terms, this means that more than $310 million that would normally support public schools across Wisconsin is instead being used to pay tuition at private schools. When those dollars shift, public school districts must still cover their remaining costs—such as staffing, transportation, buildings, and special education services. To do that, districts may need to rely more heavily on local property taxes or voter-approved referendums.
DPI data shows that this trend has grown steadily over time, especially as voucher participation has expanded into more communities. Rural districts, where enrollment is already declining due to lower birth rates, often feel the impact more quickly because they have fewer students and less flexibility to absorb funding shifts.
The Department of Public Instruction does not set voucher policy but administers programs as required by law. However, State Superintendent Dr. Jill Underly has publicly expressed concern about the long-term sustainability of Wisconsin’s current funding structure. Underly said Wisconsin is struggling to fund two taxpayer-supported education systems at the same time. She warned that continuing to pull resources from public schools while expanding private school funding puts both systems at risk and forces districts to seek repeated referendums just to maintain basic services
In her 2025 State of Education Address, Underly said the state faces a difficult reality after years of underfunding public schools. She noted that many districts are being pushed toward repeated referendums just to maintain basic operations, while also facing increasing requirements and oversight.
“Turning to referenda, year after year, just to survive. All while facing micromanaging from Madison and endless finger-pointing from lawmakers who too often choose politics over partnership. And here’s the truth: We are starving one system while funding another. We cannot afford to keep pulling resources away from public schools to fund private ones and expect both to thrive. That is not good stewardship. That is not Wisconsin,” stated Underly.
State Senator Chris Larson, who serves on the Legislature’s education committee, echoed concerns about the growing cost of vouchers and how they affect public schools and taxpayers. Larson noted that Wisconsin’s voucher program began more than 30 years ago as a small pilot program but has expanded statewide. He said the program now directs hundreds of millions of public dollars to private schools each year.
Wisconsin State Rep-Mark Born stated what the long and short-term goals of the voucher program are, “In the short term, the goal of the school voucher program is to empower all parents with meaningful options so children can learn in the environment that best supports their success. In the long term, the goal is to expand opportunity for kids and improve outcomes statewide by ensuring all families, not just affluent ones, can choose the school that fits their child’s academic, social, and personal needs.”
Larson pointed out that voucher costs are often not clearly listed on property tax bills because they are built into school district levies. While some communities choose to publish that information separately, many do not, leaving taxpayers unaware of how much local money is being used for vouchers.
He also highlighted differences between public and voucher schools that affect district finances. Public schools are required to accept all students, including those with disabilities, and must provide services regardless of cost. Voucher schools are reimbursed for most of their special education expenses, while public schools currently receive reimbursement for about one-third of those costs. In addition, public schools must hire licensed teachers and administrators and provide transportation, including busing for some private school students.
Larson also noted that public schools may receive students back from voucher schools during the school year, sometimes after enrollment deadlines have passed. When this happens, public schools must absorb the student and provide services, often without receiving additional funding.
Wisconsin State Senator Dan Feyen stated his stance on the program, “The short-term goal is simple, give kids a chance at a great education regardless of their background…Long term, I’d like to see the choice program continue to grow and for the successes to be measurable. Again, I don’t think this needs to come at the expense of the public education system. We can and should have both options and well-funded, effective, public schools.”
Together, DPI data and comments from state leaders help explain why school funding has become a growing concern in rural communities. As voucher participation increases and enrollment declines, districts are asked to do more with fewer resources while continuing to meet every legal requirement.
While perspectives differ on the future of school choice in Wisconsin, state and local leaders agree on one point: understanding how education dollars move is essential. As districts, families, and lawmakers continue these discussions, transparency and public awareness remain central to shaping the future of education funding across the region.
How Wisconsin Public School Funding Works
Wisconsin public schools operate under a state-mandated revenue limit, which caps how much each district can collect through state aid and local property taxes. This limit does not rise automatically with inflation or increased student needs. Public districts also cannot set tuition or charge families to cover mandatory expenses.
This means that districts cannot simply raise taxes when operating costs increase. District funding is tied to a three-year average of enrollment, even as enrollment becomes less predictable. Many district expenses are fixed: buildings, utilities, transportation, and staffing must be maintained whether a district grows or shrinks.
At the same time, public schools must provide certified teachers, state-mandated curriculum and testing, public accountability and reporting, open records and open meetings, and services for all resident students – including those not enrolled in the district.
What Are Vouchers?
Wisconsin’s voucher programs—the Wisconsin Parental Choice Program (WPCP) and the Special Needs Scholarship Program (SNSP)—allow eligible families to have part of their child’s education funded at a participating private religious, home school, charter, or virtual school.
At St. Matthew Catholic School in Campbellsport, the students’ remaining tuition balance is covered by “trying to find funds from the parish, asking for donors, or doing extra fundraising” because school vouchers do not equate to “what it costs per pupil to educate each child,” according to Principal Joan Schlaefer.
For 2025-26, the statewide voucher payments are:
• $10,877 per K-8 voucher student
• $13,371 per high school voucher student
• $16,049-$24,000 per special-needs scholarship student
These amounts rise annually and are set by the state, not by local districts.
How Vouchers Appear on Local Property Tax Bills
When a resident student uses a voucher, the state requires the resident public school district to levy local taxes to cover the cost of that voucher, even though the student does not attend that public school.
Districts do not keep this money. Instead, the district collects the amount on the local levy. That money is counted as a “revenue limit reduction,” and the funds are shifted to pay tuition at the participating private school.
This required shift appears on tax bills regardless of whether a district’s own enrollment is growing or shrinking.
The Ripple Effects on District Operations
Staffing and Class Size
Public schools must maintain safe and appropriate class sizes and meet teacher licensure requirements, but declining birth rates, open enrollment, and the growth of private, virtual, and homeschool options mean many districts must regularly adjust staffing—sometimes hiring in spring only to resize staff again in fall.
Even as enrollment declines, student needs have increased, especially in intervention and special education services.
Special Education Requirements
Unlike private, virtual, or home-based programs, public schools are legally required to provide complete special education services to any qualifying resident child, even those enrolled in private voucher schools or home-based programs who return to the district for evaluations, speech therapy, or service plans.
These services have grown significantly in cost while state reimbursement has not kept pace. Districts cannot decline service, delay evaluation, or cap enrollment.
Facilities and Daily Operations
Public schools must continue to:
• Maintain buildings and grounds
• Operate transportation routes
• Provide technology, safety upgrades, and security measures
• Offer extracurriculars, arts, athletics, 4K, and summer programming
• Serve as community resources and emergency shelters
These costs do not decrease even when enrollment fluctuates.
Why Planning Has Become More Challenging
District leaders describe today’s environment as a “pressure cooker,” shaped by:
• Variable enrollment due to choice options
• Increasing voucher participation across many communities
• Per-pupil public funding that has not kept up with inflation or student needs
• Decreasing federal aid
• Removal of statewide voucher caps starting in 2025–26, adding new unpredictability
• Falling birth rates, especially in rural counties
Districts must issue teacher contracts months before they know how many local students will enroll, open-enroll elsewhere, or use vouchers. Even small shifts can have large budget impacts.
What School Leaders Want Residents to Know
Superintendents and private school administrators across the region repeatedly emphasize: This is not about taking sides. Both public and private schools play valuable roles in the community. Many families choose private schools for reasons of faith, tradition, or fit, and districts maintain partnerships through athletics, shared services, and community events.
This is about transparency. Most residents do not realize voucher costs appear within the public school portion of the tax bill, or that districts must levy taxes to pay those costs—even when the local district doesn’t serve the child.
Public schools remain committed to serving every child. Districts must provide comprehensive services to all resident students, maintain small class sizes, and keep programs strong, even while adjusting to uncertain funding.
How the Voucher System Affects Our Districts:
Kewaskum School District Statements
In its statement, the Kewaskum School District and District Administrator Mark Bazata expressed a desire for greater transparency regarding how the voucher program affects local tax levies and is reflected on tax bills.
“Basically, we get information from the state on how much our voucher cost is, that amount gets added to our school district levy, and then we have to pay that cost. In essence, the cost of the vouchers is directly passed along to our taxpayers,” explained Bazata. “The unfortunate part of the process is that there is no transparency to this. The only thing people see on their tax bill is the school levy. No one sees what impact the private school voucher tax has on their tax bill because it is hidden. It looks like the school district gets this money when, in reality, it goes straight to the private schools.”
In the 2025-2026 school year, roughly 55 students within the Kewaskum School District are attending a private choice school through the voucher program, for a total cost of $631,426.10.
Despite the voucher program’s impact on public school funding, the Kewaskum School District continues in its vision to “be an exceptional place to learn and work where students and staff are equipped with the academic, social-emotional, and work skills to meet the challenges of their diverse futures and reach their full potential.”
Campbellsport School District Statements
In its statement, the Campbellsport School District and District Administrator Tom Wissink shared that the voucher program is increasingly affecting state aid.
“Voucher students and voucher-related expenses (the transfer from public school district to the state) are included in the state aid formula,” explained District Administrator Tom Wissink. Adding these pieces changes aid factors for not only Campbellsport but for districts statewide. When aid factors are changed, there is a redistribution of aid, as the overall pot of money to distribute statewide doesn’t change, just the mix of who gets what changes as factors within the formula change.”
In the 2025-2026 school year, the district noted that vouchers added roughly $1.2 million to the tax levy.
The district also expressed that it has seen decreasing enrollment. Lower enrollment leads to less state and local funding. This, in turn, can cause reductions in staffing, programs, and classroom and technology updates, among others.
“We try to minimize the impact on our students and classrooms by making cuts in areas away from the classroom; however, with the current funding situation, it is much more difficult to do that,” said Wissink. “Reductions in all of these areas are already happening. If the way legislators are funding school districts does not change immediately, there will be more reductions, and it will directly impact our students, staff, communities, employers, and economy.”
Within its statement, the district continued to stress that this is a state issue–not public versus private education–and emphasized the need for state legislators to take action and accountability regarding public school funding.
“Legislators make these funding decisions and do not clearly communicate the decision and its impact on local taxes to their residents. They leave this for taxpayers to find out when they get their tax bill or shift the responsibility and blame to school districts as we try to explain a decision we did not make or support to our residents,” stated Wissink. “Residents deserve to understand where and how much of their local taxes go to fund private school vouchers. A small change on the property tax bill creates a big step towards transparency and supports informed public conversation in decision-making.”
Despite the current funding climate, the district continues to work towards its “goal to provide high-quality education and opportunities for our students,” and hopes to help keep the public informed about and encourage them to be involved in state funding developments.
“We’ve got to work together to improve school funding and figure out a better way to support our schools, meet local needs, and accomplish our goals. We all want strong schools and what they do for our students, families, communities, state, and country,” said Wissink. “Public schools have been a huge factor in the success of our nation and people. De-politicize it, and let’s come together to make it even greater. This includes public and private schools. Faith and education are important and powerful forces in our schools and communities.”
St. Matthew Catholic School, Campbellsport Statements
In her statements, St. Matthew Catholic School Principal Joan Schlaefer echoed the sentiments of public and private school administrators, expressing that it isn’t about taking sides. She stresses that the school’s participation in the voucher program is about giving parents “more choices” in relation to their specific children’s education and is “not to harm or discredit” the local school district.
“It’s not a private education versus a public one,” stated Schlaefer. “It’s not to take anything away from anyone else or from the public school because they do a great job... Public schools are extended. I do know that. I know when you look at the news, and you see all the budget issues... We’re not taking anything away from them. It’s just being allocated to where the children actually are. If they come to the table, it’s our job to serve them.”
According to Schlaefer, the voucher program has allowed 23 students to come to their table. These vouchers have also given the school the resources to provide a better education to its students as a whole by allowing the school to allocate more funds to meet classroom needs.
“We can have more aides to help or to have if somebody needs a little more one-on-one attention, say if they struggle in reading or math, we can have more people on staff to help pull those children out to get those skills they need. Also, a lot more resources for different manipulatives, different learning tools,” said Schlaefer. “It has allowed us to offer more deep and rigorous learning strategies for the kids.”
Schlaefer and the school’s business manager, Naomi Schueller, emphasized that the DPI has requirements for the use of voucher funds. To ensure that choice schools are following these requirements, the DPI mandates that four audits be conducted by a certified public accounting firm each year. These audits are then sent to the DPI for further review.
“They go through every line item in the budget,” stated Schueller. “They look at our deposits. Everything’s broken down... They look at every aspect of our balance sheet and budget, and they also go in and speak with each teacher. They have to look at their attendance records, how they grade things, how they take attendance in the morning, just making sure that we are complying with all the rules that the DPI has.”
Schueller added, “They do random selections of deposits and expenses from each month of the fiscal year and need all supporting documentation to confirm everything is where it should be allocated.”
Schlaefer hopes that parents within the Campbellsport community and taxpayers continue to seek to understand the voucher program from all perspectives and how it offers education choices to families.
“It has not changed our Catholic identity. It has not changed our purpose or our goals in any way, shape or form,” said Schlaefer. “What it has done is helped the people, most of whom already were in our community and were struggling to make [private education] an affordable option for them.”
What Comes Next
As Wisconsin moves toward uncapped vouchers, districts will continue to collaborate with legislators, community leaders, and families. Many districts—including Mayville—have added informational inserts to tax bills and will continue sharing updates online and at public meetings.
Residents are encouraged to stay informed, ask questions, and use district website links to access up-to-date information, graphics, and explanations.