Special Adjustment Aid

Wis. Stat. sec. 121.105, provides additional aid to school districts that generate less than 85 percent of the state aid generated in the previous year. "State aid" in this statute means the sum of payments provided to a school district under Wis. Stat. sec. 121.08, 121.105, 121.85 and 121.86, (equalization, special adjustment, and integration aids, respectively). NOTE: Per Act 32 for the 2011-12 year only, the special adjustment rate is 90 percent.

Districts can generate less aid for a variety of reasons, but perhaps, the most common is declining enrollment. As district enrollment declines and property values increase, the district's property value per member (property value divided by membership) increases. In the Equalization Aid formula, as per-member property value increases, aid eligibility generally decreases. For district experiencing severe declines in enrollment, Equalization Aid eligibility can also severly decline.

Special Adjustment aid, otherwise known as "parachute" aid, is meant to mitigate severe declines in aid by limiting the aid loss to 15 percent a year (ensuring the district gets at least 85 percent of the previous year's eligibility.) For example, let's say a district received $1,000,000 of Equalization Aid in year 1. In year 2, due to severely-declining enrollment, this district's Equalization Aid eligibility was only $700,000. Because $700,000 is less than 85 percent of $1,000,000 ($850,000), this district would also generate $150,000 in Special Adjustment aid ($1,000,000 x .85) - $700,000 to bring them back to the 85 percent loss level.

The additional Special Adjustment aid will allow this district time and opportunity to make expenditure adjustments in reaction to the severe decline in enrollment.

For questions about this information, contact dpifin@dpi.wi.gov (608) 267-9114

Last updated on 11/30/2011 9:46:56 AM