Education Spending – Part II of Series – Categorical Aids


Categorical Aids

 Categorical aids are a means of financial support from the state for specific programs. Categorical aids are either grants to schools or the state pays them based on a formula. Examples of categorical aids are school lunch, special education, and school milk. Categorical aids are outside of revenue limits for districts, so the state can award as much or as little to a district as they would like, but it is ultimately based on how much the district needs to spend on a program. Some districts have more need for categorical aids than other school districts. According to Table 8 from 2017 Informational Paper 24 from the Legislative Fiscal Bureau, categorical aids have a trend of being 10-15% of overall school funding.

While there are many categorical aids and they have changed and been renamed over the years, for the purposes of this report we will only review Sparsity Aid, Bilingual-Bicultural Aid, School Milk, School Breakfast, School Lunch, and Special Education.

State and federal laws require local school districts to provide special education and services to children in their district with disabilities ages 3 to 21. Disability is defined as:

  • Cognitive disability
  • Hearing impairments
  • Speech and language impairments
  • Visual impairments
  • Emotional disturbance
  • Orthopedic impairments
  • Autism
  • Traumatic brain injury
  • Other health impairments
  • Learning disabilities

Special education services are provided by a school district either on their own or in cooperation with cooperative educational services agencies (CESAs), and county children with disabilities education boards (CCDEBs). The state reimburses for costs for education and transporting students in special education. The state pays for the following expenses, but if costs are higher than the appropriation, the payments are prorated:

  • Salary and fringe benefits costs for special education teachers, special education coordinators, school nurses, school social workers, school psychologists, school counselors, paraprofessionals and consulting teachers.
  • Salary portion of an authorized contract for substitute teaching or paraprofessional staffing services, physical and occupational therapy services, orientation and mobility services, educational interpreter services, educational audiology, speech and language therapy, and pupil transition services.
  • Transportation for pupils enrolled in special education programs.
  • Costs for boarding, lodging, and transportation of nonresident children enrolled in a district’s special education program
  • Salary and travel for special education outside the school district of employment
  • Expenditures for the salaries of teachers and instructional aides and special transportation

According to a report by the Legislative Fiscal Bureau, the proration percentage in 2016-17 was estimated at 26.2%. That covers 421 school districts, 21 charter schools, 12 CESAs, and three CCDEBs.

Transportation categorical aids are awarded to districts that are required by state law to provide transportation of both public and private school pupils. There is a flat amount for each transported pupil, which does vary by pupil based on the distance they are transported, for this aid program. If the amount appropriated to the transportation categorical is more than the amount claimed by districts, then DPI will distribute the remaining amount in a way that is in proportion to each district’s aid entitlement. High-cost transportation aid is not included in this graph, but additional funding is provided to districts that have a higher cost of transportation than the average district and also meet certain criteria.

Bilingual-bicultural categorical aid is awarded to school districts that have a certain number of limited-English proficiency students (LEP). Having that threshold of LEP students requires the district to provide special classes. Those classes are required when there is an enrollment of 10 or more LEP pupils in grades K-3 and 20 or more in grades 4-8 and 9-12. The state share for each district has decreased over recent years because the bilingual-bicultural program has grown, and the same amount of money has been appropriated to this particular categorical aid.

State nutrition programs are in place to partially or fully cover the costs of school milk, school breakfast, and school lunch. There are also provisions for elderly nutrition (15% or 50 cents per meal, whichever is less). The state nutrition program covers the reimbursement for the cost of milk for low-income pupils grades preschool through four. Funding is also provided for the 15 cent/meal reimbursement of breakfast meals under the federal school breakfast program, and if there is insufficient funding to pay the full 15 cent/meal amount, payments are prorated. Funding for school lunch is allocated among districts, charter schools, and private schools, and the amount allocated is based on a variable percentage of federal basic reimbursement provided in 1980-1981 and according to the number of lunches served in the school year prior. Free and reduced lunch eligibility has gone up from 21% in 2001 to 43% in 2012, but funding has gone down.

Sparsity aid was established in 2007 Wisconsin Act 20, and it provides aid for school districts that have under 745 pupils and less than 10 pupils per square mile in a district’s area. The aid is $300 per pupil based on the membership of the previous school year. According to the Department of Public Instruction, Wisconsin Act 141 increases sparsity aid from $300 per pupil to $400 per pupil beginning in September 2018. Schools between 745 and 1,000 pupils and have less than 10 pupils per square mile will receive $100 per pupil.

** All data for the tables was from Legislative Fiscal Bureau or Department of Public Instruction reports.