2005 Wisconsin Act 25 Equalization Aid Shared Cost Modification

2005 Wisconsin Act 252005 Wisconsin Act 25

Equalization Aid Shared Cost Equalization Aid Shared Cost ModificationModification

Shared Cost ModificationShared Cost Modification

Wisconsin Act 25 potentially modifies:Wisconsin Act 25 potentially modifies:

2005-06 Shared Cost for Aid Paid in 2006-072005-06 Shared Cost for Aid Paid in 2006-07

2006-07 Shared Cost for Aid Paid in 2007-082006-07 Shared Cost for Aid Paid in 2007-08

Shared Cost ModificationShared Cost Modification When is Shared Cost Modified?When is Shared Cost Modified?

when the school district uses fund balance to when the school district uses fund balance to pay the school district’s unfunded pension pay the school district’s unfunded pension liability under the Wisconsin Retirement liability under the Wisconsin Retirement SystemSystem

ANDAND

the result of the result of excludingexcluding such expenditures from such expenditures from shared cost is an increase in state aid paid to shared cost is an increase in state aid paid to the school district under State Statute 121.08the school district under State Statute 121.08


What payments may be excluded from What payments may be excluded from shared cost?shared cost? Any payments made from fund balance that Any payments made from fund balance that

reduce the unfunded pension liability under reduce the unfunded pension liability under the Wisconsin Retirement System including:the Wisconsin Retirement System including:

Payments made directly to WRSPayments made directly to WRS

Debt payments as a result of the district borrowing Debt payments as a result of the district borrowing money to pay off the unfunded liabilitymoney to pay off the unfunded liability


Which districts will likely benefit from this Which districts will likely benefit from this law change?law change?

Districts that are considered “negatively Districts that are considered “negatively aided” on the second or third tiers of the aided” on the second or third tiers of the equalization aid formulaequalization aid formula

(For negatively aided districts, a decrease in shared (For negatively aided districts, a decrease in shared cost typically results in an increase in equalization cost typically results in an increase in equalization aid.)aid.)


What are the school district responsibilities?What are the school district responsibilities?

Maintain minutes of a school board meeting in Maintain minutes of a school board meeting in 2005-06 and/or 2006-07 that reflect action taken 2005-06 and/or 2006-07 that reflect action taken by the Board that the district is using fund by the Board that the district is using fund balance to pay the school district’s unfunded balance to pay the school district’s unfunded pension liability under the Wisconsin Retirement pension liability under the Wisconsin Retirement System.System.


Report on the 2005-06 and/or 2006-07 Report on the 2005-06 and/or 2006-07 PI 1505AC report, the total expenditures PI 1505AC report, the total expenditures made either directly to WRS or for debt paying made either directly to WRS or for debt paying off the unfunded liability for the year.off the unfunded liability for the year.

Check the box on the PI 1505AC that Check the box on the PI 1505AC that indicates the district used fund balance to indicates the district used fund balance to make these paymentsmake these payments


What are the school district auditor What are the school district auditor responsibilities?responsibilities?

Request from the district, documentation that Request from the district, documentation that the board has taken action and the reported the board has taken action and the reported payments have been made.payments have been made.

Attest to this information on the PI 1506AC.Attest to this information on the PI 1506AC.

Shared Cost ModificationShared Cost Modification What are the school financial services What are the school financial services

team responsibilities?team responsibilities?

Subtract eligible expenses from shared cost Subtract eligible expenses from shared cost only to the point that it increases district aid only to the point that it increases district aid eligibility when calculating equalization aid.eligibility when calculating equalization aid.

Positively aided districts will want to continue Positively aided districts will want to continue having all eligible expenses included.having all eligible expenses included.

Negatively aided districts will want eligible Negatively aided districts will want eligible expenses excluded to the point aid eligibility is expenses excluded to the point aid eligibility is increased.increased.


Update the current PI 1505 AC to include:Update the current PI 1505 AC to include:

A line to report the district’s total expenditures A line to report the district’s total expenditures made to reduce the district’s unfunded pension made to reduce the district’s unfunded pension liability under the Wisconsin Retirement System;liability under the Wisconsin Retirement System;

A checkbox to for districts to check if fund balance A checkbox to for districts to check if fund balance was used to make these payments;was used to make these payments;

New language on the certification page to reflect New language on the certification page to reflect the district’s attestation that the district incurred the district’s attestation that the district incurred unfunded liability payment expenditures and used unfunded liability payment expenditures and used fund balance to do so.fund balance to do so.


Please contact any one of the following Please contact any one of the following individuals with questions.individuals with questions.

Lori Ames 608-266-3464 Lori Ames 608-266-3464 [email protected]@dpi.state.wi.us

Brad Adams 608-267-2752 Brad Adams 608-267-2752 [email protected]@dpi.state.wi.us

Karen Kucharz 608-267-9707 Karen Kucharz 608-267-9707 [email protected]@dpi.state.wi.us

Documents

2005 Wisconsin Act 25 Equalization Aid Shared Cost Modification