The School Funding Death Spiral: How Open Enrollment Is Drai

The School Funding Death Spiral: How Open Enrollment Is Draining Rural Wisconsin Districts

Wisconsin’s open enrollment law lets parents send kids anywhere. For small districts like Phillips, Prentice, and Catawba, every student who leaves takes $8,000 to $14,000 in state funding with them. The result is a slow fiscal strangulation that referendums can only temporarily pause. Ripsaw Saloon in Prentice. Read more Price County stories from across the web.

—

Wisconsin’s open enrollment program sounds like a good idea in theory. Parents can send their children to any public school district in the state, regardless of where they live. It expands choice. It creates competition. It rewards quality.

In practice, for rural school districts in Price County, it is a fiscal death spiral.

How It Works

When a student open-enrolls from District A to District B, the state per-pupil funding follows the student. In Wisconsin, that amount ranges from approximately $8,000 for a regular education student to over $14,000 for a student with special needs. The sending district loses that money. The receiving district gains it.

For large suburban districts, losing a few students to open enrollment is a rounding error. For small rural districts like Phillips, Prentice, Catawba, and Park Falls, where total enrollment is the/a few hundred students, every departure is measurable.

The Math

Consider a district with 400 students and a per-pupil revenue of $10,000. If 30 students open-enroll out, the district loses $300,000 in annual revenue. That is roughly the cost of five teachers. To offset the loss, the district must either cut staff, increase class sizes, or reduce programs. Cutting programs and increasing class sizes gives parents more reasons to open-enroll their children elsewhere. More departures mean more lost revenue.

This is the spiral. It is not theoretical. It is happening right now in rural districts across northern Wisconsin.

Why Parents Leave

Parents open-enroll their children for many reasons. Some are legitimate educational choices: a specific program, a sport, a vocational track. But in Price County, many of the reasons are structural:

Declining programs. When budget cuts eliminate art, music, Advanced Placement courses, or extracurricular activities, parents who value those programs look elsewhere.

Class size. Rural districts that cut staff end up with larger classes. Parents who want smaller student-to-teacher ratios find them in neighboring districts.

Facilities. Aging school buildings with deferred maintenance are less attractive than newer facilities in larger districts.

Perception. Once a district develops a reputation for decline, the perception becomes self-reinforcing. Parents hear that the school is struggling, assume the education is inferior, and leave before investigating for themselves.

The Referendum Trap

When districts run out of budget flexibility, they go to referendum. Wisconsin requires voter approval for school districts to exceed state revenue limits. Referendums ask local property taxpayers to pay more to keep their schools operating.

Referendums can provide temporary relief. A successful referendum might fund operations for three to five years. But referendums do not solve the underlying structural problem: if students continue to leave, the revenue gap continues to widen, and the next referendum has to ask for even more.

When referendums fail, which they often do in communities where property taxes are already high relative to income, the district faces an immediate fiscal crisis. Program cuts accelerate. More students leave. The spiral tightens.

The Price County Context

Price County’s school districts are small and getting smaller. The county’s population has been declining for decades. Fewer families means fewer students. Fewer students means less state funding. Less funding means fewer programs. Fewer programs means more families leave.

The districts that serve Price County communities, Phillips, Prentice, Catawba, and Park Falls across the county line, face the same set of pressures. Each is trying to maintain quality with shrinking resources. Each is competing against the others and against larger districts that can offer more.

What State Policy Misses

Wisconsin’s school funding formula was designed for an era when most students attended their local district. Open enrollment was added in 1998 as a limited choice program. It has since become a significant fiscal factor, especially for small districts.

The state’s revenue limit system compounds the problem. Districts that lose students to open enrollment also lose the per-pupil revenue, but their fixed costs, buildings, transportation, administrative overhead, do not decrease proportionally. A district that loses 10 percent of its students does not need 10 percent fewer buses or 10 percent less building maintenance. The costs stay. The revenue leaves.

The state has not adjusted the funding formula to account for the differential impact of open enrollment on small districts. There is no hold-harmless provision that cushions the fiscal blow of student departures. There is no additional aid for districts facing sustained enrollment decline. The system assumes that districts can adjust their costs to match their revenue, but for small districts with high fixed costs, that adjustment means cutting into bone.

What Could Help

1. Hold-harmless funding. The state could provide transitional aid to districts that lose more than a threshold percentage of students to open enrollment in a given year, cushioning the fiscal impact and buying time for adjustment.

2. Transportation assistance. Open enrollment requires transportation, usually provided by parents. For low-income families, this limits choice to nearby districts. State-funded transportation for open-enrolled students from low-income families would make choice more equitable.

3. Enrollment decline aid. The state could provide supplemental aid to districts with sustained enrollment decline, recognizing that fixed costs do not decline proportionally with enrollment.

4. Regional collaboration incentives. Districts could share staff, programs, and facilities rather than competing for students. State incentives for collaboration rather than competition could reduce the zero-sum nature of open enrollment.

5. Referendum reform. The state could create alternative revenue mechanisms for declining-enrollment districts that do not require property tax increases, which are difficult to pass in low-income communities.

The Bottom Line

Wisconsin’s open enrollment program creates a market for students. In a market, winners and losers are expected. But when the losers are rural school districts serving communities that already face economic decline, the market is not just producing inefficiency. It is producing inequality.

The children who remain in declining districts, and they are disproportionately low-income, students with disabilities, and students without family transportation to commute to another district, are the ones who bear the cost of a policy designed to expand choice. Their choices are narrowing, not expanding.

Price County’s school districts need state policy that recognizes the structural disadvantage of small size, declining enrollment, and high fixed costs. Until that policy changes, the spiral will continue.

—

This article is part of an ongoing investigative series by Northwoods Explorer covering Price County governance, transparency, and accountability.

Sources: Wisconsin Department of Public Instruction open enrollment data, Wisconsin Statutes Chapter 118 (open enrollment), DPI school district revenue limit data, National Center for Education Statistics rural education data.

Related Coverage

This investigation connects to our ongoing series:

Last updated: May 2026

See also: our complete Price County economic dashboard with sourced data on population, employment, wages, and federal spending.

Frequently Asked Questions

How does open enrollment affect Price County schools?

Open enrollment allows Wisconsin students to attend schools outside their home district. In Price County, this has led to significant per-pupil funding losses as families choose larger neighboring districts, creating a downward spiral of declining enrollment, reduced resources, and program cuts.

What school districts serve Price County?

The School District of Phillips, Prentice School District, and Chequamegon School District serve Price County. All have faced enrollment declines consistent with the county’s population trends, putting pressure on budgets and programming.

How is school funding structured in Wisconsin?

Wisconsin funds schools through a combination of state aid, local property taxes, and federal funds. The state’s revenue limits cap how much districts can raise locally, meaning declining enrollment directly reduces both state aid and local revenue capacity — a particular challenge for rural districts.

What happens when a rural school district loses students to open enrollment?

When students leave through open enrollment, their per-pupil state funding goes with them to the receiving district. This creates a cascade: fewer students means less funding, which leads to program cuts, which drives more students to leave. Rural districts across Wisconsin, including Price County’s, have documented this pattern extensively.