School districts have known for months that their state funding would be cut significantly for the new fiscal year.

Reality hit home Friday, as districts received general state aid estimates to plug into their budgets until final numbers are released in October.

As expected, almost every Wisconsin public school district – 410 out of 424 – will receive less aid for the 2011-’12 fiscal year because of a statewide 8.4% general school aid cut, according to the state Department of Public Instruction, which is required by law to provide estimates to school districts each July 1.

A handful of districts will see small increases in projected aid because of growing enrollments, property values declining faster than the statewide average or other district-specific aid formula impacts.

The state budget set general aid for school districts at $4.262 billion for the 2011-’12 fiscal year. It leaves schools with roughly $900 million less in state aid and property tax authority over the next two years, state figures show.

“We’re still on target for assembling our budget,” Milwaukee Public Schools spokeswoman Roseann St. Aubin said Friday. “But the general aid number doesn’t provide the whole picture. It does not show the net effect of the district having to limit how much money can be raised through property taxes, or the loss of state funding for school nurses. This is just one piece of the puzzle.”

In previous years, school districts could make up for state aid cuts by raising property taxes. That’s not an option this year, as Gov. Scott Walker and the Republican-led Legislature also reduced school districts’ revenue limit authority – the combined amount they may raise through local property taxes and general aid from the state – by 5.5%.

The upshot is that many districts – perhaps two-thirds statewide – will have to cut their property tax levies to stay under revenue caps.

Many school districts handled the expected cuts by increasing employee contributions to health insurance and by requiring employees to pay 5.8% of their salary toward retirement, as part of the state’s new collective bargaining law.

The Kaukauna School District, which expects to lose $2.75 million in state aid, was able to turn a $400,000 budget deficit into an estimated $1.5 million surplus by asking workers to pay more for health insurance and contribute pay toward their pensions. That district plans to hire teachers and reduce class size.

The Pewaukee School District will gain an estimated $114,599 in state aid because of enrollment increases and property value losses. The Pewaukee district was able to balance its budget for the new fiscal year without layoffs, program cuts or increasing class sizes. Employees will pay toward their pensions and pay higher insurance premiums. The district also saved $378,000 by switching insurance providers, and had double the usual number of teacher retirements, according to Assistant Superintendent John Gahan.

The Legislature included a provision in the budget that allows school districts with union contracts that extend into the new fiscal year to sign side agreements with the unions. Those agreements allow districts to increase employee benefit contributions without reopening contracts and sacrificing other existing collective bargaining terms.

A spokesman for Walker said changes to collective bargaining gave districts a way to offset state funding cuts.

“When you look at the net effect on school districts across the state, you’ve seen how the districts that have chosen to implement these reforms, such as Kaukauna, are able to keep property taxes in check, decrease class sizes, give bonuses for performance, and in some cases even hire more teachers,” spokesman Cullen Werwie said Friday. ”Unfortunately, in some districts the local unions have stood in the way of implementing these job-saving reforms.”

Read more at JSOnline.com.