“Perfect Fiscal Storm” looms for Madison schools

MADISON, Wis. (WMTV) - A new report described school budget season in Wisconsin, especially in Madison in Milwaukee, as one with a degree of hope, but also uncertainty.

The Wisconsin Policy Forum’s report was released Friday and describes the current state of Wisconsin school finances, particularly for Madison and Milwaukee schools, and what to expect for the next school year.

And the Vice President of the Wisconsin Policy Forum, Jason Stein, expressed concerns about the budget.

“It is important to note that this is in some ways a worst case scenario budget,” Stein said.

Madison Metropolitan School District is among several districts in the state dealing with budget challenges and has managed so far with help of pandemic aid and the 2020 referendum that passed to bolster funding. The report explains that 2024 is the last year to use the federal aid and is also the last increase in the operating budget resulting from the referendum, potentially putting financial pressure on the district.

“This budget cycle has clearly been among the most challenging for public education in our state’s history,” explained MMSD spokesperson Tim LeMonds. “Our reality is like most Wisconsin School districts, the MMSD budget faces a Perfect Fiscal Storm that includes:

• Record inflation;
• Declining enrollment;
• Frozen state revenue limits, and;
• A state Joint Finance Committee with a track record of not adequately funding public education.”

Under MMSD’s proposed budget, the report notes total staffing would decline. The number of full-time-equivalent employees would drop by about 3.7%, which the report notes is mostly a decrease in teaching positions and educational assistants. The report indicated that despite the drop, certain positions have seen small boosts. This includes mental health professionals, a school psychologist and a bilingual resource position.

The report’s analysis lists several factors contributing to MMSD facing budget challenges. The report notes that for the first time in a decade, MMSD would see a drop in its operating revenues for general and special education funds in the 2024 budget. The budget anticipates MMSD’s revenues falling from $515.7 million currently to $500.8 million in 2024, in part due to a drop in federal aid and the current projections.

The report also details how those who attend independent charter schools or private schools participating in the state voucher program can lead to reduced state aid for MMSD. According to the report, payments to the state rose by $11 million this year, or a 59.5% increase from the previous year. MMSD is predicting an additional increase to $13.2 million for 2024.

The report also goes into general school aid, which is the main form of state assistance for K-12 schools, being expected to fall. In 2013, they totaled $58.5 million, but are expected to decline to $37.4 million by 2024.

One of the ways Madison schools could fight budget issues is through another referendum, the report proposes. MMSD spokesperson Tim LeMonds told NBC15 that the MMSD School Board has not come to a resolution on a 2024 operations referendum yet, but are “reviewing all options.” And he said there is one thing people agree on.

“I wouldn’t say there isn’t anybody that disagrees that educators in the state of Wisconsin deserve to be paid more,” LeMonds said. “And it really comes down to the resources and the funding and what we have to pay our teachers.”

The report also notes that the state budget could play a part, saying Gov. Tony Evers has proposed raising the revenue limit by $350 per student in the 2024 school year and an additional $650 per student in 2025. The report states Republican lawmakers have said they would reduce Gov. Evers’ proposal, but said they were willing to provide at least some level of increase.

The report adds that MMSD could consider making substantial spending cuts, such as further cutting staff positions, staff compensation, or offerings for students, but these cuts could have negative effects on families and staff.

The full report can be found here.

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