For more than a century, the Public Policy Forum has prided itself on impartial and objective budget analysis that explains the financial challenges facing local governments and school districts, but that calls them out when they violate fiscal best practices in their attempts to make ends meet.
When it comes to our review of the Milwaukee Public Schools’ (MPS) finances and budgets, achieving the right balance is no easy task. On the one hand, we deeply sympathize with the district’s unenviable task of securing sufficient resources from year to year to appropriately educate a student body that suffers from extreme poverty, and to increase its competitive position vis-à-vis private and independent charter schools. Yet, on the other, we must express concern when the district’s noble efforts to do so exacerbate the challenges it will face in subsequent years.
Such was the case in 2017, when MPS used one-time savings that resulted largely from its ability to pre-fund certain retirement and debt-related payments late in 2016 to finance new positions and strategic initiatives. MPS’ leaders acknowledged the funds would need to be restored in the 2018 budget. However, they saw this as a unique opportunity to invest in high-priority initiatives, and they expressed hope that additional revenues or new internal reallocation opportunities might materialize to painlessly plug the gap in 2018.
Unfortunately, as we explain in our 2018 MPS proposed budget brief, that has not turned out to be the case. Under the proposed State budget, MPS’ State aids would increase only slightly. Meanwhile, not only do new reallocation opportunities not exist to help finance school operations, but the budget must find a way to restore $36.6 million to retirement and capital-related debt accounts, and to add $4.5 million for growing health care costs.
The result is a “retrenchment” budget for MPS that cuts 194 positions and reduces school budgets by $31 million to address debt obligations and rising fringe benefit costs. District officials say the impacts will be manageable, however, as school-related position and funding increases in the 2017 budget still exceed the reductions required in 2018. Also, the position reductions should be accommodated mainly through staff turnover, retirements, and vacancies.
Other key findings from the Forum’s 2018 MPS Proposed Budget Brief include the following:
We conclude by noting that while proposed budget reductions will affect many schools’ plans to improve teaching and student learning, MPS should weather the upcoming year without serious or lasting damage to its fiscal prospects. However, considerable heavy lifting will be required to avoid such damage in future budgets.