The approval of two massive referenda last November mark a major shift for the finances of the Madison Metropolitan School District (MMSD), providing a substantial boost in its operating budget and ushering in a series of building projects. These measures have provided breathing room for the district and its new superintendent, who is completing his first year with the Madison schools and putting forward his first budget proposal. As we will see, however, these investments in district operations, staff salaries, and capital projects will come at a substantial cost to taxpayers and have not necessarily solved all of the district’s financial difficulties.
Since 2020, we have analyzed the MMSD budget each year, and once again we seek to help explain its finances, opportunities, and challenges to the broader community. Much has changed in recent months. In November, voters approved a four-year, $100 million operating referendum for the district that added $30 million to its operating budget in the current school year and will add up to $30 million in 2026 as well. District residents also authorized up to $507 million in borrowing to renovate or replace 10 schools – work on that process is just getting started.
Some aspects of district finances are unusually clear while others have become murky. These measures provide a defined pathway for the district with respect to both its operating budget and capital plans for the coming years. In like fashion, provisions in current state law provide a clear $325 per pupil increase in 2026 to the state limits that cap district revenues from local property taxes and state general school aids combined. What is for now opaque, however, is what will happen with both the state budget and state and federal aid to the district over the next year. The state budget is typically signed in the summer and could provide at least some favorable surprises for MMSD. However, the possibility of cuts to K-12 funding at the federal level could also mean setbacks in the coming months.
For now, at least, overall state and federal aid to MMSD is projected to fall in the 2025-26 school year. Combined with the referenda, these factors mean the district appears to be moving toward a greater reliance than ever before on local property taxes, which would rise sharply under this proposal. Though the proposed budget would slow the district’s drawdown of its reserves, it also would dip into them or use other one-time money for the second year in a row to help pay for wage and staffing increases.
In one bright spot, however, MMSD’s previously declining enrollment appears to have stabilized, at least for now. Despite previous projections that enrollment would continue to fall as it had during the pandemic, one key form of enrollment count for the district is projected to rise modestly in 2026 for the second year in a row. If sustained, this turnaround would represent a boon to both the district and the larger community.
The coming months will hold great significance for the Madison schools, with the state budget being finalized and district officials moving forward with a sweeping building program. We hope this brief, which analyzes the superintendent’s proposal but does not include school board amendments, helps the larger community to follow these developments and decisions and better debate and evaluate them.