Thanks in large part to another infusion of referendum funding, the 2027 budget proposal for the Madison Metropolitan School District (MMSD) presents a relatively stable year ahead, with few changes to enrollment, staffing, programs, or reserves. After five years of big swings in revenues and spending related to COVID-19 recovery funds, new initiatives, spiking reserves, and both operating and capital referenda, this year’s budget is quieter. The district is generally not rolling out large new initiatives within its operations, though it is continuing to upgrade 10 schools using funds authorized by the successful $507 million capital referendum in 2024.
However, this cost-to-continue operating budget does come with a significant price tag. The separate operating referendum approved by voters in 2024 provides $100 million in stages over four years. In 2027, the district will receive $20 million in property tax revenue over what the district otherwise would have been able to levy over state caps. Operating revenue and spending under the plan would both grow more rapidly than inflation. Budget headwinds for 2027 include increased pay for staff, rising healthcare costs, and growing participation of area students in independent charter schools and voucher schools and open enrollment into other school districts.
The budget would also raise the district’s property tax levy by 8.3%, which would be the third most in our data going back to 1995. This comes on the heels of a 20.4% increase in 2026, which was the most in more than three decades. The proposed increase is driven by voters’ approval of both 2024 referenda as well as the decision by lawmakers and Gov. Tony Evers to approve a state budget with no new state general school aid in both 2026 and 2027. An increase in that state funding would have offset some of the proposed local tax increases.
To some degree, these levy increases are catching the district up after years of smaller bumps. The state’s tight limits on K-12 revenues mean the average increase in MMSD property taxes since 2000 has been roughly 4.2%. However, the freeze in state general aid means the district continues to grow more reliant on local property taxpayers for its funding and now has the largest K-12 levy in the state. Expenses are also growing more quickly than revenues would be growing without the referenda.
Yet some bright spots still stand out for MMSD. District enrollment, for example, has largely stabilized over the past three years after a significant drop during the pandemic. This is positive news for MMSD’s finances because its revenue is heavily tied to the number of enrolled students. It also means that Madison’s fiscal outlook compares favorably to the state’s other largest districts, which have seen continued enrollment declines even after the effects of the pandemic subsided. Ultimately, most districts have greater challenges than MMSD, which benefits from a wealthy, growing, and generally supportive community.
Each year since 2020, the Wisconsin Policy Forum has analyzed the MMSD budget to shine light for policymakers and the public on the district’s finances and the opportunities and challenges it faces. We hope this latest installment helps Madison residents to better understand the district’s fiscal outlook and how the decisions made by district and state leaders impact students, employees, and taxpayers.