Up In the Air

School budgets hinge on decisions in Madison

May 2023


As school district leaders look to their 2024 budgets and beyond, many see that a key lifeline is fraying and about to break. Federal pandemic aid that was first approved three years ago must be fully committed by September 2024, giving districts one more year of COVID-19 relief before their budgets tighten. Many of them – including both the Madison Metropolitan School District (MMSD) and Milwaukee Public Schools (MPS) – also passed referenda to increase property taxes and spending on operations in recent years and are reaching the full implementation of those measures, which means they lose yet another tool at a time when inflation remains high, staffing challenges have grown, and student learning loss remains from the pandemic.

Meanwhile, officials in the state Capitol have yet to make clear how they will reshape school finances as part of the ongoing state budget process. For the past two school years, the state has provided no increase to the per pupil revenue limits that cap the key sources of local school funding. Gov. Tony Evers wants to make up for that by providing the largest increases in the revenue limits since they were put in place in the 1993-94 school year and a huge boost in state aid to schools. GOP lawmakers have a sizable state surplus to work with but have made clear they oppose such large increases. Though there is a potential for compromise, the two sides still appear relatively far apart.

This split screen – with its certainty that federal aid is expiring but uncertainty about state revenue limits and aid – will make for a gripping political drama as the state budget is written in the coming weeks. Yet the outcome of this storyline will be all too real for districts, teachers, students, and property taxpayers. For example, for the last two years of flat revenue limits, MPS and MMSD largely avoided using the temporary COVID-19 aid for ongoing expenses such as paying teachers. Yet as the state’s two largest districts budget for no increase in state revenue caps next year, they are proposing for now at least a greater reliance on the one-time pandemic relief funds for ongoing spending – an ominous sign.

In this new brief on school district budgets for the 2023-24 school year (we refer to it here as 2024), we provide an overview of the current state of school finances in Wisconsin, as well as more detailed analyses of the proposed budgets for MPS and MMSD, which face challenges common to many districts. For example, both districts are still coping with continued declines in enrollment, staff vacancies, student learning loss and mental health concerns, and the coming end of their federal COVID-19 funds and referendum phase-ins. At present, their budgets also show some differences, including in their use of the pandemic aid and their proposed pay increases for staff.

We open our brief with consideration of statewide K-12 issues that will be pertinent to lawmakers as they deliberate on the state’s financial plan for schools and how to use the overall surplus in the upcoming two-year budget. We hope these insights will provide important perspective for state and local leaders as they consider how to address school district funding and challenges in the days to come.

Media Coverage

"A new report warns the MPS staffing picture is unclear as its budget plan leaves hundreds of jobs empty" [1]Milwaukee Journal Sentinel
"Milwaukee, Madison school finances set to lose federal lifeline, face uncertain future" [2]WisPolitics
"MMSD's financial future 'sobering', Wisconsin Policy Forum reports" [3]WISC-TV Madison
"Report explains upcoming budget challenges for Madison schools" [4]NBC 15 TV - Madison
"Milwaukee, Madison school district budgets uncertain without state funding" [5]Wisconsin Public Radio
"New report warns of fiscal cliff for Milwaukee, Madison public schools" [6]The Center Square
"MPS Faces Future Financial Crisis" [7]Urban Milwaukee
"School funding a key element of state budget debate" [8]WKOW-TV Madison
"New report warns of fiscal cliff for Milwaukee, Madison public schools" [9]APG Wisconsin
"Madison school board works to draft budget and waits for state decision on public school funding" [10]WKOW-TV Madison
"MPS to boost pay 8% partially by expecting many positions to be vacant" [11]WUWM - Milwaukee's NPR
"Public school enrollment in Wisconsin continues to fall post-pandemic" [12]Spectrum News
"Report Shows Uncertain Future For MMSD Budget" [13]WORT-FM Madison
"Billions of dollars of education aid are set to expire by the beginning of the 2024-2025 school year" [14]Spectrum News
"Gov. Evers boosted school funding for 400 years. Why some school leaders aren't impressed" [15]Milwaukee Journal Sentinel
"Has Milwaukee Public Schools enrollment dropped 10% in three years?" [16]Wisconsin Watch