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WUWM's Emily Files reports on education in southeastern Wisconsin.

Federal Stimulus Funding & Referendum Brighten MPS Budget Outlook

Students going to a Milwaukee school
Emily Files
Students arrive at Clemens Elementary on MPS's first day back to in-person school during the 20-21 school year.

The Milwaukee Public Schools board is set this week to approve its $1.3 billion budget for next school year.

There’s a lot of financial uncertainty right now, because the state budget is still in the works and MPS doesn’t know whether families who left the district during the pandemic will come back.

But a budget analysis from the Wisconsin Policy Forum finds there is also reason for optimism. MPS is expecting $731 million in federal COVID-19 relief money, which is available for use over the next three years. And, voters approved a tax referendum in April 2020, which provides an additional $77 million for the next fiscal year.

Wisconsin Policy Forum president Rob Henken says the infusion of federal money will allow MPS to address some of its long-standing facilities needs. The district is proposing about $200 million in building repairs and renovations, mainly to upgrade air quality in schools and replace water fountains with bottle-filling stations.

“An open-ended question is how transformative this might be in terms of addressing the district’s structural deficit,” Henken says. “To the extent it can be used for things like facilities, which would then reduce the district’s need to borrow in future years. … The benefit of that investment would be felt for years. Is that going to solve all of MPS’s longstanding fiscal problems? Of course not, but it would chip away.”

Because the federal money is a one-time allocation, MPS can’t necessarily go on a teacher hiring spree to reduce class sizes.

Half of Referendum Funding Goes To Employee Pay & Benefit Increases

The $77 million referendum is permanent and will increase to $87 million in a couple years. So, what is MPS using that money for?

“That’s the part of the budget that’s most interesting,” Henken says.

The Wisconsin Policy Forum found that MPS is using about half of the referendum money on employee pay and benefit increases. The increases include salary schedules, which were approved by the school board in 2019 prior to the referendum. The salary schedules provide predictable pay raises for teachers and other employees based on experience and credentials.

The salary schedules support one of the goals of the referendum: to attract and retain certified staff. But that growing expense means MPS has a more limited amount of money to spend on other referendum priorities, like reducing class sizes, increasing advanced and specialized education offerings, and bolstering career and technical education.

“The amount of referendum money that is needed to pay for compensation increases could crowd out these other priorities,” Henken says. “What other decisions might they have to make in order to sustain the new investments they’re making in Montessori, and gifted and talented, and career and technical education, and so forth?”

The referendum will allow MPS to hire about 150 teachers, including in early childhood education, art, music and physical education. The district is also using the money to add 73 professional support staff, which includes nurses, social workers, psychologists and counselors.

On Thursday, the Wisconsin Legislature’s Joint Committee on Finance is meeting to discuss funding for K-12 schools in the upcoming biennial state budget. Gov. Tony Evers proposed major education spending increases, but Republicans on the budget-writing committee have cast aside Evers’ plan.

Henken says what happens with the state budget is more important for MPS long-term than the one-time federal COVID relief dollars.

MPS has a budget hearing Tuesday at 5:30 p.m. The board meets Thursday to vote on its fiscal year 2022 budget.

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Emily is an editor and project leader for WUWM.
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