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

Referendum and vacant positions allow MPS to increase salaries despite financial challenges

teacher working with a student
Emily Files
Maryland Avenue Montessori teacher Tanja Price works on a math exercise with a student. This photo was taken on April 19, when masks were optional in MPS.

The Milwaukee Public Schools board is set to approve its $1.3 billion budget for the upcoming school year this week. The school board is holding a public hearing Tuesday and a vote on the budget Thursday.

MPS is losing funding due to stagnant state support and a sharp enrollment decline during the pandemic. But the district has two life rafts: a tax referendum passed in 2020 that allows for $84 million in additional spending and about $730 million in one-time federal aid.

The Wisconsin Policy Forum delved into where the money is going in its report on MPS’s FY23 budget proposal.

Co-author Rob Henken says overall, classrooms are not facing cuts next year.

"It certainly appears that schools will be held harmless and will see cost-to-continue increases, so there shouldn't be any negative impacts," Henken says. "And you layer on top of that the positive impacts that may come from these initial and one-time infusions of federal money, plus the continued ramp-up of referendum spending."

Extended interview with Rob Henken on MPS budget.

Amid tight labor market, MPS boosts pay

MPS has increased salaries in an attempt to attract and retain employees. The board reinstated a salary schedule in 2019 and recently approved a 4.7% cost-of-living increase in the upcoming year.

There is a question of how MPS can sustain those expenses long-term. It lost students at a rapid pace during the pandemic and state funding hasn’t kept up with inflation.

Henken says MPS is planning to spend about $40 million of its $84 million in referendum revenue on salaries.

"From what we can make out, most of that money is paying for part of that cost-of-living adjustment for all MPS employees of 4.7% [and] also helping to pay for compensation changes that were adopted in 2019 and 2020 that have certainly added some significant financial challenges to the MPS budget."

MPS also plans to use projected cost savings from vacant positions to support the salary increases.

Henken says MPS currently has 244 vacant teacher positions and dozens of other employee vacancies, which is expected to save $120 million in the current FY22 budget.

"It's a byproduct of the tight labor market and all sorts of other factors that frankly every employer is experiencing right now. They expect these high levels of vacancies to continue throughout the next fiscal year, and they have budgeted an extra $38 million worth of savings (for a total of $58 million) from those vacant savings."

The policy forum notes that MPS does not discuss this vacancy adjustment in detail in its public budget documents.

At the same time, MPS is budgeting for new positions, using its referendum money and federal stimulus aid. Henken says if MPS isn't able to fill these positions, it will have to decide whether to continue funding them or to use that money to benefit students in other ways.

$730 million in one-time federal funding

MPS is receiving a windfall of federal funding from the two most recent pandemic relief packages. The funding is known as Elementary and Secondary Schools Emergency Relief, or ESSER. MPS is allocated $225 million from ESSER 2 and $505 million from ESSER 3.

Because it's one-time money, Henken says MPS is planning to use most of it on one-time expenses — like facilities upgrades, curriculum and technology.

"We have nothing but good things to say about the great care that has been taken so far to ensure these dollars are being invested for one-time uses and not being pumped into ongoing operations," says Henken.

Other school districts have said they may have to use federal dollars to fill budget holes created by flat state funding.

Districts have until fall of 2024 to spend the federal aid, although the Department of Education has said it may grant extensions for building upgrades.

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Emily is an editor and project leader for WUWM.
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