School districts don’t know yet how much state funding they’ll receive in the next two years. Democratic Gov. Tony Evers wants to increase K-12 spending by $2.6 billion, but the Republican-led budget-writing committee has yet to release its plan.
In the meantime, Milwaukee Public Schools is using a number of temporary measures to balance its $1.5 billion budget for the upcoming school year.
The district is using some one-time federal funding, known as ESSER, to pay for ongoing costs. And, it’s projecting a savings of $74 million from the hundreds of positions it hasn’t been able to fill, amid a teacher shortage.
The nonpartisan Wisconsin Policy Forum dug into these decisions in a new report on the MPS budget. It is co-authored by Policy Forum president Rob Henken and senior researcher Sara Shaw.
"The deliberations over this budget are taking place at a time when the foremost source of revenue for the district, which is aids from the state of Wisconsin... is unknown," Henken says.
In a conservative budgeting strategy, MPS is predicting no increase in state funding, which leads to a $31 million loss.
The district is also increasing salaries, with a proposed 8% cost-of-living adjustment. That salary bump is not explicitly mentioned in MPS's budget release.
Vacancy adjustment
To help pay for the $50 million salary increase and other expenses, MPS is leaning more heavily this year on its "vacancy adjustment." That refers to the expected savings the district will get from vacant positions.
"Having a vacancy adjustment is not unusual," Henken says. "I would say however that having a vacancy adjustment of $74.4 million — that's a very high number."
This year and last year, MPS has increasingly relied on vacancy savings to balance its budget. Last year the budgeted vacancy adjustment was $52 million. The year before, it was $18 million.
Like many school districts, MPS is dealing with a severe teacher shortage. The Wisconsin Policy Forum reports that the district was short more than 400 teachers in early May.
Henken and Shaw note in their report, that if MPS expects many of its positions to go unfilled, it could create a new staffing plan that better matches its workforce to its declining enrollment. That way, the public would have a clearer understanding of which positions won't be staffed next school year.
"After more than two years of exceedingly high vacancies, it would be appropriate for MPS leaders to conduct a strategic review of those vacant positions that it intends to fill and those that it can now do without," the authors write. "There may be dozens of such positions, as the district’s overall pupil-to-teacher ratio has declined to below 14:1."
ESSER funding
MPS has been eligible for more than $800 million in federal Elementary and Secondary Schools Emergency Relief (ESSER). The one-time aid is meant to help schools and students recover from the impacts of the pandemic.
MPS is still spending its ESSER funding, which expires in September 2024. It's used most of it for one-time expenses, like school building renovations and textbooks.
But the Wisconsin Policy Forum notes that in MPS's latest budget proposal, the district uses about $13 million in ESSER to pay for general school operations.
"[It's] a one-time move that will create a $13.3 million hole in the 2025 budget when ESSER funds are exhausted," Henken and Shaw write.
8% salary increase
MPS plans to pay for an 8% cost-of-living-adjustment (COLA) for staff, which Henken and Shaw say is the maximum increase allowed in the upcoming school year under Act 10. It's supported by the Milwaukee Teachers' Education Association.
MPS administrators told the Wisconsin Policy Forum that the salary increase will cost about $50 million. It's being funded partially by the vacancy adjustment, the $13 million in ESSER funds, and an $18 million cut to central office services.
MPS is also relying on its $87 million tax referendum to help with staff pay. About of a third of that revenue is going toward salary and benefits for current staff.
Shaw says, raises are a worthy investment. But MPS using temporary measures to pay for them is concerning
"This isn't a question about whether these cost-of-living adjustments are justifiable in terms of what teachers deserve to be paid," Shaw says. "But the costs need to be out there and discussed in terms of their trade-offs and long-term viability. If this is what it looks like this year, what happens in future years? How are these sustained?"
The next public hearing on the 2023-24 MPS budget proposal is May 23 at 5:30 p.m.
The Wisconsin Legislature’s budget-writing committee is expected to take up education funding soon. The state budget will play a major role in whether MPS actually has to rely on savings from vacant positions and other temporary measures next year.
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