In April, voters will decide on a referendum that would provide an additional $252 million for Milwaukee Public Schools.
The referendum is expected to raise taxes by $432 on a $200,000 home.
MPS officials say the referendum is needed due to stagnant state funding, increased inflationary costs and the loss of the federal pandemic aid. Budget officials are projecting a $200 million deficit next year, if the referendum fails — which they say would lead to cuts to staff and services.
But a new report from the nonpartisan Wisconsin Policy Forum raises questions about the referendum. The policy forum finds that MPS had budget surpluses in recent years – and that some of the district’s assumptions about its projected shortfall may not be realistic.
How can MPS go from budget surpluses to a $200 million deficit?
Report co-author and policy forum president Rob Henken says MPS had surpluses in its 2021, 2022, and 2023 budgets.
The 2021 budget surplus was likely due to pandemic and school closure-related savings like transportation. But in 2022 and 2023, MPS, like many districts, saw a dramatic increase in employee vacancies, which saved the district millions of dollars.
"A major contributor [to the surpluses] was the hundreds of vacant positions the district had," Henken says.
Part of MPS's projected $200 million deficit for next year (2025) is a $45 million decrease in vacancy savings — meaning the district expects to have far fewer unfilled positions.
Policy forum senior researcher Sara Shaw, who co-authored the report, says that would require MPS to fill almost 500 of its about 600 current vacancies.
"That seems very ambitious given the tight labor market that's been facing the district," Shaw says.
Henken and Shaw say MPS may want to update its staffing plan so it is better aligned with the number of teaching positions the district is able to fill, rather than asking for money to support positions that may remain vacant.
In a statement, MPS spokesperson Nicole Armendariz responded to those points.
"We feel good about our ability to continue to fill positions because MPS is seeing results from its extensive efforts to not only hire and retain teaching staff, but in its efforts to bring new people into the education field," Armendariz said. "For example, just this year, MPS brought about 150 international teachers into the district; we expect approximately another 100 international teachers to join our team next year."
Armendariz added that the surpluses MPS realized in past years were "largely due to the pandemic," rather than from vacancies.
MPS hasn't been able to fill all positions created by previous referendum
Four years ago, Milwaukee voters approved an $87 million referendum meant to improve students' access to certified teachers, particularly in subjects like art, music and physical education.
Shaw says higher-than-expected inflation has kept that money from going as far as MPS planned — much of it has gone toward employee cost-of-living increases of 4.7% in 2023 and 8% in 2024.
MPS did add new art, music, and other positions using referendum money, but it hasn't been able to fill about a quarter of them, according to the report.
"[These numbers] suggest the district has not yet spent a substantial amount of the dollars generated by the 2020 referendum in each of the past two years, thus raising the question of why it is requesting such a sizable additional inflow beginning in 2025," the policy forum report says.
Does MPS have less state funding? Depends on how you look at it
State funding for school districts is largely controlled by property tax caps called revenue limits. Revenue limits determine how much money in general state aid and property taxes a district receives per pupil.
MPS officials point to the fact that revenue limits have not kept pace with inflation — especially in the last few years.
Henken says it is true that MPS is receiving less inflation-adjusted dollars for school operations than it was 20 years ago: $1.3 billion in 2004 vs $900 million in 2024.
The lack of reliable revenue limit increases have led many other school districts to ask voters for more property tax funding. Ninety other districts have referendums on the ballot this spring.
On the other hand, MPS has far fewer students than it did 20 years ago. If you look at how much the district spends per student compared to 2004, the dollar amounts are basically the same, says Henken.
"It makes sense the amount of money under those revenue limits would have decreased significantly as MPS has lost about 31% of its student enrollment," Henken says.
The report also compares MPS's revenue to other Wisconsin school districts. It shows that MPS has the third-highest revenue limit out of the state's largest 10 districts — behind only Racine and Madison.
Henken and Shaw note that one could argue that MPS should receive more funding than other districts, because it serves students with greater needs — 82.5% of MPS students are economically disadvantaged, 19% have disabilities, and 14.5% are English learners.
If the referendum fails, consequences are "murky"
Shaw and Henken say after talking with MPS officials and digging into MPS's finances, they're still left with a major question: what exactly would the $252 million referendum pay for?
"Is it a cost to continue fulfilling the promise that the 2020 referendum made?" Shaw asks. "Is it to keep things exactly as they are now? Or does that $252 million take into account that there is some right-sizing the district needs to do to reflect its declining enrollment?"
Henken contrasts the MPS referendum campaign to when the City of Milwaukee was lobbying for a sales tax increase. He says, city officials were able to point to exactly what services — libraries, police, etc. — would be cut if the sales tax wasn't approved.
MPS officials have said without the referendum, school budgets would be cut by 13% and central office by 26%. But the district hasn't provided details about what positions and programs are at risk.
"There's a lot of murkiness around this," Henken says. "That's still an open question — what is the consequence?"
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