Recently-Approved MPS Referendum Could Be A Financial 'Life Raft' Amid Pandemic

May 27, 2020

If voters didn't approve a tax referendum for Milwaukee Public Schools in April, the district would have been in a dire situation. That’s according to researchers with the Wisconsin Policy Forum, which analyzes the MPS budget each year.

MPS leaders are deciding how to spend $57 million in new referendum revenue in the upcoming year. The referendum is phased in, with the district receiving $57 million in 2020, increasing to $87 million in 2023.

Leaders billed the referendum as a big step toward giving students “the schools they deserve” by enhancing programs that are lacking at many schools, like art, music and physical education.

But Anne Chapman and Rob Henken, authors of the Policy Forum report on the MPS budget, say the referendum may not be as transformative as leaders hoped. Instead, it could serve to prop up previously-approved employee salary schedules and buffer against losses brought on by the coronavirus pandemic.

“This $57 million may be more of a life raft than a real exciting element that is going to result in lots of programming and services for MPS students,” Henken said. “It’s certainly possible that a major chunk of that $57 million is going to have to be exhausted filling holes that have emerged as a result of expenditures and revenue cuts … from the crisis.”

"This $57 million may be more of a life raft than a real exciting element that is going to result in lots of programming and services for MPS students." - Rob Henken

Wisconsin’s coffers are taking a major hit from the pandemic, and state leaders may decide to reduce support for K-12 education since it’s the largest line item in the state budget. MPS relies on state funding for 72% of its operations funding.

For now, MPS is building its budget without any projected COVID-19-related losses. For that reason, Chapman says Superintendent Keith Posley’s $1.2 billion plan for the upcoming year is a sort of “placeholder” budget.

“This does not give us a very good idea of what the district truly faces,” Chapman said. “We couldn’t assess what they’re facing, and they can’t either — they don’t have a crystal ball. What we would have liked to see is some contingency budgets. For them to say, if state aid gets cut by this percent, this is what we have to do.”

But there are some certainties, including the fact that new employee salary schedules approved by the school board last year are amounting to a major long-term expense. The salary schedules reinstate predictable "steps" for most classes of MPS workers, including teachers, with the goal of attracting and retaining qualified staff.

The Policy Forum researchers point out that MPS leaders have not presented a plan to the public about how the district will afford the salary schedules in future years.

“At the time of that it was approved, district leaders didn’t really know where the dollars were coming from to support the new structure, justifiable though it may be,” Henken said. “That’s where there could have been more discussion. And in the run-up to the referendum, it could have been made more clear that part of this was to support a new compensation framework that had already been adopted.”

In the upcoming school year, MPS plans to spend about half of the referendum money — $25.5 million — on the salary schedules. The salary schedules will increase salary and wage costs by about $76 million over five years, according to district projections.

READ: MPS Referendum Could Support 200-Plus New Positions, $25 Million In Employee Pay Raises

Chapman notes that much of the rest of the referendum revenue is slated for more than 200 new positions, which will allow MPS to grow its programs for students.

“There’s some significant increases in staffing in areas that have long been documented to be high-need for MPS,” Chapman said. “These are pretty unprecedented investments in these particular areas.”

For example, the district would increase:

  • library media specialists by 77%
  • art, music, and physical education teachers by 34.6%
  • advanced academics by 17.2%

But there is still the question of how MPS will be able to sustain new positions when it faces severe financial challenges. Those challenges include $170 million in deferred maintenance, a future loss of $24 million in state integration aid due to the ending of Chapter 220 program, and a possible cut in state support because of the pandemic.

In recent weeks, MPS board members added new expenses to the budget proposal, including funding for more ethnic studies teachers and increasing minimum pay to $15 per hour. At a meeting Thursday, the school board will decide whether to approve the spending plan.

Have a question about education you'd like WUWM's Emily Files to dig into? Submit it below.

_