Sun Prairie schools project short-term balance, warn of post-referendum deficit

Phil Fry, the Sun Prairie Area School District director of business and finance, told the school board the district’s five-year budget forecast shows a small surplus for fiscal 2025-26 but a risk of a larger deficit after referendum funding expires in 2028-29.

Fry said the district’s model, built on the Robert W. Baird budget-forecast approach, projects about a $511,000 surplus on a roughly $135 million budget for 2025-26 but warned that “there’s a potential large deficit” in 2028-29 once referendum revenue ends. "When you're budgeting 1, 2, 3, 4, 5 years out, there's definitely a lot of assumptions involved," Fry said.

The forecast uses several key assumptions: enrollment projections from the University of Wisconsin APL (baseline model), a state aid increase of $325 per pupil (assumed, pending the state budget), a 3.75% salary increase for 2025-26 followed by 3% in later years, health-insurance cost increases of 10% in 2025-26 and 8% thereafter, and general inflation assumptions of about 3% after 2025-26.

Why it matters: the forecast shapes near-term staffing and program decisions and signals where the board and administration must plan once referendum support ends. Fry emphasized the uncertainty in long-range projections: "Anything can happen in the state with finances ... and then just world what's gonna happen to the world and pandemics and things like that."

Enrollment and other variables: Fry said the UW APL baseline model forecasts a decline of 208 students over five years, including an 8-student decline in the first year, though he noted the district has gained 22 students since the third-Friday count and that Sun Prairie enrollment is volatile. Senior leaders recommended using the UW APL baseline because it has been the most accurate and is conservative.

Referendum funds and initial uses: Fry outlined how the district plans to use voter-approved referendum dollars. He said about $2,000,000 in referendum-related spending will be rolled into the budget for 2025-26. Specific allocations for the coming year include an estimated $672,800 from the referendum’s educational-programming bucket and planned uses from a TLE (teaching, learning and equity) bucket of roughly $1,000,000 for 2025-26: $100,000 budgeted for transportation to provide Dual Language Immersion (DLI) access at Meadowview and Northside (with busing offered to eligible students at the other schools); $400,000 to expand dual-credit seats (Madison College STEM Academy) with an estimated $12,800 for shuttles between high schools; and $160,000 to fund two additional high-school staff positions (one at each high school) to restore smaller-enrollment classes.

Compensation reserve: Fry said the district will hold $1,000,000 in reserve for unanticipated compensation or benefits adjustments in 2025-26 because health-insurance renewal rates and the results of a support-staff and administrator wage study are not yet known. He noted the district used about $3,000,000 of referendum funds last year to increase teacher pay and that the referendum included roughly $7,000,000 for strengthened compensation and benefits overall.

Taxes and mill rate: Fry reported fiscal-year 2024-25 tax levy at $86.6 million with a mill rate of $10.16. The draft projection for 2025-26 shows a $92.5 million levy (a 6.8% increase) and a mill rate of 10.24 — a 0.08 change in the mill rate figure cited (about a 0.8% increase). He noted that the mill rate projection is lower than the $10.74 figure shown in referendum materials, saying on paper the rate would be considerably lower than what was communicated during the campaign.

Next steps and caveats: Fry said the district will continue updating the forecast annually and that staff will provide more detail at the next board meeting, with the district’s TLE team presenting additional explanation of program allocations. He also cautioned that the state budget likely will not be finalized until mid-summer, and until health-plan renewals and the wage-study results are known, some budget elements remain provisional.