District projects multimillion-dollar deficit; board warned fund balance will fall without state action or local measures

Appleton Area School District business services staff told the school board Monday the district’s midyear financial review shows expenses running above original estimates and a projected operating deficit unless revenues change or spending is reduced.

Ali Burr, director of business services, presented financial snapshots through December and said the district’s forecasting tool currently projects a larger deficit than budgeted. “Our current model is putting us a little higher than we had anticipated with revenues, or expenses coming in higher than revenues at about $12,500,000,” Burr said.

Why it matters: Burr and other administrators told the board the gap is structural: routine expense pressures (health‑plan costs, transportation, utilities and contracted special‑education services) are outpacing revenue, and the district must consider multiple strategies to rebalance the budget.

Burr reviewed the district’s FY24–25 totals and noted the district had included construction spending in the overall budget and that the district’s current-year projections reflect a lag in revenue and billing cycles. She told the board the district ended the prior year with a higher-than-target fund balance but that the current projected deficit would substantially reduce that buffer.

Board members asked how much the shortfalls would cost taxpayers. Burr and other staff noted the rough math: closing a projected $12 million gap on the current tax base would, in theory, equal about a $1 increase in the mill rate (one board member’s example: $250 on a $250,000 home) — but Burr emphasized the district does not control that increase directly and must await state budget action and board decisions.

Board members also raised questions about special education and voucher increases. Burr said staff are still finalizing grant and health‑plan end‑of‑year numbers; another staff member said the district would likely need to transfer about $23,000,000 to cover special‑education shortfalls if current trends continue.

Superintendent and finance staff said the next step is a budget discussion at the March 10 board meeting and that the district will examine options including state budget outcomes, operational changes (school closures or staffing reductions) or an operational referendum. “Really, they’re looking at closing schools, cutting staff, or going to operational referendum,” Burr said.

Ending: Burr said staff will continue to monitor health‑plan claims and grant reconciliations over the next quarter and come back with updated projections and proposed options for narrowing the deficit.