School board approves preliminary 2025-26 budget as officials warn shortfall tied to lower state special‑education funding

The Sheboygan Area School District Board of Education on Wednesday approved a preliminary budget for fiscal year 2025-26 while district leaders warned a lower-than-expected state special‑education funding increase could create about a $1 million deficit and worsen ongoing funding gaps for special education.

Superintendent Dr. Conrad told the board the district “transfer[s] $14,000,000 in this district every single year” from general funds to cover special‑education costs the state does not reimburse. He called the Joint Finance Committee’s recommended increase “just sad” and said it falls short of what the district and advocates sought. “We were asking for 60%. So to come in at 35% is really really hard,” Conrad said.

The budget presentation by district finance staff showed the approved preliminary plan is balanced under the district’s earlier assumption of a 10% special‑education increase and a $3.25 per‑pupil increase. Finance staff said if the state finalizes a lower increase — the Joint Finance Committee’s education recommendations at points discussed were reported in the meeting as about 5% to 35% in different proposals — the district would face a roughly $1 million shortfall. “If it goes down to 5, that creates the million dollar deficit,” a district finance staff member, Mark, told the board.

Why this matters: district officials said the gap would force additional decisions about staffing, program supports or use of reserves as the district finalizes a budget in October. Dr. Conrad said the district has been “$3,380 per student, behind inflation” since 1989, which he estimated would amount to about $31 million a year for the district.

The board approved the preliminary budget in DPI format, a required snapshot used to meet the July 1 preliminary deadline; board members were told the preliminary plan can be revised before the final budget is adopted in October. Finance staff said they had trimmed a health‑insurance increase projection from 10% to 9% based on claims through May and reallocated roughly $97,000 to the property‑insurance line pending later renewal figures.

Board discussion and next steps: several board members urged continued advocacy with legislators. One member suggested the district could sign a public letter documenting its position; Dr. Conrad said some districts were pursuing that route. The board directed administration to return to subsequent meetings with updates and possible recommendations should the state number be finalized at a lower percentage.

The board voted to approve the preliminary 2025-26 budget as presented; the motion carried.