Verona Area board warned state budget shortfalls could force operating referendum

The Verona Area School board heard a finance update Tuesday that projected a tighter local budget if the state’s two‑year budget does not increase special education reimbursement or overall school aid.

Superintendent Chad (Superintendent) and district finance staff reviewed assumptions tied to the joint finance committee’s omnibus proposal and said the district expects a smaller increase in state special education categorical aid than it had hoped, leaving local officials to consider a potential operating referendum to preserve services.

Why it matters: district leaders said the expected state funding changes would not fully cover inflationary costs and special education expenses, potentially creating multi‑year budget shortfalls and curbing the district’s ability to prepay capital debt without asking voters for new operating authority.

Key points presented to the board included: the district’s historical context (property tax collections of about $5 million in 1993 compared with a projected $61 million for fiscal 2025–26, and state aid rising from roughly $4 million in 1993 to an estimated $28 million for 2025–26 in the district’s projection); the district’s long‑term strategy of a relatively flat mill rate; and the risk that a flat mill rate and lower state aid could remove options the district has previously used to smooth taxes and prepay debt.

The presenters summarized the Joint Finance Committee’s work on the current state budget: the committee’s package included a smaller increase in special education categorical aid than earlier proposals and preserved a $325 per‑student school levy credit; the governor’s original proposal would have represented a much larger investment in public education. District staff cautioned that the Joint Finance Committee figures are subject to change before a final budget is passed and signed.

Financial effects the district cited: under the district’s conservative model, a modest increase in special education reimbursement (moving local assumptions toward the committee’s numbers) would yield only a few hundred thousand dollars in additional spendable revenue; a 60% reimbursement level — which has been discussed statewide but was not in the committee package — would have translated to “a couple of million dollars” for the Verona Area School District, according to presenters. District finance staff also estimated that, depending on how the next state budget finalizes, the second year of the two‑year cycle could show approximately a $2 million shortfall under current assumptions.

The board discussed the potential for an operating referendum as a contingency: district staff reminded members that an operating referendum does not always mean higher taxes for voters because past referenda changed the district’s revenue authority in other ways. The district also noted it has used prepayment of capital debt to save taxpayers interest and that large debt service (the district noted an ongoing minimum annual debt payment around $10 million) factors into planning.

Board members and the superintendent framed the shortfall as a state funding issue rather than a result of local spending decisions; several board members urged continued advocacy at the state level. The board did not take any formal action on the budget projections at this meeting; staff said they will return with refined figures once the state budget is finalized.

Ending note: district leaders said they will continue to update the board as the state process moves forward and will bring specific budget and levy recommendations once state aid figures are final and year‑end accounting is complete.