Appleton Area School District projects multimillion-dollar deficit; board to review reduction options in March
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Summary
District finance staff told the board a midyear projection shows expenses outpacing revenues and a fund-balance drawdown; staff signaled options including program cuts, school closures or an operational referendum and will return with scenarios on March 10.
Ali Burr, director of business services for the Appleton Area School District, told the school board on Monday that the district’s midyear budget forecast shows expenses running higher than planned and a projected structural deficit for the 2024–25 year.
Burr said the district’s total budget for all funds, including capital construction, was projected at $336,000,000 and that the revenue-side budget for the general operating fund was $214,300,000. She said expenses through December were tracking above the prior model and that the district is currently modeling a deficit in the range of about $10,900,000 to $12,500,000 for the year.
The result, Burr told the board, would lower the district’s unrestricted operating fund toward the lower edge of the district’s target range. “For the end of 23–24 we ended the year at 49.8 in our Fund 10. Our current year projected deficit is about $10,900,000 and that will leave us at about 38.8,” Burr said. “That would put us at about 17.2% of our expenditures.”
Why it matters: the district aims to maintain a fund balance range to preserve short-term fiscal stability. Burr said health plan runout costs and higher-than-anticipated purchased services were the principal drivers of the current model’s worsening position.
Board members and staff discussed next steps. Burr said final numbers for some end-of-year health plan costs and grant reconciliations will be available in March and could move the projection. Superintendent Pete Goff (acting superintendent) said the board will begin a formal discussion of reduction options on March 10 and outlined the broad choices districts typically consider: closing buildings, reducing staff, or seeking additional revenue through an operational referendum.
Board member James Bacon asked about the effect on the tax rate if the board were to raise revenue directly; Burr replied that roughly $12 million on the current tax base would equal about one mill in the levy (an approximation she gave as an example). Board members asked for follow-up detail on special-education shortfalls and the voucher program trend.
What happens next: district staff will return with a multi-year projection and concrete scenarios for balancing the budget at the March 10 board meeting.