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MMSD starts 2025-26 budget work; revenue limit, state aid and referendum funding cited as key variables
Summary
District leaders briefed the operations work group that enrollment projections, the ongoing litigation over a 325-per-member revenue-limit increase and the November operating referendum will shape the FY2025–26 budget. Staff said they will present preliminary budgets in May and a draft for board action in June.
District administrators told the Operations Work Group on Jan. 13 that development of the 2025–26 budget will hinge on enrollment projections, the state budget process and the status of a contested revenue-limit increase.
Superintendent Dr. Gothard (as introduced in the meeting) and finance staff said the district is working earlier than usual to prepare for the odd-numbered year of Wisconsin’s biennial state budget cycle. Staff identified three critical uncertainties for next year: (1) whether the litigated 325-per-member revenue-limit change will remain in law, (2) final state school-aid allocations and (3) enrollment projections, which district staff said are affected by historically low birth rates that complicate predictive models.
Administrators briefed the group on revenue components and recent changes affecting the district’s outlook: the 2024 operating referendum passed and provides operating revenue over multiple years; state general aid and categorical aid remain key drivers; and property-tax levies under Wisconsin law interact with rolling three-year averages used for revenue-limit calculations. The district observed that under current law it expects an estimated $50 million in general school aid related to the state’s current 85 percent hold-harmless approach; staff cautioned that final numbers depend on the state budget this spring.
The administration said it will produce preliminary school-level allocation workbooks this winter and will present a preliminary budget in June with the ability to adjust allocations and assumptions through the summer and again in October before final adoption. Compensation planning will await the WERC CPI figure released at month’s end; staff estimated that WERC’s number is likely to be nearer 3 percent rather than the 4.12 percent used during recent negotiations.
Board members raised several policy and planning questions: how the district’s long-range strategic plan will be coordinated with budget priorities, whether benefits should figure explicitly into “total compensation” targets, the district’s unallocated staffing pot and whether the board should engage earlier in workbook staffing decisions to anticipate inequities. Staff said they will keep the board informed and bring forward specific allocation proposals as school-level roll-forward numbers are refined.
Staff noted the budget timeline: continued enrollment modeling in January–February, a draft in May, a preliminary budget for a June action and subsequent adjustments through the summer with a final review in October.
