Arrowhead UHS projects 15% state-aid loss, balances 2025-26 budget with higher levy

A staff member from Arrowhead UHS School District presented the district’s proposed 2025–26 general fund budget at a public budget hearing, saying the budget is balanced but will require a larger tax levy after the district learned it could lose up to 15% of state aid.

The staff member said the district built the preliminary budget on a membership of 1,784 (a three‑year average) and an enrollment of 1,862 students seated in district schools. “The revenue limit controls 84% of our revenues,” the staff member told attendees, explaining how state revenue‑limit law and state aid determine how much of the district’s operating budget comes from property taxes.

Nut graf: The district’s finance presentation showed operating revenue of about $30.5 million, a planned transfer to capital reserves, a fund balance of roughly $12.7 million, and an estimated property tax levy of roughly $19.3–19.9 million for the coming year. District staff said the state’s 2025–27 biennial budget raised the revenue limit by $325 per student but did not add new dollars to the state aid pot, which will push property taxes higher across many Wisconsin districts; Arrowhead expects to lose about 15% of its aid under the formula.

District staff explained the state funding mechanics and the local budget picture in plain terms. Under Wisconsin’s revenue‑limit framework, the district multiplies revenue limit membership by a per‑member maximum (about $11,800 per member in the presentation) to set the district’s revenue limit. State aids (equalization/aid plus small categorical aids) are subtracted from that total; the remainder is raised through the property tax levy.

Staff highlighted the difference between enrollment (students sitting in district seats) and membership (resident student count used for revenue limit calculations). Of the 1,862 students in seats this year, the district reported 252 open‑enrollment students who reside outside the district and 88 resident students who attend other districts. After adjustments, staff reported a membership figure of 1,784 for budgeting.

The staff member said Arrowhead’s state aid this year is about $4.7 million and that the district expects a maximum permitted aid loss of 15% as property value per student rises. “We actually are losing 15% in aid this year,” the staff member said. That loss, staff explained, is driven by rising equalized property value per student and the state’s choice to increase the revenue‑limit ceiling without increasing the aid pot, which shifts more cost to local taxpayers.

On revenues and expenditures, staff provided the following highlights drawn from the presentation: operating revenue about $30.5 million; roughly 69% of revenues from local sources (predominantly property taxes), roughly 20% from state sources, and under 1% from federal sources; salaries and benefits remain the largest expense (about $20 million total). Staff also noted open‑enrollment outflows and voucher payments—approximately $818,000 for out‑open‑enrollment payments and roughly $600,000 for private‑school vouchers in the budget figures presented.

Staff addressed special education reimbursement, noting the state set a 42% reimbursement rate for 2025–26 and 45% for the following year but did not appropriate a “sum‑sufficient” pot. As a result, actual reimbursement is likely to be prorated. The presenter said the district will budget conservatively (around 37% rather than the stated 42%) because the statewide reimbursement pot may not be large enough to pay the full percentage to every district.

The district also plans transfers to a long‑term capital fund (Fund 46). Staff said the district moved $1.7 million into that fund previously and expects to add about $200,000 this year while holding some project dollars until capital projects (and any future referendum decisions) are ready to proceed.

Fund balance and cash flow were explained as operational necessities rather than discretionary spending. Staff said the district’s fund balance was about $12.7 million (roughly 42% of expenditures at the June 30 measure referenced in the presentation) and that best practice is to keep about three months of working cash (roughly $7.6 million for Arrowhead). Fund balance allows the district to avoid short‑term borrowing while property tax receipts are collected on their statutory schedule.

Staff summarized the proposed tax levy and mill rate calculations: the general fund levy is projected near $19.3–19.9 million; total levy plus small levies for capital and community service produce a total mill rate presented as $1.84 per $1,000 of equalized property value (staff noted the mill rate was down a penny despite the levy increase because equalized property value rose substantially to about $10.8 billion in the district).

During the public Q&A, residents asked whether the district currently carries debt. A resident asked, “So from what I gathered, it seems like your school district does not have debt.” The staff member confirmed the district is currently debt free, noting the last referendum‑approved debt payment occurred in 2020 and a small loan was paid off recently. Staff also explained the district has statutory limits on issuing debt without voter authorization and that issuing new long‑term debt would typically require a referendum.

The presenter closed by outlining next steps: finalize numbers after state aid certification, hold a special board meeting in late October to approve the full budget and levy, and certify the levy to municipalities by the statutory deadline (staff said certification materials must be transmitted to municipalities by Nov. 10, with the district’s full certification due by Nov. 1).

Ending: Staff encouraged questions and said the district will present final adjustments at a special board meeting before certifying the levy. Residents at the hearing pressed only a few clarifying questions about debt and membership calculations; staff answered those directly and described timing for final board action.