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Stoughton Area School District warned of near-$3 million tax-levy increase if state aid estimates hold
Summary
District finance staff told the school board that a $1.9 million drop in equalization aid and a $325 per-pupil revenue-limit increase without offsetting state funding could push the 2025–26 tax levy nearly $3 million higher, potentially raising the average district share of property tax bills about 10% for the year.
Erica (staff member) told the Stoughton Area School District Board of Education that the district could face a sizable increase in its property tax levy for fiscal 2025–26 if current state aid estimates are upheld. "We would be receiving about $1,900,000 less this year than we received last year," Erica said, citing the district's July 1 estimate.
Erica said the two main drivers are a $325-per-pupil increase in the state revenue limit that had no offsetting increase in equalization aid and the multi-year step-up approved in the district's recent operational referendum. "When you have a situation where...you receive less in aid than you did in the prior year, your tax levy is going up even though you don't necessarily have additional spendable resources," she said.
The finance briefing explained how the district's revenue-limit calculation and state aid certification determine the tax levy. Erica said the district's revenue limit is calculated by multiplying the district's enrollment by the per-pupil amount the state sets; the total state equalization aid is then subtracted from that limit to arrive at the property tax levy. She also emphasized timing: the district receives final state aid certification on Oct. 15 and must rely on that number when finalizing levy figures.
District staff flagged three items that affect the final levy calculation: the third-Friday student count (which feeds the revenue-limit calculation), private-school voucher payments that reduce equalization aid, and how other districts' spending and referendums alter the statewide aid distribution. Erica said the July 1 estimate reflected current submissions from other districts and noted that the final allocation could change when all districts’ submissions are processed.
On the scale of possible change, Erica presented the district's current working estimates: the district's 2025–26 levy could be nearly $3,000,000 higher than 2024–25 under the current assumptions; that would translate to an approximate 10% increase in the district portion of an average property tax bill for 2025–26 versus 2024–25. She told the board that $600,000 of that projected increase is the planned step-up from the approved operational referendum.
Board members asked clarifying questions about what counts as "state aid" in Erica's figures and about the assumptions behind the $1.9 million estimate. Erica clarified that her reference to the $1.9 million decrease was to the district's equalization aid only, not to categorical funds such as special-education reimbursement. She also described the figures as estimates and said they represented a plausible, if not worst-case, scenario until the state posts final figures on Oct. 15.
The board was told that staff will present final numbers and recommended levy language at the district's annual meeting on Oct. 20 and that community conversations (Oct. 11 at Sand Hill Elementary and subsequent sessions in January and February) will include explanation of the district's goals and how budget decisions relate to those goals. Erica said the district will continue working on a five-year financial model once annual-meeting materials are finalized.
The meeting approved the consent agenda without recorded roll-call names; the board then approved a motion to convene an executive session to discuss the district administrator evaluation. The motion to enter executive session passed on a roll call in which all listed board members voted yes. The board adjourned to closed session after the roll call.
Why this matters: The district's revenue-limit mechanics and the state’s allocation of equalization aid determine local tax levies; small changes in aid allocations or in the district’s enrollment count can shift significant sums between state funding and local property taxpayers. Final figures will be set after the state issues its Oct. 15 certification.
Ending: Board members directed staff to finalize annual-meeting materials and to continue outreach explaining how state-aid and local referendums affect the district's property-tax levy. The district plans to publish final levy proposals after receipt of the state certification on Oct. 15.
