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Stoughton schools face cuts in general aid despite rise in special-education reimbursements
Summary
Board heard a legislative update on the 2025–27 state budget: special-education reimbursement rates rise but general per-pupil aid holds flat, leaving the district facing an estimated drop in state general aid and likely property-tax increases to make up the difference.
The Stoughton Area School District Board of Education heard a legislative update Tuesday about the 2025–27 Wisconsin state budget and its implications for local schools, including a substantial increase in special-education reimbursement rates alongside a likely reduction in district general-aid funding that could be covered by higher property tax levies.
District staff member Lisa Pugh said Gov. Tony Evers signed the 2025–27 biennial budget on July 3 and that the budget raises special-education reimbursement to an estimated 45% by the second year, up from the district’s current reimbursement of about 30.6%. Pugh said the budget language uses a funding approach that ties reimbursements to how much special-education spending is billed to the state, rather than a guaranteed sufficiency formula. “I don’t have a lot of great news, but the budget passed,” Pugh said.
That distinction matters for the district’s revenue projections: Pugh said if reimbursements reach roughly 42% in the first year as estimated, Stoughton would receive about $775,000 more next year; if the realized percentage is about 3 percentage points lower, the district’s increase would be about $570,000. The budget also raises the high-cost special-education reimbursement to about 90% for students whose services exceed a statutory threshold.
At the same time, Pugh reported, the budget does not increase general per-pupil aid. The Department of Public Instruction (DPI) estimates approximately 66% of Wisconsin school districts will receive less state aid next year. For Stoughton specifically, DPI estimates the district will receive nearly 14% less in general aid in 2025–26 than it did in 2024–25, Pugh said. That gap, she added, will need to be covered through the district’s property-tax levy; Pugh also noted a separate $325 per-pupil increase created by the governor’s veto in the prior budget must be funded by property taxes because the legislature did not increase general aid.
Other budget provisions noted by Pugh include a one-time $30 million appropriation for mental-health supports, release of $40 million in earlier-appropriated early-literacy funds, full funding of the Office of School Safety, small increases in transportation aid and a $6 million increase for youth apprenticeships through the Department of Workforce Development. Pugh also flagged federal funding uncertainty: Wisconsin has joined a multistate lawsuit challenging the U.S. Department of Education’s decision to withhold roughly $72 million in federal funds to the state. That withholding affects programs including migrant education, English-language acquisition, Title II professional development and 21st Century Community Learning Centers, and the School Board Association has warned of potential federal funding losses statewide.
Board members asked clarifying questions about which state office houses the Office of School Safety (Pugh said it is in the Wisconsin Department of Justice) and about how the district will respond to the budget’s mix of increases and cuts. Pugh and board members discussed the timing of the legislature’s fall floor session and the School Board Association’s recommendation that board members both thank legislators for budget resources and continue to advocate for more robust school funding.
The board did not take action on the budget update; Pugh’s presentation was informational and intended to help the district prepare for upcoming budget work in October and for potential operational referendums.
