Appleton Area School District reports $13 million structural deficit; superintendent announces April referendum

Appleton Area School District Superintendent Greg Hartjes said the district faces a structural shortfall of about $13 million heading into fiscal 2024–25 and announced the district will place a four-year referendum on the April ballot to address the gap. "We ended this year with a $13,000,000 deficit," Hartjes said.

Hartjes told viewers the shortfall grew after several years in which state funding increases did not keep pace with inflation. He said the 2021–23 state budget included no increase for the district in 2022, contributing to a $1.5 million deficit in fiscal 2022–23. The district reported a $7 million deficit for fiscal 2023–24 and a $13 million deficit for fiscal 2024–25.

The superintendent identified several cost drivers that he said widened the gap: technology and contract renewals that rose more than 20%, a sharp increase in cybersecurity expenses ("we now pay $500,000 for cyber security"), and substantial special-education costs that he said the district had to cover. "In this year, we had to transfer and cover $25,000,000 in special ed costs," Hartjes said, adding that those services are federally required and that the state is providing less of the support the district expects.

Hartjes also described an abrupt change in health coverage: the district’s fully insured carrier ceased operations in 2023, prompting the district to move to a self-funded health plan and to pursue other cost-containment measures such as consolidation of some schools and moving some special-education placements into district schools.

To stabilize finances, Hartjes announced a referendum that he described as a four-year measure proposing $15 in tax levy per $100,000 of property value. He gave an example to illustrate the impact: on a $300,000 home, the levy would amount to $45 per year. "We are going to referendum for 4 years," Hartjes said, and added that the district hopes state funding will improve when the period ends and the district re-evaluates its position.

Hartjes also reviewed the district’s prior fiscal position, saying the district once held an $18 million fund balance and that it paid off its 2014 referendum bonds early, which he said saved about $5 million in interest. He said ongoing inflationary pressure and post-pandemic competition for staff made it difficult to fully match pay increases to inflation while retaining employees.

Hartjes closed by saying a forthcoming video will outline additional steps the district has taken to save money.

The district's announcement does not appear in this transcript to include a board vote or a detailed ballot language; Hartjes presents the referendum as the district's chosen next step.