MPS committee hears five‑year forecast showing steep enrollment declines and a multi‑year budget gap

The Milwaukee School District's committee on strategic planning and budget on Jan. 27 reviewed a five‑year financial forecast and a set of FY27 budget planning priorities that officials said will be necessary to address structural fiscal imbalance.

Matt Chase from the Office of Accountability and Efficiency walked the committee through assumptions baked into the forecast: a state per‑pupil lift of $325, inclusion of a full cost‑of‑living adjustment of 2.63% and steps/lanes in FY27, a vacancy adjustment of $20,000,000, and healthcare inflation scenarios provided by the district's actuarial vendor. The forecast accounts for the departure of several charter campuses and projects a short‑term revenue bump in FY27 due to the referendum phase‑in and enrollment averaging rules, but forecasts deficits beginning in FY28 that grow to a cumulative five‑year shortfall of roughly $420,000,000 under current assumptions.

Key financial figures cited during the presentation included a projected FY27 surplus of about $20,000,000 (driven by referendum phase‑in and some one‑time adjustments) and longer‑term structural risks that could produce annual deficits of about $60,000,000 in FY29 and more than $200,000,000 by FY31 if enrollment trends continue and no additional revenue is authorized by the state.

Administration framed FY27 budget priorities around protecting classrooms (class‑size caps of 28 in elementary — smaller in early grades — and 32 in middle school), maintaining teaching positions except where enrollment declines require reductions, investing in staff compensation (negotiations for up to full CPI, 2.63% plus steps and lanes), and restoring fiscal health by reviewing contracts and central office spending. The budget team said they would seek to buy down vacancy adjustments and pursue operational savings, while planning a prioritized staffing cycle that will target 19 hard‑to‑staff schools for recruitment and early contracts with local colleges.

Public commenters, union leaders and board members voiced concern about equity and the potential distributional effects of cuts. Ingrid Walker Henry (MTEA) and Angela Harris called for explicit equity impact analyses and for protecting high‑need schools from bearing disproportionate harm. Will Fitzgerald criticized what he called a lack of transparency around audits and the $46,000,000 shortfall.

Administration responded that the forecast includes the full COLA and steps in FY27 and does not alter the existing health‑benefit plan design; Superintendent Brenda Casella described a multi‑pronged approach that includes reducing central contracts, targeted hiring strategies, and investments to improve school quality and enrollment.

Committee action: The committee voted unanimously, 8‑0, to approve proposed FY26‑27 budget parameters and priorities and to adopt the FY26‑27 budget development timetable (items 7 and 8). Administration said it will present corrective options to address the current $46,000,000 imbalance and return with detailed proposals for the board's review.

What happens next: Administration will continue contract reviews, implement a priority staffing cycle for 19 schools, present an enrollment strategy and share weekly staffing KPIs during the recruitment cycle. The committee expects to review detailed budget options in coming months.