MPS Referendum Would Reverse Effects of Declining State Funding

Bay View High School. File photo by Carl Baehr.

The $252 million school funding referendum heading for Milwaukee ballots this spring could reverse the current trend of declining funding and fill a $200 million budget gap.

The story told in a new report by the Wisconsin Policy Forum is a familiar one for public institutions during the past decade. That is, the state funding for education has been lagging behind inflation, putting Milwaukee Public Schools further and further behind the budgetary eight ball.

Compounding the familiar problem of poor state funding is what the policy forum calls the “single biggest reason” for MPS’ revenue declines: “the district’s loss of enrollment due to demographic shifts, competition from independent charter and state-funded voucher schools, and other factors.”

If the voters approve the referendum, MPS will escape its downward revenue spiral. But because of long-term underfunding it still won’t have the purchasing power it had two decades ago, according to the report, titled “The ABCs of the 2024 MPS Referendum.”

With state funding falling behind inflation, the district has fewer dollars, in real terms, to educate students. The state is also providing less funding for special education than it has in the past, forcing MPS — which has the highest percentage of students with disabilities in the state — to pull funding from its general operating revenues to cover the difference.

In 2020, when MPS went to the voters with an $87 million referendum, the hope was that this funding would fill its projected budget gaps. But, as the policy forum notes, “What district leaders could not have predicted was the surge in the rate of inflation, which both reduced the purchasing power of the $87 million and led them to provide matching cost-of-living salary adjustments for staff.”

Between 2004 and 2024, MPS has lost nearly one-third (31.5%) of its enrollment. These declines have impacted the per-pupil revenue from the state, contributing to declining funding, but they also raise questions among opponents of the referendum, according to the report. Namely, has the district downsized it’s staffing and facilities in response to declining enrollment? And if not, why?

The policy forum notes that not all costs can be reduced proportionally to declining enrollment, and that considerations about class sizes, educational offerings and the impacts on children and families must be considered when it comes to staffing and building reductions.

The district has only reduced its facilities by 3.2% from the peak in 2008. But its staffing has actually outpaced enrollment loss, declining 36.8% since 2004. The district still maintains a number of unfilled positions in the budget, contributing to millions in operational savings and recent end-of-year budget surpluses.

Budget projections by MPS that show it filling hundreds of these vacant positions in the coming years is the largest contribution ($45.1 million) to the projected $200 million budget deficit.

“Filling and sustaining these positions may be defensible in many respects, but it is difficult to assess their need without the benefit of an overall staffing plan for the district that takes into account its reduced enrollment and the realities of today’s labor market,” the report states.

As voters consider the referendum, the policy forum said “compelling arguments” can be made both for and against the referendum; with supporters able to argue that, despite declining enrollment, there is less money to spend on students education than in the past, and opponents able to raise questions about the districts’ response to declining enrollment in terms of staffing and facilities.

“In the end,” the report concludes, “voters have a lot to consider.”

Read the full report The ABCs of the 2024 MPS Referendum on Urban Milwaukee.