Milwaukee Public Schools Unanimously Passes $1.5 Billion Budget
13 schools could close, merge as part of long-range facilities plan.
Charles Edward Miller (CC-BY-SA)
The Milwaukee Public Schools board of directors unanimously approved its 2024-25 budget Tuesday night, the plan incorporating a $43 million state penalty related to financial mismanagement uncovered in the spring.
MPS passed a preliminary $1.5 billion budget in June but had to make adjustments based on how much state aid the district will receive.
District leaders knew the the school system was facing a deficit. Now that all of the numbers have been calculated, district officials said Tuesday, the true budget shortfall is just under $10 million.
Rather than calling for a bump in the tax levy, district officials said they will offset the deficit by pulling from the community service fund.
“The Milwaukee Board of School Directors has structured its budget to maintain the commitment made to the public to not increase the property taxes beyond what was authorized by the 2024 referendum and passed in the Superintendent’s proposed budget in June,” the district announced.
Passage of the referendum meant a $432 tax increase for the owner of a $200,000 home.
The total MPS total tax levy is $414.8 million this year, up about 30 percent from December 2023 when the levy was $320.2 million.
Accounting errors covered by community service fund
The state deducted $42.6 million in state aid from its payment to the district in September due to district reporting errors in the 2022-23 school year.
General school aids are part of a complex school district budgeting formula that also includes property taxes and federal dollars.
MPS learned Oct. 15 it will receive about 7.7 percent less in general state aid this year. The total amount the district will receive is $587.1 million, or about 40 percent of the district’s budget.
In April, voters narrowly approved a $252 million referendum.
While the referendum will bring an additional $140 million into the district this year, MPS started the year with a $200 million budget shortfall.
The budget approved in June included a reduction of about 288 staff positions.
One month after the $252 million referendum passed, Milwaukee residents learned MPS had not submitted financial data to the state. The result was the resignation or firing of administrators, including Superintendent Keith P. Posley. A corrective action plan was created, revealing an inexperienced, understaffed financial office and an outdated accounting system.
After news of the financial mismanagement came to light, some taxpayers have expressed anger and resentment over approving the referendum.
To avoid having to again hike property taxes to offset the $10 million budget hole, MPS officials are tapping into the district’s community service fund.
The district will move about $11 million from that fund into its general operating fund.
Doing so will have no impact on taxpayers, according to the district.
Taxpayers are affected, just differently
While moving money from the community service fund into the general operating fund will patch a budget hole this year, the money in the fund is partially generated from property taxes.
Last fall, while considering the district’s final budget for the 2024 school year, the MPS Board of School Directors voted to increase the district’s community fund levy by $77.7 million — from $34.7 million to $112.4 million, according to a report by the Wisconsin Policy Forum.
On Tuesday, MPS officials said the community service fund has a balance of about $100 million.
MPS officials told the Policy Forum last year that over $40 million of the community fund would be spent on a new recreation community center and aquatic facility at the former Browning School and Browning Playfield. The center has been in the planning stages since 2018.
The district had previously considered issuing debt for the project but said in the spring of 2024 that the district would pay cash to avoid interest costs. The remaining money in the fund was to be used to address a backlog of repair needs for other MPS-owned recreational facilities, district officials said at the time.
City of Milwaukee officials said Tuesday they have never been included on planning for the recreation community center and aquatic facility, even though the site is city-owned property.
“The mayor’s office has not been consulted on this project,” said Jeremy McGovern, spokesman for the Department of Neighborhood Services. “Work cannot begin until they apply for appropriate permits.”
13 schools could close, merge as part of long-range facilities plan
The board also discussed at length a preliminary long-range facilities plan for the district. The 10-year plan is the result of community meetings held over the last several months.
The school district can’t afford to keep its 149 school buildings open, while student enrollment continues to decline.
The outside consultant’s report was released Friday. It divided schools into multiple categories including buildings that could be expanded, merged or closed.
Thirteen schools, located mostly on the city’s north side, are candidates for possible closure or merger.
According to the district, the schools are less than 50 percent full, have experienced declining enrollment over the last five years, and are less than one mile from another under-enrolled school.
No schools will be closed or merged this year, nor during the 2025-26 school year.
Milwaukee Public Schools passes $1.5B budget was originally published by Wisconsin Public Radio.
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Time to pull the plug on this district and dismantle the systemic racism that keeps our poor children of color in failing schools.