Damakant Jayshi
Declining enrollment, state revenue limits and other challenges could push the Wausau School District’s multi-million dollar deficit even further, officials acknowledge.
Though a look at district budgets over the past three years show deficits as a recurring theme, the amount skyrocketed from about $1.53 million in 2020-2021 to an estimated $3.5 million for the upcoming school year – a spike of about $2 million.
How the district reached this point is complicated, say school officials, who lay the blame primarily on static revenue limits that the Wisconsin Legislature has placed on public schools. Officials say the limits haven’t kept up with inflation.
Another central reason is declining enrollment, a state-wide phenomenon.
A 2023 report from Wisconsin Policy Forum, a nonprofit research organization, attributes the decline in part to falling birth rates, an increase in the number of parents moving their students to private schools or homeschooling options, accounting for nearly two-thirds of the decline.
“PreK-12 enrollment in Wisconsin’s public schools plummeted in the 2020-21 school year by over 25,000 students, or 2.9%, the largest single-year decline in at least 35 years,” the report notes.
Among the options district officials are now considering is a potential operational referendum to raise the revenue limit – like other districts in the state – to meet operating expenses and avoid difficult staff cuts.
That means residents of the district spread across the Wausau metropolitan area will soon get to weigh in on the proposal. The Wausau School Board has already approved seeking input from the community through a survey on a potential referendum to exceed revenue limits to balance the budget and to pay for teacher and staff salary hikes and other related costs.
Wausau School District Communications Coordinator Diana White told Wausau Pilot & Review that another bump in the road is coming. A federal grant program created during the pandemic, the Elementary and Secondary School emergency Relief funding, is coming to an end. White said that is “creating a fiscal cliff and additional challenges for districts across the nation.”
The ESSER funds were meant to help students who suffered learning losses caused by school closures during the pandemic, but Wisconsin’s Republican-controlled Legislature counted federal dollars as state funding and passed a budget with a zero-dollar increase in per-pupil aid for students for the next two years.
Deficit numbers presented during school board’s meeting in March reflect current staffing and a 3% salary raise, while $1.2 million is related to positions added in response to the ESSER program. The numbers also include a carryover deficit of $716,000 from 2023-24; an additional projected deficit of $1.5 for the 2024-25 school year; and “compounding effects of current budget actions.”
The district is now resorting to layoffs and seeking more money through an operational referendum in November.
WSD not along in seeking money through referendums
The Wausau School District is not alone in facing such budget shortfall, nor resorting to raise money through referendums, capital or operational.
According to research organization Forward Analytics, “since the state school revenue limit law was created in 1993, 356 school districts have gone to referendum asking voters for permission to exceed the limits for operating expenditures.” The vast majority of those districts used the referendum option multiple times.
“The result is that in 2023, $650 million of K-12 public school revenues were local dollars approved by referendum. That amount was more than 5% of total school revenues and more than the $517 million the state’s 421 public school districts collected in state special education aid.”
This year Wisconsin saw close to 100 school districts opting for a referendum route to raise money.
The Wisconsin Association of School Boards stated that there were 93 local school district referendums on the ballot in 86 districts for the April 2 local elections in the state. Forty-three of those referendums were a temporary request to raise the revenue limit, 20 of them sought permanent authority to increase the revenue limit, and 30 were borrowing referendums – asking voters’ approval to issue bonds for major construction, remodeling, or maintenance projects for school facilities. The Wisconsin Policy Forum noted that the number of referendums on the April ballot was higher, at 103.
Voters approved just 62 of those referendums, or about 60% of the total.
The Wausau School District is counting on a potential operational referendum to cover for operating costs, like staff salaries and related expenses. The results of the survey are expected to be finalized in June. If the response rate is in favor of holding the referendum, it will be on the ballot in November.
