Madison school board remains unclear on how it will spend referendum dollars, but passes 2 budgets – Madison.com

Required by state law to adopt a final 2024-25 budget before the end of October, the board adopted two different budgets Monday night — one that assumes the $100 million operating referendum succeeds on Nov. 5, and another that which assumes that the measure has failed. A $507 million facilities referendum is also up for approval next week.

Pressured by past spending decisions, state funding that has failed to keep up with inflation and the loss of pandemic relief dollars, the district has balanced its budget by tapping into reserves over the past few school years. Regardless of the outcome of the referendum, the district will continue to use reserves to fund operations.

Superintendent Joe Gothard, who started in mid-May, came into the district when budget and referendum planning was already underway.

“We’re spending more revenue than we need to spend, so we’re going to spend one-time (reserve) funds…” Gothard said Monday. “We have a lot of work to do. Regardless of the result next Tuesday, we need to have some strategic direction.

Nearly half of Wisconsin’s more than 400 school districts have asked voters to approve local funding increases in 2024.

If voters approve the $100 million operating referendum next month, spending in the 2024-25 school year would total about $608.5 million.

Revenues will increase by $30 million as a result of the current referendum to total $583.1 million. The district still plans to draw about $25.7 million from its fund balance in this budget plan.

For homeowners, a successful act referendum will mean higher property taxes forever. If voters approve the funding request, taxes would increase by about $41 in the first year, $632 in the second year, $841 in the third year and $1,049 in the fourth year for the owners of the median home in Madison, assessed at $457,300. Taxes will remain at this higher level forever.

For the $507 million capital referendum, homeowners will pay about $324 a year starting in 2025 for the next 23 years.

But with Election Day a week away, the county has yet to share a detailed spending plan for the $100 million operational referendum.

About $7 million will pay for an additional 2.06 percent raise for district teachers and staff. The school board has already approved a separate 2.06 percent pay increase that goes into effect regardless of the outcome of the current referendum. The total increase of 4.12 percent will cost about $14 million in 2024-25. The school board has also authorized regular salary increases awarded based on years of experience and education level.

In addition to these salary increases, the remainder of the referendum’s operating dollars will be used to pay current expenses for the time being. No new staff or programs will be added to schools this year using referendum dollars, according to budget materials.

Assistant Superintendent of Financial Services Bob Soldner previously told the Wisconsin State Journal that the county would spend referendum operating dollars on expansions to 4K, career exploration and multilingual opportunities.

Board member Ali Muldrow said those expansions are still planned, but the district first wants to prioritize higher salaries for staff and address its budget deficit.

“If we build great schools and buy great curriculum but don’t have great teachers, that’s not an effective strategy,” Muldrow said.

Muldrow said the district and school board also kept the exact spending plans vague to account for uncertainty around public school funding and the economy, saying “there’s a little bit of caution about committing in a really precise way at this point.”

Future changes in student enrollment will affect the district’s revenue, along with any increases in state funding approved under the 2025-27 biennium budget. Muldrow said the additional funding could cause the district to end up levying less than the full $100 million it is seeking.

“I think the board wants to be able to ease the burden on local taxpayers and not tax to the full extent of our authority if we’re in a good position to do that,” Muldrow said.

The county’s spending plan for the $507 million facilities referendum is much clearer. This money will pay for the construction of 10 new schools and the renovation of two others. District officials have identified priority projects and released cost estimates for each location.

If the $100 million operating referendum fails next month, the district will spend slightly less, totaling $601.5 million this school year.

If the referendum fails, the district would still spend about $10 million more this school year than in 2023-24. The increased spending partly reflects the addition of more than 100 full-time positions since last school year. Most of the additions are at the classroom level, with more teachers and educational assistants being added back to schools to reduce class sizes, along with more mental health staff.

Since without the referendum, the money flowing into the district would be $552.7 million, the district would have to balance its budget by using about $49 million from reserves.

However, this is a one-time decision that the district cannot afford to make far beyond this school year. These sustained costs, regardless of the outcome of the operating proposal, point the school district toward significant budget cuts in the 2025-26 school year for programming and staffing. If the operating and capital referenda fail, property taxes for the average home in Madison would drop by about $278 because the school district gets more state intelligence. In 2025, owners of a home assessed at $457,300 would pay $3,878 in taxes to the school district. In 2024, when the same home was assessed at $424,400, residents paid about $4,156.