Weekly Fiscal Facts are provided to Wisconsin Newspaper Association members by the Wisconsin Policy Forum, the state’s leading resource for nonpartisan state and local government research and civic education. The Wisconsin Policy Forum logo can be downloaded here.
A $51 million revenue infusion, made possible by voter approval of a 2024 referendum, has substantially brightened the short-term fiscal outlook for Milwaukee Public Schools (MPS). The proposal for the district’s next budget largely avoids staffing cuts and makes new investments in areas including lead paint stabilization and other facilities maintenance.
Approval of the referendum authorized the district to exceed state revenue limits, including by increasing property taxes if necessary, resulting in $51 million in additional revenue authority above state-imposed caps in 2026 alone. Yet MPS anticipates only a modest increase to its property tax levy next year because of increased state aid.
Still, a recent Wisconsin Policy Forum analysis found that the district faces many impending fiscal challenges, including potential federal funding cuts and continued reliance on savings from hundreds of vacant positions. And looking ahead, a growing structural budget deficit could reach $57 million by 2030 as the referendum is fully phased in and no longer delivers additional revenue.
Indeed, MPS’ new superintendent Brenda Cassellius inherits a daunting array of challenges. Chief among them: improving student outcomes in a district where test scores reveal alarmingly low levels of proficiency in math and reading, and lag most other large urban districts nationally.
The new budget proposes a $61.7 million (4.1%) increase in total expenditures. Slightly more than half of that is linked to increases in salary and wage expenditures, including a proposed 2.95% cost-of-living adjustment (COLA) for all staff. The budget also includes a reorganization of certain central offices and adds staff for certain centrally supported school supports.
A key feature of the 2026 proposed budget, as in the previous two years, is that it finds considerable savings through adjustments for vacant positions. In the 2026 proposal, savings of $75.9 million are budgeted for vacancy and turnover — an increase of $1.6 million from the so-called “vacancy adjustment” in the 2025 budget. While use of this practice is commonplace among local governments in Milwaukee, MPS has used it much more extensively.
The district’s annual property tax levy is influenced heavily by the aid amount it receives from the state, and this year, an estimated $72.5 million increase in state general school aids helps limit the district’s property tax levy increase. Given the significant amount of new revenue authority from the referendum – and other recent tax increases imposed on Milwaukeeans — this relatively modest overall levy increase will be welcome news for many taxpayers. The projection and the proposed levy also may change, however, when the district receives its final state aid amounts in the fall.
While the 2024 referendum significantly eased pressure on next year’s MPS budget, the district’s five-year budget forecast confirms its structural challenges will still build over time. Following the expiration of the four-year phase-in period for the referendum, the district’s structural budget gap between revenues and expenditures is expected to increase to $57 million by 2030.
The threat of federal funding cuts and the unfinished state budget also leave considerable uncertainty about the next two years for the district. And in the years to follow, MPS’ structural deficit is almost certain to grow without much more extensive fiscal and organizational change.
This information is provided to Wisconsin Newspaper Association members as a service of the Wisconsin Policy Forum, the state’s leading resource for nonpartisan state and local government research and civic education. Learn more at wispolicyforum.org.
