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.
Milwaukee Public Schools has proposed a 2027 budget that would tackle some immediate challenges and balance its books for now. But it would still leave the district facing an ominous long-term outlook, the Wisconsin Policy Forum’s annual review of district finances finds.
Following a series of position cuts necessitated by the discovery of a negative $45.6 million balance in the district’s main fund, Superintendent Brenda Cassellius has proposed a 2027 budget that balances spending and revenues, while boosting teacher salaries and adding teachers and aides.
But the district’s five-year forecast projects a structural deficit for its main fund emerging as soon as 2028. Left unchecked, spending is projected to outpace revenues by $63.7 million by 2029, budget documents show.
One notable move in the 2027 proposed Milwaukee Public Schools (MPS) budget is the net addition of 574.3 FTEs, primarily teachers and paraprofessionals, in a bid to reduce class sizes. In 2027, the district can afford these payroll additions. But it could add to budget crunches in later years, when revenues are projected to struggle to keep up with an overall proposed 8.2% salary increase created both by the new FTEs and staff raises.
The district also is poised to lose a longstanding financial cushion in the form of nine departing charter and alternative schools. As we explain in the report, this will provide a short-term fiscal boost for MPS, but a long-term hit to the district’s revenues and bottom line. All this comes in addition to state laws that limit the ability of all Wisconsin districts to raise enough revenue to match inflation.
These factors, as well as aging school buildings and declining student enrollment, will exert ongoing pressure on future MPS budgets. Without a substantial infusion of new revenue, they may force future cuts that undermine the very investments proposed in this year’s budget.
The 2025 financial statements revealed that MPS faced a negative balance of $45.6 million in its main fund, and district officials moved forward with hundreds of layoffs to lower spending. MPS leaders say that new financial controls and strengthened accounting practices should guard against similar issues in the future.
Forum research also reveals the original problem was larger than previously understood. The statements show the district spent a total of $70.4 million more out of four major funds than the funds received in revenue. To some degree, the overspending reflected legitimate pressures such as the discovery of lead poisoning cases among four MPS students. Ultimately, the district was able to continue to pay its ongoing costs because its operating funds are pooled with city of Milwaukee funds — an unusual arrangement not used by other school districts or cities in Wisconsin.
The report concludes that MPS has many challenges to overcome. Some were imposed from the outside; others were of its own making. The report suggests some potential options for district leaders to consider to reduce its impending budget shortfall.
“Families, teachers, residents, and investors need to have confidence in the district’s ability to meet these coming challenges, or MPS will find it harder to maintain and attract the necessary enrollment, staff, and capital financing to accomplish its crucial mission,” the report concludes.
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.
