MPS budget preview: Referendum dollars buy time, but tough decisions to come after this year

MILWAUKEE (CBS 58) -- On Thursday night, Milwaukee Public Schools (MPS) Superintendent Brenda Cassellius will present her first budget since taking over as the beleaguered district's top official in March. Both she and an outside analyst say while this budget process had its challenges, future years project to be even more difficult.

Cassellius will propose a $1.55 billion budget for the 2025-26 year. MPS actually has a larger budget than Milwaukee County, which is operating on a $1.4 billion plan. 

Cassellius vowed to produce a budget that's easier to digest, and MPS has released a 47-page budget summary that accounts for all of the proposed spending items.

One shift that is noticeable in Cassellius' first budget is moving some spending decisions away from individual schools and making them out of central office. In an interview this week, she pointed to the district's ongoing lead crisis as a reason to make more facilities decisions centrally.

"Principals were faced with a choice of painting a wall or hiring a paraprofessional," Cassellius said. "And so, I think that will get solved when we centralize budgets and we start doing work orders and managing facilities at the central office more so than at the school level."

Cassellius noted that shift will continue in future budgets as she gets a better understanding of MPS' inner workings. She added future budgets will also come with more difficult challenges, starting with the 2026-27 budget.

"I want to be real transparent with the public that next year is gonna be a really hard year for us," Cassellius said. "We are gonna have to make budget cuts if, in fact, we don't see new revenues from the state Legislature that are keeping pace with what our students need."

Rob Henken, the immediate past president of the nonpartisan Wisconsin Policy Forum, said he had a briefing with officials in MPS' finance office on Wednesday. He said the $252 million referendum voters narrowly passed in the spring of 2024 will provide a bit of a breather this year.

The money from that referendum will spread out over four years. MPS used $140 million of it last year, and it will use $51 million in this year's proposed budget. That would leave $61 million over the final two years.

"That helps ease the pain of some of the structural difficulties that MPS has perennially faced," Henken said.

Those perennial challenges include declining enrollment and questions over whether MPS has more buildings than it currently needs given that trend. Inevitably, Henken said it will lead to tough decisions.

"Fiscal realities dictate that there is going to have to be a reduction in workforce at some point," he said.

Henken added the district is relying on more than $70 million in savings from vacant jobs going unfilled. He noted much of that may have to do with difficulties in finding workers many districts are having, but he noted if MPS ever pushed to fill many of those jobs, it would create another set of tough decisions.

"If, by some chance, MPS were ever able to fill all of its vacant positions, it would have to do some severe cutting in other areas to be able to afford to do so," he said.

Cassellius has already announced a pair of significant staffing shifts. She's proposed a reorganization of the leadership structure in central office, which the board approved in short order, and she also is pushing to move 40 teachers currently in specialist roles to cover shortages in full-time classroom positions. 

The teachers union has criticized the manner of moving those teachers, as they feel it is disrespectful to make 180 such teachers reapply for their jobs before choosing 40 who will go back into the classroom full-time.

Looking ahead, Cassellius and superintendents across the state are calling on the GOP-controlled Legislature to increase the special education reimbursement rate to a level much higher than the current 33%, which Henken said is actually 29% in MPS' case.

The current proposed budget would provide about $23,000 per student, which is at the top of Milwaukee County districts. However, Milwaukee also has a disproportionately high level of kids either living in poverty or with special needs.

While additional funding would help, declining birth rates also mean enrollments are projected to keep declining. That will lead to less state aid, putting more of a crunch on future budgets.

"The challenge is to what extent can staffing and can facilities and other parts of the organization respond to that by downsizing?" Henken said.