Analysis Brief: Our Assessment of the MPS Referendum

Milwaukee’s vitality hinges on a robust K-12 school ecosystem — and that includes a thriving Milwaukee Public Schools (MPS). However, recent announcements from the School Board paint a daunting picture — a projected budget shortfall exceeding $1.2 billion over the next five years, including a staggering $200 million gap looming for the upcoming school year.

In response, the School Board is urgently seeking voter approval on April 2nd for over a quarter-billion dollars in permanent, new revenues through a property tax increase to address these financial challenges. However, Milwaukee’s students, families, and taxpayers rightfully expect more than an expensive band-aid to our school district’s fiscal and academic crises.

CFC’s Bottom Line

1. The Milwaukee Board of School Directors must go beyond just seeking more funds from Milwaukee families, residents, and taxpayers, and present a well-defined and comprehensive plan for addressing its academic and financial challenges.
2. MPS should outline precisely how the proposed new revenues will be used to directly and dramatically improve academic outcomes for all Milwaukee students.
3. The School Board should also ensure that additional dollars will place the district on a sustainable and stable long-term financial footing, by making the tough choices necessary to adapt to the long-term demographic trends that are driving the district’s structural budget gaps.
4. The referendum, rather than being solely a fiscal decision just for the district, must be viewed as an opportunity for all Milwaukee residents to make a resolute commitment to ensuring high-quality schools are available to every Milwaukee student.

What’s Happening

On Thursday, January 11th, the Milwaukee Board of School Directors made a pivotal decision, placing a referendum for additional funding on the April 2nd ballot. The referendum seeks approval for a $252M permanent increase in local property taxes to support Milwaukee Public Schools (MPS). This referendum comes just four years after a $87M tax increase, approved by 78% of voters in 2020, and which fully phased in for the current (2023–24) school year.

If approved, MPS would see a $140M increase in local funding for next school year, with incremental rises of $51M, $42M, and $14M over the next three years. The full $252M boost would be in effect by the 2027–28 school year, and would continue annually thereafter. The full proposed increase represents a ~15% hike from the district’s FY24 budget, and when combined with the property tax increase approved by city voters in 2020, this referendum would result in a doubling of local property taxes for MPS in less than a decade.

What MPS is Saying: CFC’s Take

MPS officials have offered three primary rationales for why this increase in funding is needed right now:

1. Fiscal Cliff

MPS recently released updated long-term financial projections; these indicate that the district faces a cumulative shortfall of $1.2 billion over the next 5 years.

We agree that MPS faces real fiscal challenges — but we believe MPS has tools at its disposal to address these issues that it has not yet fully utilized.

These challenges are not unique to MPS — peer districts both across Wisconsin and around the country are facing similar circumstances, in particular tied to the end of one-time, COVID recovery funding.

However, MPS’ budget issues have been exacerbated by short-sighted decisions made since its last referendum passed in 2020: rather than utilizing the referendum proceeds, and the more than $700 million in one-time COVID recovery funding MPS received, as a bridge to a right-sized and sustainable budget, the district instead elected to provide subsidies for both staffing underenrolled schools, and for maintaining underutilized school facilities.

2. Inflation

MPS claims that district funding has failed to keep up with inflation, and attributes this to state funding decisions for K12 education during prior budget cycles.

This claim is partially true — but importantly, less true in Milwaukee than in many other parts of the state.

While MPS’ funding from state sources has failed to keep pace with inflation over the past two decades, this is NOT true of the district’s total per-pupil funding.

In 2023–24, including both the $325/pupil increases in the state budget and the full impact of the district’s 2020 referendum, MPS’ per-pupil revenues are about $300 higher than their inflation-adjusted levels from 2004.

Put differently, while MPS’ funding mix has changed (relatively fewer state dollars, relatively more local ones), MPS’ overall funding on a per-pupil basis no longer trails either state averages or inflation-adjusted funding levels

MPS was about $175 behind the state average per-pupil funding in 2004; this year, the district is now more than $750 AHEAD of the state average.

3. Special Education

MPS asserts that the state has failed to adequately fund special education for public schools, with a reimbursement rate that’s amongst the lowest in the country.

We agree with the district on this point: CFC has joined MPS and a broad coalition of local stakeholders in advocating for increases in the special education reimbursement rate at the state level to benefit all public school students, including Milwaukee students attending both MPS district-run and public charter schools.

We are concerned, however, that the proposed referendum will not provide funding to Milwaukee students with disabilities, who do not attend MPS district-operated schools.

We continue to believe the issue of special education funding needs to be addressed statewide, and in a manner that ensures that all public school students with disabilities have access to the resources they need to thrive.

What’s Missing in the Conversation

The proposed referendum reflects a complex financial landscape for MPS. While it seeks to address the district’s funding shortfalls, concerns about the impact on academic outcomes, the fiscal sustainability of MPS, and the exclusion of some students from the benefits raise crucial questions for voters to consider.

• Unacceptable Academic Outcomes: Milwaukee’s students continue to be in academic crisis — and this includes the nearly 60,000 students that attend MPS-operated schools. Last year, just 9.9% of students in schools operated by MPS performed on grade level in Math, and just 15.9% were on grade level in Reading. According to NAEP, the Nation’s Report Card, performance for Black students in Milwaukee’s public schools remains the lowest in the nation. The district has not made clear how an additional quarter-billion in new funding will be used to improve the dire educational realities facing MPS students.
• Tens of Thousands of Students Left Out: This year, more than 45% of Milwaukee’s publicly-funded students attend schools not operated by MPS. If successful, none of the referendum funding would benefit these students — meaning 100 percent of Milwaukee’s taxpayers will pay increased rates, but schools serving only 53% of Milwaukee’s K12 students will receive additional funding. MPS should be clear about which students will benefit from referendum funding — and ensure that no Milwaukee students are left out.
• Changing Citywide Demographics: Citywide, Milwaukee schools are serving 20% fewer students than they did a decade ago — yet, MPS is still operating nearly the same number of schools, and has increased its spending on staffing beyond the rate of inflation, over this time period. While the district’s strategic plan includes right-sizing as a priority, there are scant details on how the district intends to respond to our city’s long-term declines in K12 student enrollment. MPS needs to join schools across the city in adapting to these new realities.
• Insufficient Public Engagement: The initial announcement of MPS’ plans to place a referendum on the ballot were made on the Friday before Christmas, and the vote was taken just three weeks later (including two federal holidays in the interim). The district’s Referendum website includes scant details on the proposed use of funds, and the district’s self-reported results on a survey of public support for a referendum indicate more than one-third of responses came from district employees. None of this engagement meets the standard the district set when it last sought a referendum in 2020.
• Quarter of A Billion Dollars Still Isn’t Enough: According to the district’s own analysis, if successful, the referendum would reduce — but still not fully eliminate — MPS’ projected future budget deficits. The district cannot afford to continue to kick the can down the road, and Milwaukee’s families, residents, and taxpayers can’t be asked to foot an ever-increasing bill without a plan to get the district’s revenues and expenses in balance.

Over the past five years, MPS has seen cumulative funding increases approaching $1 billion dollars — four years of enhanced local revenues because of the 2020 referendum, $712 million over three rounds of COVID recovery funding, and per-pupil increases in state funding in the current school year thanks to the bipartisan education funding agreement in the most recent state budget.

Yet, for all of these additional resources, the district’s academic and financial outcomes have remained stagnant and even deteriorated — and not just because of the pandemic. The evidence is clear: more money alone will not fix the challenges facing MPS, its schools, and most importantly, the students and families they serve. As the district again comes to voters to request another tax increase, MPS needs to explain how these additional resources will yield significant improvement in student achievement — because Milwaukee’s students and families both demand and deserve more.