District faces deficit but is optimistic about future

The Grafton School District is not immune to the budget difficulties affecting neighboring districts — including rising health care costs and inflation — but is nonetheless “optimistic” as enrollment continues to increase, Business Manager Topher Adams said.

Last week, the School Board approved a preliminary budget for the 2024-25 school year that includes a 3.3% increase in district expenditures and a 4.8% increase in district revenues, resulting in a $30,837 deficit that is considerably smaller than last year’s shortfall.

The actual deficit will likely be in the six-figure range, Adams said, because the budget only uses a “placeholder” estimate for raises.

That estimate is an average of 2.34%, he said.

“Inflation has caused a lot of upward pressure on salaries,” Adams said. “Our biggest expense is people.”

Adams said the district’s central challenge is “getting funding that matches inflation.”

The district has no plans for an operational tax referendum in the near future, unlike many other Wisconsin school districts, Adams said.

“We are fortunate we don’t need an operational referendum,” he said, noting the district’s budget doesn’t rely on pandemic-era federal relief funds.

“Those were spent years ago,” he said.

In April, 62 Wisconsin school districts asked voters to approve a levy limit increase, according to press reports. Over the last three years, more than 150 districts have held that type of referendum.

The primary way districts are funded, the state-set per pupil revenue limit, has not kept up with rising costs, Adams said. When accounting for inflation, Grafton gets $3,380 less per student than 15 years ago.

The combination of a $325 per student revenue limit increase — adding $657,000 to the budget— and the addition of 29 students to the district’s three-year enrollment average — adding $325,000 — means this year’s deficit will be far less than the $422,000 shortfall it faced last year, Adams said.

More students are expected to enroll as the village continues to grow, Adams said, which is a net positive for the district.

“More students can mean more staff but it helps you deal with fixed costs,” Adams said, including utility, maintenance and property insurance costs.

The district’s levy for the private school voucher program increased by $152,000, according to the budget, bringing the program’s total levy to nearly $1 million.

“There’s a big jump in the amount we are paying for the private school levy,” Adams said.

The increased levy, he said, was not due to increased participation in the program that allows eligible students to attend private instead of public schools, but due to increased per pupil rates.

Depending on the voucher, those increases ran from about $1,500 to $3,400, according to the budget.

For the district, the voucher levy is mostly a “wash from a budget perspective,” Adams said.

At the same meeting, $469,500 from the fund balance was designated for a transfer to the capital projects fund, which will help maximize state aid for the 2025-26 school year, Adams said.

Any deficit in the final budget will come out of the district’s nearly $6 million fund balance.

In April, voters approved an $11.14 million referendum for a John Long Middle School addition to house fifth-grade classes and relieve overcrowding at elementary schools.

A $39.9 million referendum approved by voters in 2017 funded improvements across district schools.

The budget also included a 15% increase in the custodial service, a 10% increase in district health care contributions and a 3% increase in the utility budgets, along with a $110,000 increase in the transportation budget.

The equivalent of 4.1 additional full-time teachers are funded by the budget.

After receiving final budget numbers from the state in October, the board will finalize the budget.