Rescue boat gets $100K makeover

Port Washington-Saukville School District officials who erased a $1.2 million deficit and balanced the 2025-26 budget with spending cuts that included controversial staff reductions on Monday railed against state legislators for “screwing” the district and local taxpayers with a K-12 education plan approved by a key committee last week.

The Republican spending plan that passed through the Joint Committee on Finance, in fact, sets the district up for another deficit and leaves residents facing a tax hike, administrators told the Finance and Human Resources Committee during a review of the preliminary 2025-26 budget.

“I think we need to start communicating to the public the reality of what’s going on,” School Board member Karen Krainz said. “People don’t understand how the funding works. These are the voters who are voting for the legislators who are screwing us.

“It’s so wrong. We just keep getting left behind.”

The Republican-controlled state budget committee voted 12-4 along party lines June 12 to increase reimbursement for special education costs but at a rate significantly lower than recommended by Gov. Tony Evers, the Department of Public Instruction and public school districts throughout the state.

Under the Republican proposal, special education reimbursement would increase from about 30% to 35% in the first year of the biennial budget and 37.5% in the second year. Evers and school districts lobbied for a 60% reimbursement rate to help the growing number of school systems that are struggling financially at a time when the state has a more than $4 billion surplus.

“DPI was advocating early on for 90% special education reimbursement and was laughed at,” Supt. Michael McMahon said. “We were asking for 60%. I received a really positive response from the legislators I met with, and this is the result of that — 2% to 3% (increase in the reimbursement rate).”

The Republican plan does include 90% reimbursement for high-cost special education, but only about 3% of special education students in half the districts in the state fall into that category.

The 90% reimbursement for high-cost special education will do very little to help the district, McMahon said, noting that only one of its students fall into this category.

“These are not spendable dollars,” he said. “This is not what we asked for.

“It’s disappointing what we saw last week.” 

Special education costs the district about $6.2 million annually. Of that amount, 33.2%, or $1.9 million, is reimbursed by the state. The district must transfer the remaining $4.3 million from its general fund to make up the balance.

District officials had hoped for a meaningful increase in reimbursement as they grappled with one of its largest deficits in years to balance the budget for the 2025-26 school year, which begins on July 1, but the Republican education plan would provide little additional money, they said.

The proposed total increase in general  and high-cost special education reimbursements will result in the district receiving about $134,000 more from the state, decreasing its transfer from the general fund for special education from $4.3 million to $4.2 million, Director of Business Services and Human Resources Mel Nettesheim said.

“If I’m staying neutral on this, we’re very appreciative of the special education reimbursement increase, but truthfully it’s not enough; it’s not enough to offset the more than $4.5 million transfer we have to make from our general fund to special education,” she said. “And it doesn’t come close to making sure our students get what they deserve — all our students.”

Compounding the challenges the district faces, the Republican plan includes no increase in general school aid, which means that local taxpayers, not the state, will pay for an allowable spending increase of $325 per student.

The shift in tax burden will come as the impact of the $59.4 million referendum approved by voters in April to pay for a new Saukville Elementary School and maintenance projects throughout the district hits tax bills in December, and School Board members are concerned that a higher-than-advertised tax increase will leave voters thinking they were duped.

The district promised voters that the referendum would add 26 cents per $1,000 of equalized value — $78 for the owner of a $300,000 home — and that is exactly what the referendum borrowing will cost taxpayers in the 2025-26 school year, Nettesheim said.

The school tax rate, however, is estimated to increase by three cents more than that, to 29 cents per $1,000 of equalized valuation, because of the shift in school funding from the state to local taxpayers, although the final tax rate won’t be set until the School Board approves the levy in October.

School officials are also troubled by the fact that while many of the changes made to balance the 2025-26 budget, which included streamlining the district’s staff as enrollment continues to decrease as well as pay scale and retirement benefit changes, were designed to put the district in a stronger financial position beyond next school year, the Republican education plan sets it up for another deficit for the 2026-27 school year, they said.

The district gave all its employee groups a 2.95% pay increase tied to the Consumer Price Index — essentially a cost of living increase — for the 2025-26 school year, and is committed to similar raises in future years, but without increases in state funding it won’t be able to do that for the 2026-27 school year without cutting other spending, Nettesheim said.

“There’s a zero-dollar change to the (state) revenues coming in for this year and next year as it stands now,” she said. “So if we’re going to give a CPI increase, we are going to be deficit spending again.”

School Board members said that makes it incumbent upon the district to explain to taxpayers why it is struggling to make ends meet.

“Just to be very clear, this is not us not being good stewards of taxpayer funds,” board member Kierstin Cira said. “It is our state Legislature that continues to tell public schools they need to do more with less.

“I think taxpayers need to hear that so they understand we haven’t pulled the wool over anyone’s eyes. We are doing quite well considering the position the legislators of our state continue to put public schools in.”

The board will hold a hearing on the budget and be asked to approve the preliminary spending plan at 6 p.m. Monday, June 23. The final budget is approved in October.