Frequently Asked Questions

A: Despite our legislative advocacy efforts and what was touted as a historic state biennial budget year for public school districts across the state of Wisconsin, MTSD does not stand to benefit substantially from state funding as a lower-spending, property-rich community. “Property-rich” means that the state perceives our community to have a better-than-average ability to pay higher property taxes. As such, MTSD receives approximately 2.6% of revenue limit authority from state aid, and 97.4% from local taxes. 

The state of Wisconsin continues to provide school districts with inadequate sustainable funding and our district is forced to do more with less as we work hard to provide the programming and resources our students deserve and provide the excellent educational experience that our community expects. Instead, we are projecting historic budget shortfalls beginning now through the foreseeable future. 

Based on conservative assumptions, the projected deficits in the MTSD for the 2024-25 and 2025-26 school years are over $4 million and over $5 million dollars respectively. Plainly speaking, we are experiencing a school budget crisis. To address this crisis, we as a school district must find ways to increase revenue streams while reducing operating expenses.

A: The Mequon-Thiensville School District has a long history of maintaining financial prudence and responsibility, even in challenging times. We are proud of our ability to budget conservatively, spend wisely, and ensure that we are getting the most out of every dollar. This status has been reaffirmed for more than a decade through our consistent Aaa bond rating from Moody’s. 

Most recently, MTSD has taken the following steps to balance our budget and close the gap created by increasing costs:

• Eliminated two District-level administrative positions.
• Opened up additional open enrollment seats to increase student enrollment and generate additional per-pupil revenue without creating additional expenses. 
• With guidance from the MTSD Board of Education’s legislative platform position on public school funding, the District engaged in legislative advocacy efforts in support of increased school funding. 
• Introduced the use debt defeasance, or pre-paying on the District’s debts in order to keep future costs down, for the 2022-23 school year budget. 
• Used a combination of Fund Balance and Fund 46 to balance the 2023-24 school year budget. This means the District has used our “cash on hand” in order to balance the budget, and it is not considered a sustainable or recommended practice in balancing future budgets.
• Began engaging the process of Zero-Based Budgeting, a process that helps an organization consider what expenditures are no longer required.

A: The most recent MTSD referendum project was a facilities, or “capital,” referendum that was approved by the majority of the Mequon-Thiensville community for the public purpose of paying the cost of a districtwide school facilities improvement project to address needs in the areas of safety, security, site and ADA improvements and renovations; construction of additions at the Elementary Schools and the Middle Schools; and acquisition of furnishings, fixtures and equipment. 

An operating referendum is different from a capital referendum in that it allows districts to raise their revenue limit authority in order to sustain recurring operational costs. Revenue generated by an operating referendum does not go toward new or additional projects, but allows the district to cover the costs that have increased due to rising inflation and stagnant state funding.

A: During the months of August and September 2023,  the MTSD Board of Education engaged in an analytical process. The purpose of the analysis was to determine what alternatives best match the Board’s objectives in solving projected budget shortfalls over the next three school years. 

The list of alternative solutions considered (in no particular order):

• Launch a philanthropic giving campaign (including naming rights, sponsorships, etc.)
• Use a combination of fund balance and Fund 46 to balance the budget
• Reduce educational programming that is not required (reduce FTE and associated costs)
• Increase class sizes (reduce FTE)
• Reduce co-curricular programming that is not required
• Reduce employee health and retirement benefits
• Sell Range Line Community Center
• Implement the BOE’s authority to increase the revenue limit by $1 million
• Explore an operating referendum to be voted for in April 2024
• Explore an operating referendum to be voted for in November 2024 or April 2025
• Implement larger-sized concurrently taught classes for high school courses that all students must take

Objectives for considering the solutions:

• Minimize negative impact on organizational effectiveness (achieving our mission and vision - students achieving desired outcomes)
• Ensure sufficient revenue to cover expenditures
• Reduce operating expenses
• Minimize increasing property taxes
• Maximize the organization's ability to attract and retain high-quality employees
• Ensure no negative impact on safety
• Minimize disruption to existing academic programming (course options) to meet community expectations
• Ensure future financial sustainability and predictability
• Minimize disruption to instructional priorities (including staff development) to achieve MTSD academic goals
• Maintain class sizes in alignment with our goal ranges
• Minimize disruption to current co-curricular programming (student options outside the school day)
• Minimize the impact on the organization's ability to protect its investment in facilities and infrastructure

The following alternatives emerged from the Board’s discussion as those that best meet the objectives and will require further evaluation:

• Explore an operating referendum to be voted for in either April 2024, November 2024, or April 2025.
• Launch a philanthropic giving campaign.
• Use a combination of fund balance and Fund 46 to balance the budget.

A: Members of the Task Force were selected to represent a diverse range of current and former MTSD parents who have experience across the areas of finance, law, healthcare, human resources, and education, and have demonstrated leadership in their respective fields and in Mequon and Thiensville. Further, these individuals were selected to represent a wide array of perspectives related to the school district and local community.

A: The state of Wisconsin continues to provide school districts with inadequate sustainable funding and our district is forced to do more with less as we work hard to provide the programming and resources our students deserve and provide the excellent educational experience that our community expects. For the school year, MTSD is managing a budget deficit of $1.4 million. Based on conservative assumptions, the projected deficits in the MTSD for the 2024-25 and 2025-26 school years are over $2 million and over $3 million dollars respectively. These assumptions and projected deficits take into account the state-level funding that was recently granted to public school districts as part of the Wisconsin state biennial budget process for 2023-25. 

In 1994, when the state of Wisconsin implemented revenue limits, public school districts have been funded primarily with a combination of state aid and local property taxes. Unfortunately, revenue limits have not kept pace with inflation and since then, 80% of public school districts across the state of Wisconsin have approved operating referenda in order to maintain adequate programming.

A: Funds generated as a result of a successful operating referendum would be used to cover the basic expenses of operating our school district and closing the inflationary gap that has forced us into recurring - and now unmanageable - deficits. With this funding, we would be able to: 

• Continue to offer competitive salaries and benefits in order to attract and retain high-quality educators during a time when teachers are exiting the profession in record numbers.
• Respond to the salary adjustment requests of current educators who perform above and beyond their existing paygrade. 
• Maintain “extra” non-required programming such as fine arts, athletics, world languages, TAG (Talented, Advanced & Gifted) services, etc.
• Maintain class sizes within our preferred guidelines.
• Meet the rising costs of keeping our school buildings safe, secure, and operational from a utilities standpoint.

Funds generated as a result of a successful operating referendum would NOT be used to finance additional or new projects.

A: If the MTSD Board of Education and administration fail to secure an adequate and sustainable source of funding to meet our budgetary needs going forward, the District will be forced to make extremely challenging decisions regarding ways to cut operating expenses. Some of the options that could possibly be considered include:

• Cutting extra or co-curricular programming and activities
• Increasing class sizes and reducing or eliminating instructional staff positions
• Reducing or eliminating administrative/other staff positions
• Deferring necessary facilities and equipment maintenance
• Deferring necessary technology equipment maintenance and upgrades
• Increasing annual student fees and facility rental fees
• Selling district-owned property or school buildings

A: Zero-Based Budgeting (ZBB) helps an organization consider what expenditures are no longer required. The process includes answering questions as part of the budget building activities like:

• What resources and activities are needed when considering current and future conditions?
• How will the budget reflect evolving conditions?
• What activities/programs can be removed to match the evolving needs of the organization?

For more information on Zero-Based Budgeting, read this article from Mind Tools: Zero-Based Budgeting

A: This is something that will be determined if an operating referendum is determined to be the top recommendation of the Task Force, or subsequently, a solution that is put forth for action by the Board of Education.

A: Yes, several. In 1994, when the state of Wisconsin implemented revenue limits, public school districts have been funded primarily with a combination of state aid and local property taxes. Revenue limits have not kept pace with inflation and since then, 80% of public school districts across the state of Wisconsin have approved operating referenda in order to maintain programming. Districts in our geographic area who have recently passed an operating referendum include:

• Fox Point-Bayside -  2018, 2022 & 2023
• Glendale-River Hills - 2019
• Nicolet - 2021
• Maple Dale-Indian Hill - 2019
• Shorewood - 2023

A: This is something that will be determined if an operating referendum is determined to be the top recommendation of the Task Force, or subsequently, a solution that is put forth for action by the Board of Education.