NORTHEAST WISCONSIN – With an education background, Appleton parent and education advocate James Bacon knows what his kids’ teachers face.

He has two sons in elementary school. They’re thriving, largely because of their teachers, he said. But, should he need to advocate for more support, he worries about the additional strain that could place on the already overburdened teachers and systems.

Bacon’s concern has driven his advocacy work. When the Appleton School District voted to go to an operational referendum for $15 million in the spring 2026 election to balance its budget and add student supports, Bacon helped organize a group of volunteers to get the word out. Many in the group were parents who had to rearrange busy schedules, he said.

In the weeks leading up to the election, the group’s Facebook page posted multiple times a day. They set up presentations, printed yard signs and connected with residents, urging them to vote and to invite a friend along.

While he was talking to voters, Bacon said two concerns stood out to him. On one side, people were worried about increasing the strain on their own pocketbooks through property taxes, especially in Grand Chute, where homeowners just had their property reassessed. On the other, some thought the district wasn’t asking for enough help for their students; some supported going as high as $17 million instead.

Ultimately, the referendum in Appleton was successful, passing with about two-thirds of the vote from over 26,000 people. But across the state, more than a third of all school referenda failed during the same election, according to data from the Wisconsin Department of Public Instruction.

The conflict between higher property taxes and increased school funding has been over three decades in the making, according to researchers, administrators and advocates. Any potential solution may mean rethinking a school funding situation that has been in place for that long.

The November elections for state Assembly and Senate will influence who is part of that solution, as the new Legislature will begin work on the next biennial state budget in January.

How does Wisconsin fund its public schools?

Wisconsin has 421 public school districts, each with taxing authority. Districts receive money from four sources: state aid, property taxes, federal aid and other local non-property tax revenues (such as fees and interest earnings).

The state-provided aid generally falls into two buckets:

Equalization aid, distributed through a formula based on a district’s equalized property value per pupil.

Categorical aid, meant to partially fund programs like special education and student transportation services.
Wisconsin school districts are capped when it comes to the total funding they can spend, called the revenue limit. It is the amount districts can collect from equalization aid and property taxes. Categorical aid and federal funding don’t count against the limit. The revenue limit for each district is calculated using a school district’s total enrollment and the revenues it collected in previous years.

The state Department of Public Instruction calculates the total revenue limit using a formula, but revenue limits are often expressed as a per-pupil dollar amount.

The revenue limits have been in place since the 1993-94 school year. Until the 2008-09 school year, districts’ revenue limits were indexed to inflation. From that time until the 2023-24 state budget, changes to revenue limits had to be approved year over year by the state Legislature. In six of those school years, districts received no increase at all, and in 2011-12, the revenue limits actually decreased by an average of $554 per student. Gov. Tony Evers’ partial veto of the 2023-25 biennial budget set revenue limits’ annual increase to $325 per student per year.

However, even with that increase, Wisconsin school funding hasn’t kept pace with inflation overall and has fallen relative to other states.

Wisconsin Policy Forum reported that Wisconsin’s per-pupil funding per student in 2003 was 11th in the nation. In 2023, it was 26th.

Wisconsin’s approach to school funding differs from many other states, said Sara Shaw, a researcher from the Wisconsin Policy Forum.

Illinois, for example, uses “evidence-based funding,” where the state aims to fund its districts at an “adequacy target.” That level is determined by the estimated cost to educate students and the local resources on hand.

Many other states, like Minnesota, use a weighted system; each enrolled student is funded at a basic per-pupil amount, but the state increases funding based on the number of students that might need additional support, like English language learners, students in smaller school districts, and students who qualify for free and reduced lunch.

Wisconsin’s equalization aid formula, Shaw said, isn’t based on need but local property wealth. While local property values and student need can align, she said that’s not always the case. She gave vacation and tourism communities as an example: While local property values in those communities might be high, residents’ socioeconomic status might be lower. In the Sturgeon Bay School District, for example, property taxes will support over 60% of their general fund in 2025-26, partly due to rising property values. But nearly half of the district’s students were considered economically disadvantaged in the 2025-26 school year, according to data from DPI.

How do school districts manage their budgets?

For the first quarter of the fiscal year, from July 1 to Oct. 15, school administrators and financial professionals are working off of an estimate for how many students they’ll have.

Holly Burr, finance director for Appleton’s public schools, said that budgeting is “an ongoing project,” but that twice a year her department examines every single class and building in the district to see where staff are most needed. They do this in the winter and summer in order to set staffing levels for the beginning of the next school year.

It’s “kind of backwards from how you think of budgeting,” she said, because the district must hire staff before it knows the exact amount of funding it’ll have for the school year. Districts count their students on the third Friday of every September, and their revenue limit information is released in the middle of October.

Budgets are typically set by the end of October.

Districts also look for ways to increase revenue and decrease costs. For example, enrollment in summer school increases student counts for the revenue limit. If a district finds ways to attract more students through open enrollment than it loses, that increases the headcount as well.

For lowering costs, Burr said the Appleton School District bids annually for property and liability insurance, and tries to keep employee health care costs down without burdening staff. Three years ago, the district moved to self-funded health insurance and is part of an in-house clinic co-op with another district and the City of Appleton, Burr said.

District spending bound by student needs and the law

Student needs are one of the main drivers of school budget decisions.

For the 2026-27 school year, Burr said the district hired more counselors, psychologists and social workers with the money from the referendum because it saw students needed more mental health support after the COVID-19 pandemic. It also added three positions to assist with about 1,500 English language learners, one of which doubles as a social worker.

School budgets are also bound by mandates from the state and federal government – and help covering the costs of those mandates is limited. Special education students are entitled to a free and appropriate public education under the Individuals with Disabilities Act. Title VI of the Civil Rights Act of 1964 requires schools and districts to help English language learners overcome language barriers in their education.

Giving these students support usually means hiring more staff, like paraprofessionals, physical and occupational therapists, interventionists and interpreters. But districts get limited help paying back the extra costs.

During the 2025-26 school year, the state reimbursed 35% of the money used for special education, despite 42% being promised in the 2023-25 state budget. According to DPI, the reimbursement is paid from a fixed pot of money determined by the Legislature; if more claims come in, then the rate drops.

In 58 districts that qualified for aid for English language learners, the state reimbursed only about 8% of the costs in 2024-25.

Any money that the state doesn’t reimburse for those costs must be taken from districts’ general fund. In the 2025-26 school year:

Milwaukee Public Schools transferred about $163.6 million from its operating budget to its special education fund.

Madison schools transferred $61.9 million.

Green Bay schools transferred $32.4 million.

Appleton schools transferred $28.7 million.

And, while overall student population declines, the number of students needing special education services has been increasing.

The student population declines are largely driven by an overall decline in the birth rate. However, more families are also choosing other educational options for their students, like homeschooling or using one of Wisconsin’s voucher programs, which pays qualified students’ private school tuition using state funds.

School districts turning to operational referenda to balance budgets

As Burr looked ahead to the task of balancing Appleton’s budget for 2026-27, she said the cost of employee health insurance has been increasing by double-digit percentages every year. For the 2026-27 school year, she also anticipates increased student transportation costs partly because of the rising cost of diesel.
Due to budgetary pressures, school districts are increasingly turning to their main mechanism to increase their budget: asking their communities to increase their taxing authority by going to referendum.

School districts typically go to either capital or operational referendum:

Capital referenda are meant to address building needs in a district.

Operational referenda are meant to help districts balance their budgets.

In Little Chute, the school district is opting for both in the November election.

The capital referendum would authorize the district to collect more money for building maintenance and repairs, including fixing the roof, which would extend its warranty for 20 years. Its operational referendum is meant to supplement the district’s technology budget, which would allow it to keep offering one-to-one devices for most students and provide cybersecurity upgrades.

District Superintendent Heidi Schmidt said that while Little Chute has saved money where it could, these costs are beyond the district’s ability to pay within its revenue limits.

With only about 1,600 students enrolled, the Little Chute district is the smallest in the Fox Cities. Schmidt said she wants to ensure her students have the same opportunities as students in bigger districts.

At the same time, the cost of that technology keeps rising, which is part of the reason Little Chute is going to an operational referendum for the third time since 2007.

Besides the stakes of going to referendum, the process also takes time and work from school district leaders. Schmidt said a top priority for her was showing the community that the district is using taxpayer money wisely. She’s leading three information sessions in October and expects to spend up to 10 hours before Election Day getting information out to the public.

Burr said going to referendum is a last resort for most districts looking to balance budgets, and that districts typically will consider referenda when they believe further budget cuts will impact student learning.

“It is a significant amount of work,” Burr said. “Nobody likes to go to their taxpayers and say, ‘We can’t live on the money that the state is giving us.’

Continued next week

This story was produced as part of the NEW (Northeast Wisconsin) News Lab, a consortium of five news outlets.