Finance Fridays

Nearly two-thirds (roughly 66%) of Wisconsin’s 421 school districts have passed an operational referendum since 2023 to help pay for staff and basic services.

As of 2026, our neighboring districts of Cambridge, Deerfield, Jefferson, Johnson Creek, Fort Atkinson, and Waterloo have all successfully secured voter-approved operational referendums through community support. These measures allow districts to exceed state-imposed revenue limits to fund daily operations such as special education and mental health services, competitive teacher and staff wages, technology, transportation services, and routine building maintenance.

Lake Mills remains one of the few districts, both locally and statewide, operating solely within the standard state funding formula. This creates a widening financial gap between Lake Mills and our immediate neighbors.

What is the difference between a capital referendum and an operational referendum?

Think of it like a household budget: a Capital Referendum is like a mortgage (to buy or renovate the house), while an Operational Referendum is like your paycheck (to pay for groceries, the electric bill, and the people living there).

2026 Statewide Referendum

As you can see from the attached chart, recent data from Wisconsin school referenda reveals a growing trend of voter support for local education funding between 2025 and 2026. Capital improvement passage rates saw a significant jump from 61% to 75%, while operational questions saw both a higher volume of requests and a stronger passage rate, climbing from 52% (30 of 58) in 2025 to 59% (37 of 63) in 2026.

The number of successful requests increased, suggesting that more Wisconsin communities were willing to approve funding to sustain school operations in 2026 compared to the previous year.

In our next edition, we will focus on defining the revenue limit.

Since 1993, Wisconsin has placed a "Revenue Limit" on every public school district. This state-imposed cap determines how much funding a district can receive through a combination of state aid and local property taxes.

For many years, this limit increased annually to keep pace with inflation. However, that practice stopped in 2009.

As of 2026, the gap between current funding and where it would be if it had kept up with inflation is roughly $3,571 per pupil.

While the state approved an additional $325 per student for both 2026 and 2027, this amount does not fully cover rising costs. With state equalization aid frozen through 2027, the responsibility for funding this increase has shifted more heavily to local taxpayers.

Special education provides extra support and services for students with disabilities that affect how they learn. Students ages 3 through 21 may qualify if a disability affects their learning, and they need specialized instruction. If a student qualifies, a team creates an Individualized Education Program (IEP). Whenever possible, students learn alongside their peers in general education classrooms.

Did you know that Wisconsin reimburses public schools for only a portion of what they actually spend on special education? While school districts are legally required to provide these vital services, the state has historically covered about 30% of the cost.

In the 2025–27 biennial budget, lawmakers approved an increase, stating the state would cover 42% of costs this year and 45% next year. However, due to inaccurate cost projections, the set-aside for fixed funding is expected to cover closer to 38% this year and 40% next year.

Because of this gap, school districts across Wisconsin must redirect significant funds from their general education budgets to meet legal requirements for special education services—totaling more than $1 billion statewide each year.

What does this mean for Lake Mills?
In 2023, the district transferred $1.75 million from its general fund to support special education. That amount increased to $1.95 million in 2024, $2.3 million in 2025, and is projected to reach $2.5 million in 2026.

When state funding falls short, local districts must make difficult financial decisions to meet legal requirements and support all students.

If you have questions, Ms. Tasha Naylor, our Director of Business Services, is happy to connect.

Have you ever wondered why school districts can face budget shortfalls even when state funding appears to increase?

According to data from the Legislative Fiscal Bureau, school funding adjustments since 2009 have not kept pace with inflation. As a result, districts today have significantly less purchasing power per student than in previous years.

Estimates suggest that this gap equals roughly $3,571 less per pupil in inflation-adjusted funding compared to where funding would need to be to maintain past levels of purchasing power.

Key takeaway:
Even when nominal funding increases occur, rising costs over time can reduce what districts are actually able to afford per student. Combined with declining enrollment and fixed operational costs, this can create significant budget pressure for local school districts.

Have you ever wondered why school budgets don’t decrease when enrollment declines?

It may seem like simple math: fewer students should mean lower costs, right? But the reality of operating a school district is much more complex than a simple head count.

Several factors impact why school costs remain steady even when enrollment changes:

Fixed Costs Stay Fixed: If a classroom has 20 students instead of 25, the school still has to heat the room, light the building, and pay the teacher.

Transportation Costs Remain Steady: Even when fewer students ride the bus, the district still must operate routes, maintain vehicles, and pay drivers. These costs are tied to transportation needs, not just the number of students transported.

Student Needs Continue to Evolve: Our schools support students in many ways, including mental health services, special education support, and additional academic interventions. These services require dedicated staff with specialized training to help meet student needs and support every student’s success. 

Our Commitment to Responsible Stewardship 

Lake Mills Area School District is committed to being responsible stewards of your tax dollars while continuing to meet student needs. The district regularly reviews staffing, programs, and resources to identify efficiencies and make thoughtful decisions. This includes:

• Optimizing staff placement through natural attrition, such as retirements and resignations.
• Consolidating roles when it makes educational and financial sense.
• Reviewing class sizes to ensure resources are balanced across our schools.

The Bottom Line: Running a school district is a balancing act. We continue to look for efficiencies while ensuring every student receives a high-quality, safe, and supportive education.

Lake Mills Area School District is ranked 391 out of 421 school districts in per-pupil funding. Only 30 districts in Wisconsin receive less funding per student.
This impacts the resources available to operate our schools, staff compensation, and the number of positions available to support student needs.

The Numbers:

• Lake Mills revenue limit per pupil: $12,101 
• State average: $14,103 

What is the Maximum Revenue Limit?
The Maximum Revenue Limit is the total amount a school district can collect and spend each year through a combination of:

• State funding
• Local property taxes

For the 2025–2026 school year, the Lake Mills Area School District’s total revenue limit was $17,522,594. When divided by the district’s three-year average enrollment of 1,448 students, this results in a per-pupil revenue limit of $12,101.
Understanding these funding limits helps explain the financial challenges school districts face and why advocacy at the state level continues to be important.

Data Source: WI Department of Public Instruction - Longitudinal Data - Revenue Limit