Milwaukee School Board approves $1.5 billion budget amid accounting crisis

Milwaukee School Board members approved a $1.5 billion budget Thursday night while they are still uncovering the full consequences of severe accounting failures by administrators who have left the district.

One of the eight board members, Darryl Jackson, voted against the budget.

Board members said they needed to approve a budget plan so the district can continue operating, paying staff and planning for the next school year, as MPS approaches the end of its fiscal year June 30. The board could make cuts to the budget later in the year, when the district’s financial situation becomes more clear.

The school district is facing a possible reduction in state aid to offset previous accounting errors that may have caused the district to be overpaid. MPS also faces threats of additional aid being withheld because of late financial reports, as officials dash to piece together months of faulty accounting.

Three top officials have departed MPS since the accounting problems came to light: Superintendent Keith Posley, Chief Financial Officer Martha Kreitzman and Comptroller Alfredo Balmaseda. A new coalition is seeking to recall four school board members. Gov. Tony Evers is hiring auditors to take a closer look at MPS operations.

The district notched one win on Thursday when board members and state officials agreed on a corrective action plan for the district. The approval of that plan means that MPS won’t miss its next state aid payment June 17.

Union calls for budget approval, others call for a delay

Before voting on the budget, board members heard the frustration of community members who felt blindsided by the news of the district’s accounting problems, especially on the heels of a successful referendum to raise local property taxes for the school district.

Annie Young said she was attending her first school board meeting, along with her two children.

“Why did you come to us asking us to give you more money so that things didn’t get cut, and you didn’t have your ducks in a row? You screwed us, and that made me upset,” Young said. “So at the age of 56 years old, I came down here for the very first time to say I’m disappointed, and I think everybody needs to do better.”

Some called on board members to delay their vote on the budget, while members of the Milwaukee Teachers Education Association urged board members to approve it.

“The board needs to pass the budget to stop the uncertainty that the families and workers have right now,” said Ingrid Walker-Henry, president of the MTEA, the union for MPS staff. She added that the board needs to “fix the problem that we all know exists and ensure that a situation like this never happens again.”

Jilly Gokalgandhi, vice president of the board and chair of the board’s budget committee, said the board needed to get a budget plan in place, and would consider changes to that budget plan after the state Department of Public Instruction determines how much state funding the district will receive in light of the district’s errors.

“This budget will change as DPI provides us with more information on what the real impact will look like for the district,” she said. “We know it’s a serious impact, and so as we get more information, we will share more information.”

Jackson, before voting against approval of the budget, said he was skeptical of the budget prepared by Posley. 

“Payroll has to happen, people have to get paid, that’s a given,” Jackson said. “But also, I don’t trust the proposed budget that was put in place by past administration.”

Accounting errors could lead to future budget cuts

MPS could be docked between $35 million and $50 million in state aid for the next school year due to previous accounting errors by the district, according to initial estimates DPI provided to the Journal Sentinel Thursday afternoon.

If the state aid is reduced, the school board could make budget cuts, raise local property taxes to offset the reduction in state aid, dip into the district’s savings, or use some combination of those options, according to staff at the Wisconsin Policy Forum.

Gokalgandhi said the board would be “looking for solutions that do not impact the taxpayers,” acknowledging that those solutions could include budget cuts.

“I think across the board, we are feeling like we want to evaluate scenarios within our current budgetary abilities and powers to make sure that the taxpayers of Milwaukee are not impacted,” Gokalgandhi said.

Chris Bucher, communications officer for the state Department of Public Instruction, said the errors by MPS may have included grant dollars being coded into the wrong year, journal entries without complete documentation and incorrectly coded revenues and expenditures.

MPS budget cuts nearly 300 staff positions

The district’s budget plan cuts nearly 300 staff positions for the next school year. MPS has not answered questions from the Journal Sentinel or Wisconsin Policy Forum about how many of those positions are currently vacant. 

School districts across the state are facing budget cuts this year, squeezed between rising costs and state-imposed revenue limits that haven’t kept pace with inflation.

When MPS board members voted on a referendum to send to voters this year, they chose a middle road: a tax increase that would significantly reduce the district’s deficit but not entirely eliminate it. The referendum will provide MPS with about $140 million in additional funds for the next school year, while the projected deficit was $200 million.

The biggest cut in the budget plan, which was presented in April by Posley, is the loss of about 130 school support teachers who mentor new teachers and facilitate training. They had been paid with federal pandemic relief aid, which is expiring. They are being offered jobs as classroom teachers, a district spokesperson said.

Posley’s budget plan also cut four out of 14 positions in the district’s Black and Latino Male Achievement Department and Gender Identity and Inclusion Department, including the GII director. A budget amendment from Gokalgandhi and board member Megan O’Halloran added the GII director back into the budget by cutting the district’s director of remote work.

Posley’s plan also cut seven of 22 staff members in two other departments: Restorative Practices, and Positive Behavioral Interventions and Supports. Board members O’Halloran and Erika Siemsen amended the budget to save the director of the Restorative Practices Department and two restorative practices coaches. The district plans to fund the jobs by not filling other vacant positions.

Other budget amendments from board members reversed Posley’s cuts to one mentor teacher, three trauma coaches and two work-based learning specialists.