State estimates $18.2 million aid cut for MPS

Superintendent William Andrekopoulos sent a memo to School Board members yesterday after the administration was informed that the state is estimating an $18.2 million cut in the district's FY09 general state aid and poverty aid allocation.

The text of the memo is below.

TO THE MEMBERS OF THE BOARD OF SCHOOL DIRECTORS

The state’s July 1 estimate projects an $18.2 million decrease in general state aid and poverty aid for MPS.

That means, assuming the estimate holds, that the budget the Board adopted in May will require a property tax levy of $288.6 million, up $37.5 million, or 14.9%, from the levy for FY08.

In contrast, the approved $993.1 million FY09 budget is up just 1.5% from the FY08 budget.

If the district were to levy for FY09 to the maximum allowed under the revenue limit, the levy would be an estimated $302.4 million, up $51.3 million, or 20.4%, from the levy for FY08.

There are a number of factors that resulted in decreased state aid for the district. First, the district’s equalized value per pupil increased significantly. The district’s average per-pupil equalized valuation rose 12.2% from FY08 to FY09; the statewide average increase was 6.6%.

In addition, the district’s shared costs in FY08 were essentially unchanged from FY07. The district’s spending as a share of statewide school spending did not keep pace with other districts.

Finally, the state’s general aid appropriation increased just 1.6%, far below the rate of inflation.

The new state aid estimate increases Milwaukee residents’ property tax burden for the voucher program to almost $58 million, which is partially offset by the $9.8 million in high-poverty aid. Of the 24 school districts scheduled to receive high-poverty aid in FY09, only Milwaukee is required to use it to offset the costs of a particular program – the Milwaukee Parental Choice Program.

The state is projecting an MPCP enrollment of 19,500; the district, in its budget preparations, assumed an enrollment of 20,000.

The district continues to be harmed by the separate and unequal school funding formula the state has adopted for Milwaukee. The district pays 45% of the cost of the voucher program, but is not allowed to count any voucher students as district students. The formula increases MPS costs while reducing its enrollment and, subsequently, the district’s state aid allocation.

The state’s aid estimate may change, but clearly it presents new challenges for Milwaukee Public Schools.

Under the budget approved by the Board, the district’s overall tax levy would look like this:

District levies

We will, of course, continue to keep you apprised of new information as it becomes available.

Thank you,

William G. Andrekopoulos
Superintendent of Schools