The Green Bay School District shrunk its budget deficit by $30M in a year. Here's how

GREEN BAY — A year ago, the Green Bay School District was facing a $36 million fiscal cliff in the 2024-25 school year. Now, that deficit has shrunk to $6.5 million.

The district has a balanced budget of $338 million for this year, but it still faces a structural deficit in future years unless it finds a way to cut costs.

Why is the Green Bay School District facing a budget deficit?

Green Bay is not in a unique position. School districts across Wisconsin are grappling with declining enrollment, record inflation, the depletion of federal pandemic relief funds and lagging state funding. All of these factors mean less revenue for districts.

The Green Bay School District's enrollment has declined since 2016. In simple terms, fewer students means less money because much of school funding is determined on a per-student basis.

Inflation, while tapering off, has pushed costs higher for labor, utilities and maintenance costs. State funding hasn't kept pace with the rate of inflation for over a decade. Even the most recent bump in funding under the new state budget isn't enough to offset a decade's worth of inflation.

The district, like many others across the state, has been relying on federal pandemic relief money known as ESSER to balance its budget. Districts have until September 2024 to claim these funds.

The Green Bay School District received about $72 million in federal and state relief money and has about $37 million left to spend.

The influx of pandemic relief money has helped the district maintain a balanced budget for the past few years, giving it time to strategically plan cuts.

How did the district shrink its deficit by $30 million?

The district presented a budget update in April showing that it was projecting a $20 million fiscal cliff, having cut $16 million.

The district had downsized by about 105 full-time-equivalent employees and reduced health benefits. Salaries and benefits are the district's largest expenses.

It had also cut costs from administrative positions, cellphone stipends, software, internet hot spots, graduation ceremonies, lunch trays, vendor contracts, and other stipends and incentives. The district has been reviewing vacancies as well to see if they can be filled internally.

The largest contributor to shrinking the deficit is the the revenue the district can generate under the new state budget. It will reduce the deficit by $12.2 million, from $20 million to $7.8 million.

Public school districts in Wisconsin are restricted in how much money they can spend by revenue limits. State aid and property taxes make up the limit. If one goes up, the other goes down, but the total amount of money the district can spend is frozen.

More: Parents reflect on what makes Wequiock Elementary special on its final first day of school

Under the new state budget, the district will get an additional $1,000 in funding per student. That will bring its per-student revenue limit to $11,000, which is closer to other districts' spending limits. Next year, it can raise it another $325 per student.

The district projects an additional $1.3 million in savings in the 2024-25 school year through staff attrition and the closing of Wequiock Elementary, according to Chief Financial Officer Angela Roble.

That brings the district to a $6.5 million budget deficit in the 2024-25 school year.

In August, the Green Bay School Board approved an 8% base wage salary increase, consistent with the previous year's consumer price index. Roble said the $6.5 million takes into account that increase in wages for district staff.

Despite shrinking the deficit for next year, the district's expenses will continue to outpace its revenues in the future, Roble said. By 2025-26, the deficit will grow to $10.5 million and then $14.5 million in 2026-27, if changes aren't made.

"We still have to address our declining enrollment issues through our facilities master plan and continue to be strategic on cost reductions," she said.

How does closing schools play into the budget deficit?

Part of the district's plan to reduce its expenditures is to consolidate and close some schools.

It's cheaper to have fewer schools, the district's Chief Operating Officer Josh Patchak said at an April School Board meeting.

An architecture firm hired by the district predicted that in 10 years, enrollment will be 67% of the district's "ideal capacity" on average. The firm calculated the ideal capacity of a school as 90% of the maximum a building can hold.

The district is using the facilities master plan as an opportunity to consolidate and operate schools more efficiently while also updating its buildings, some of which are nearing 100 years old.

More: Green Bay School District recommends removing Leonardo da Vinci from closure plans

"That's really the key to getting out of the hole that we're in," Patchak said at the April meeting.

A community task force recommended in May that the district close 11 of the its 42 schools. The school board has officially voted to close one so far: Wequiock Elementary.

The decisions under the facilities master plan will help cut that remaining $6.5 million and address the structural deficit. The School Board will spend the next year planning and making decisions on schools.

Danielle DuClos is a Report for America corps member who covers K-12 education for the Green Bay Press-Gazette. Contact her at dduclos@gannett.com. Follow on Twitter @danielle_duclos. You can directly support her work with a tax-deductible donation at GreenBayPressGazette.com/RFA or by check made out to The GroundTruth Project with subject line Report for America Green Bay Press Gazette Campaign. Address: The GroundTruth Project, Lockbox Services, 9450 SW Gemini Drive, PMB 46837, Beaverton, Oregon 97008-7105.

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This article originally appeared on Green Bay Press-Gazette: How the Green Bay School District shrunk its budget deficit by $30M