The Appleton Area School District Board of Education met 08/25/2025. They spent around 50 minutes continuing their discussion about how to deal with the District’s structural deficit.
The deficit is between $13 and $15 million dollars, and Superintendent Greg Hartjes stated, “[W]e have never faced that type of deficit. We are in a financial crisis our district has never seen, and most districts across the state are feeling the same way. They’re faced with financial crises they’ve never seen. And so, districts are going to referendum for operating. Districts are closing schools, and they’re reducing staff. And those are the three ways that you can mitigate the financial struggles that, as we talked about early on, are a function of the revenue limit at the state level that we don’t get to control.”
Currently, AASD’s leadership team hopes to deal with the deficit by (1) maintaining normal 3% budget increases in 7 priority areas including things such as staff compensation, special education, elementary school class sizes, and mental health resources while freezing department and building budgets and seeking reductions through repurposing the Columbus Elementary building, moving Appleton Bilingual School into the Huntley Elementary building, and not rehiring non-key positions when staff members retire or resign and (2) seeking additional funding through a referendum on the April ballot to cover the remainder of the deficit.
I’ve prepared a transcript of the discussion for download:
BUDGET RECONCILIATION STRATEGY – Currently, the District is facing a structural deficit of between $13 million to $15 million. For the 2025-2026 school year, the AASD leadership team has adopted a strategy of doing a normal 2-3% increase in key areas such as employee compensation, anything dealing with literacy, mathematics, elementary school class size, special education caseload sizes, mental health resources and staff, and behavior supports. They have frozen the budgets in non-prioritized departments such as Assessment, Curriculum, and Instruction, Business Services, and Tech Services. Additionally, they have reduced costs in some areas by repurposing the Columbus Elementary building, eliminating the $100,000 annual lease for the Appleton Bilingual School by moving it to the Huntley Elementary campus, and achieving approximately $280,000 in savings by not filling empty positions. It was noted that the staff positions that were not being filled were not classroom teachers but things such as an administrative position, a facilities department position, and a math coach position. Per Superintendent Greg Hartjes, “The hope is that we come out of this year’s budget, we don’t add to that structural deficit that is somewhere between 13 and $15 million.”
Board member Ed Ruffolo noted that one of the things that had driven the structural deficit was healthcare costs. He asked if there was anything they could do to stop the rather large growth they were seeing in that area. He also asked what the District would do if healthcare costs grew more than they anticipated and threw out the hypothetical of costs ending up being $2 million more than they expected.
Executive Director of Finance Holly Burr responded that she and Human Resources Officer Julie King spend a lot of time every year reviewing the healthcare plan and looking for efficiencies. They also ask their consultants to regularly go out to bid for services to make sure AASD is getting the best deal out there. Ms. King added that they made some revisions to their plan design last year specifically to help the plan perform better.
Superintendent Hartjes indicated that overall they were frustrated that year after year they make changes to improve costs but they continue to get double digit increases every year. In response to the hypothetical about costs being $2 million more than expected he said, “Because we are not insured, we pay all bills. If that happens, we no longer have a fund balance to go into. And so, it would be very difficult for us to go beyond where we are now in terms of our budget deficit. We’ve been, I would say, somewhat comfortable operating with a negative budget the last two years because we knew we had some fund balance that we could rely on. That fund balance is gone. It’s the spendable fund balance.”
Board member Ruffolo responded, “So, if I’m understanding, the answer then is, if it is more than we anticipated, we’re going to have to offset that with cuts somewhere else,” which Superintendent Hartjes confirmed.
REFERENDUM/BUDGET CUTS STRATEGY – In terms of how to deal with the deficit in the long-term, initially 4 members of the board had indicated a desire to use a referendum to cover 100% of the cost of the deficit plus normal operational increases, 1 had been in favor of using a referendum to cover 100% of the deficit plus additional vision casting improvements beyond that, while only 2 members had indicated a desire to use a combination of referendum dollars and budget cuts to deal with the structural deficit.
In the discussions since the board members had initially been polled, it seemed to the leadership team like the board members were more comfortable trying to use a combination of going to referendum while also making reductions and looking for savings. This means that AASD would have to save between $2.6 million and $3 million through savings and reductions while seeking between $10.4 million and $12 million via referendum depending on what the overall structural deficit ended up being.
A large factor in what the final numbers ended up being depended on what AASD’s September enrollment count ended up being. Per Superintendent Hartjes, “[F]or many years, we were going up by 100 students every year, and so that that’s a million dollars in new revenue every year. In the ’19-’20 year was the first year we didn’t go up by 100 students in several years. We actually went down by 100 students, right? And then we lost 1,400 students during the pandemic. So, enrollment is really important to what our revenue is going to be.”
Board member Oliver Zornow indicated he was not supportive of making up 20% of the deficit through cuts, saying, “[T]he Appleton Area School District, of the 11 large districts, invests the least per pupil in our kids. And however we accomplish these cuts, we will be expanding that gap between what we’re investing in our kids and what’s being invested in kids in Green Bay, in Oshkosh, in Eau Claire, in Madison, in Milwaukee and making sure that we continue to be a destination district. I don’t know that it is fair to our broader team or to our students to continue to ask them to scale back and do more with less, because we have high expectations for our team and high expectations for our kids. And so, I’m a firm believer that we should be looking at a referendum that not only meets the structural deficit but then begins to talk about what is—what are those opportunities for us to improve our outcomes for students.”
He went on to say, “I want to clarify: if there are things where we can find efficiencies and how we’re using $2 today, let’s do it. But I can guarantee you, there’s a space where those $2 can be put to help our students achieve better, help support our staff better. So, I’m a firm believer that we should be looking at how do we enhance the experience we’re able to offer in Appleton rather than looking how we can cut the investment in our future.”
BUDGET PRIORITY AREAS – Based on feedback from the Board of Education, the Leadership Team together a list of the District’s top priority, second-level priorities, and third-level priorities. If the board gave them the go-ahead to make cuts, the leadership team would start by looking at third-level priorities first and only go into second-level priorities if they found they had to make deeper cuts. If a referendum did not pass, then they would have to look at their top priorities as well.
Top priorities are:
- Staff Compensation
- Student success – Literacy (includes interventionists)
- Special Education caseload sizes, co-teaching, and pull-out classes
- Class Sizes-Elementary (grades 3 – 5)
- Mental health resources and student services staff (ie. psych, SW, counselor)
- Success/behavior supports (homeless, attend, deans, advocates, EMLSS)
- Student success – Mathematics (includes interventionists)
Second-tier priorities are:
- Early childhood education programs – 4K
- Staff Benefits
- Operating budgets for schools and departments
- Programming (Dual Credit, Electives, Youth Apprenticeship, Alt. Ed, Electives)
- Safety and security measures in schools
- Class sizes – MS/HS
- English as a Second Language services (non-mandated)
Third-tier priorities are:
- Special education services and activities (non-mandated)
- Professional development for staff (includes instructional coaches)
- Operational technology (software, hardware, cybersecurity)
- Facilities (capital improvement and ongoing maintenance/replacements)
- Curriculum updates and improvements
- Classroom technology (Tech Integrators, laptops, Viewsonic boards, LMC)
- Enhanced music (elementary band/orchestra, middle school small groups)
- Co-curricular activities
- Transportation
- Community engagement initiatives (excluding Community Schools)
- Summer learning programs
It was discussed that entire programs listed in the different tiers would not be cut. For example, the 4K program listed in the second tier would not be eliminated but staff might be reduced in some area.
Superintendent Hartjes explained that AASD’s budget was currently approximately $250 million. If they needed to cut $2.5 million, that would be a 1% reduction overall, but they wouldn’t cut 1% across the board from all programs. They might cut 5% in one area, 1% in another area, and nothing in another area. “It wouldn’t be significant cuts if it’s only the $1 to $2 to $3 million that we’re discussing. […] [I]f a referendum were not to pass, or we decided not to go to referendum, we would be making significant cuts.”
Board member Ruffolo asked if a referendum passed after they made cuts, would the cuts be difficult or easy to reverse. Ms. King told him that timing of a referendum did impact some staffing decisions because the educator contracts go out in March but the referendum wouldn’t happen until April. There were other things, however, that would be easily reversible; if, for example, they decided to remove a level from the employment grade scale, they could always add that back in if a referendum passed.
It was clarified that staffing and programming for the 2025-2026 school year had already been set. Any staffing adjustments that happened in 2025-2026 would happen only through naturally occurring attrition. Any potential active changes to staffing would be for the 2026-2027 school year.
Board member Kris Sauter asked how reductions to the curriculum budget would work. Ms. Burr explained that for the 2025-2026 school year, the department’s budget had been frozen at last year’s level. “So, they did not get their normal 3% increase, which in some cases, does fund, you know, something special that they want to do, or adding, you know, a new a new class somewhere, or something like that.” She did not know what the curriculum department’s individual priorities were or how they were dealing with the freeze, but she did not believe the lack of an increase in funds was significant this year. She did however note that back when they used a lot of physical textbooks, they could save money by pushing off buying new textbooks, but that was not as viable a strategy now that everything was digital and online and AASD was charged an annual fee for access to online materials.
Board President Kay Eggert thought it was important that these lists were made but she stressed the need to view them in context. Just because something was on the list didn’t mean it was going to be completely cut from AASD.
Ms. Burr indicated AASD wanted to hear from the community at large as to what their tolerance level for cuts was.
Board member Ruffolo said, “As far as communicating the why behind the referendum, I think it’s important to note the why is not the structural deficit. We sat together as a board with leadership, collaborated on four major goals that we’re trying to achieve in the future, as well as all the other things that we’re doing. That’s really the why—right? We need to communicate that to the community: here are the things that we feel are important for us to continue to do to service our students and our community. And I also think it’s very important for voters when they go to decide on the referendum, so they know what they’re voting ‘yes’ on, but they also should know if I vote ‘no,’ what are those cuts? So, people clearly know it’s not ‘Well, I hope they find $15 million some place.’ It’s ‘Here are the programs we’re going to have to cut. Here’s the steps we’re going to take,’ and so they can make a good decision.”
Board member Zornow said, “The possibility of trying to impose a $15 million cut on our programs, I—is not something that I don’t—that I think anyone in the community can truly fathom what that means. It will again put our children further behind relative to their peers at other large districts in the state on a per pupil basis.”
He went on to stated, “This is not an enrollment crisis. You’re absolutely right, Superintendent Hartjes, that when our enrollment was growing, it was easier to manage this situation, but it is—on a per pupil basis, we are spending less in Appleton on our kids than any other large district in the state, through 11 large districts, and we continue to have instability in our tax levy. We’ve had almost 30 years of cuts to the tax levy, and that’s—the problem is the way we fund schools in Wisconsin, and it’s why every district is facing some form of this.”
He raised the idea of creating an ad hoc financial strategy committee “focused on stabilizing the tax rate and addressing the structural deficit.” Board President Eggert directed staff to put that on a future agenda.
View full meeting agenda here: https://d3n9y02raazwpg.cloudfront.net/aasd/7e45f096-6320-11f0-b7f5-005056a89546-2171d860-3ac4-49db-84a5-200d91432c4c-1756156241.pdf
View full meeting video here: https://aasd.granicus.com/MediaPlayer.php?view_id=1&clip_id=102
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