The Appleton Area School District Board of Education met 07/14/2025. They continued their ongoing discussion about how to deal with the District’s $12 million+ structural deficit. This discussion followed three previous discussions on the matter, one that took place on 05/12/2025, one that took place on 06/09/2025, and one that took place on 06/23/2025.
During the 07/14/2025 meeting, it was noted that the District’s structural deficit which had originally been estimated to be $11 million is now estimated to be $12.5 million with future adjustments potentially increasing it to $15 million. Appleton Area School District Superintendent Greg Hartjes told the Board, “This is unprecedented for us. We’ve not, as a district, ever had this type of deficit. So, it is significant. These numbers we’ve not ever seen before, and obviously we’re going to talk about that a little bit more tonight, but this this number is more than anything we’ve ever faced in terms of a structural deficit. Many districts are in the same boat we are. We’ve talked about that, but this is a very large number for us.”
The Board reviewed the expected revenue increases associated with the recently passed state budget and discussed estimated expenses and fund balance changes for the 2025-2025 school year and discussed what if any cuts they wanted to make as well as how much money they would like to seek in a referendum.
If a referendum is pursued, the deadline for the Board of Education to approve such a step would be 01/27/2026 in order to get it on the ballot for the 04/07/2026 election.
I’ve prepared a transcript of the discussion for download:
AASD Executive Director Holly Burr started the presentation out by telling the Board that the deficit which had originally been estimated to be $11 million and then adjusted up to $12.5 million now had the potential to end up being $15 million when final adjustments for incoming grants and employee health plan expenses were factored in. The on-site audit would take place in August with final adjustments being made in October. She did, however, note that a $2.5 million adjustment was a large number, but it would only be 1% of their total budget, which was a reasonable variance for them to have at this point.
Ms. Burr reviewed some of the impacts of the recently passed stated budget. The revenue limit had been increased to $325 per student. This would result in about $4.7 million in revenue to the District. Additionally, Special Education reimbursement rate had been increased from 32.5% to 42%. However, it remained a sum certain amount which meant there was a set pool of money to be distributed as special education aid, so although the reimbursement percent was 42% on paper, in actuality it would probably end up being 2-3% lower. Using that slightly lower estimated reimbursement rate, the District expected to bring in $3.7 million in Special Education revenue.
The High Cost Special Education reimbursement rate had been increased to 50%, but that also was sum certain aid. Historically, the actual reimbursement rate had been 5-6% lower than the estimate. Using that lower reimbursement estimate, the District expected to bring in $400,000 in High Cost Special Education funding.
The District also expected to bring in $1 million through Open Enrollment and receive a one-time payment of $500,000 in Act 20 funding. Act 20 funding was associated with the District’s literacy program. At the time Act 20 was passed, a 50% reimbursement rate had been set up. AASD spent around $2.1 million on materials some of which had been required by Act 20 and some which AASD had already planned as part of their ELA program. They had initially hoped to receive 50% or around $1 million in reimbursements, but at the state level there was only around $25 million left in Act 20 funds to be divvied up amongst all schools, so it was likely that AASD would receive less than $1 million. They expected it would only be around $500,000.
It was also mentioned that right now the Federal government is withholding Title 2, 3, and 4 grants from the state. Wisconsin’s attorney general is suing them over that. AASD’s portion of those dollars would be $1.8 million, and that typically goes to fund their before and after school programs, some English Learners costs, and professional development. AASD already received $1.5 million in Title 2, 3, and 4 grants for the 2024-2025 school year, so were just waiting on around $350,000 which they might still receive.
If those grants were ended for the 2025-2026 school year, they would have to have some serious discussions about adjustments and possibly shifting costs to local taxpayers. Additionally, they were already 2 weeks into the 2025-2026 fiscal year and had already planned for that $1.8 million. Per Superintendent Hartjes, “We have our EL staffing that’s already planned, professional development planned. So anyway, it is a concern for us moving forward here, certainly hoping that you know—one of the things we’re hearing is that some of the money might come back to the state as a block grant and then come out, rather than being dispersed across Title 2, 3, and 4. But we’ve heard that the federal government plans to save some dollars and not give all that money back. So, you know, maybe best-case scenario, we get half of the $1.8 million. We again would have to figure out, what do we want to do with that $900,000, or it could be more.”
They also had expected increases to expenses for the 2025-2026 school year. They had not entered into talks yet with staff on compensation increases for the year but Ms. Burr estimated an increase of $3.4 million. Additionally, they did not have final numbers for the employee health plan, so she estimated an increase of $4 million. They were able to freeze many operational expenses so the increase was only $500,000 when normally that number would be $2.5 million.
With increases in revenue and changes in expenses as well as cost saving measures they had taken this year such as closing Columbus and freezing the operation budgets, Ms. Burr thought they could get the 2025-2026 structural deficit down to between $7.5 million and $11 million.
Superintendent Hartjes stated, “Regardless of all of this (and we’ll get to it in the next couple of slides), is we’re going to end with a structural deficit. There’s really no way for us to cut enough expenses to get to even by the end of this year in terms of that structural deficit.”
Board member Oliver Zornow reiterated a point he has made in previous meetings, “[R]eally, this also goes back to the decoupling of the revenue limit from inflation, which the gap that we experienced this year was $40 million relative to what we spent on kids in 2009 versus this last year.”
The discussion then moved to what their plans were going forward. Prior to the meeting the Board members had been asked to provide feedback on what budget deficit they wanted to aim for. Did they want to continue with business as usual which would include a 3% increase to all departments’ budgets or did they want to pursue no budget increases or even some degree of reductions. The majority were in favor of either continuing with business as usual or maintaining the existing budget without any increases.
Prior to the meeting, they had also been asked about their preferred strategy for reconciling to budget. 4 of the Board members were in favor of using a referendum to cover 100% of the structural deficit plus some additional costs. 2 Board members were in favor of using a referendum to cover 80% of the District’s deficit costs while using cuts to handle the remaining 20% of the deficit. Board member Jason Kolpack, who was presumably one of the members in favor of pursuing some reductions, stated, “[M]y personal feeling is that we probably need to, like, show some good faith towards the community and say, you know, we’re like, doing everything we can to reduce as much as we can, so that when we do go and ask for that that referendum funding, we can say we did everything we could to reduce that deficit as much as we could before we came asking. That’s my personal feeling.”
The Board members had also been asked to provide feedback on what areas they believed were the most important so that if the District pursued cost reductions they could know what areas to prioritize. The three top areas that the Board members prioritized and did not want to see cut were Literacy (including interventionists), Class sizes for grades 3-5, and staff compensation.
They finished up by reviewing the timeline for a referendum. For the 2022 capital referendum, there had been a lot of planning including focus groups and committees that had been associated with that effort. Superintendent Hartjes said that AASD had never before gone to referendum for operational expenses just to manage their budget. If they pursued a referendum now, it would be more straight forward than the 2022 referendum. They would basically need to decide how much they would ask for. “Certainly, you know, Holly has worked on some numbers of what it might cost. But then also, we have to look at if we wanted to add something to that. If we’re going to ask for more than just what would balance our budget. What would it cost to add 10 social workers, school psychs, and counselors? What if—you know those type of things. We have to have those discussions, and so anticipate we’ll be doing that all fall at the same time as gathering some information. So certainly, a much tighter timeline than we’ve ever had for a referendum.”
The deadline for the Board to vote on proceeding with a referendum would be 01/27/2026 in order for the referendum to get on the ballot for the 04/07/2026 election.
[I would like to see a more comprehensive discussion and presentation about the services AASD is required by law to provide and what those costs are versus everything that it does that is above and beyond that and how much that costs.
Superintendent Hartje’s comments about figuring out the cost to add social workers, psychologists, and counselors is concerning because it comes off as the District actively seeking to take on responsibilities for the care of children that it should not be taking on and that should be the purview of the parents. It seems like if parents are failing in their basic responsibility to care for their children’s mental wellbeing, the response from society should not be to throw that responsibility onto schools but instead for society to set up expectations for parents to start performing their parental responsibilities. Schools should not be taking on the responsibilities of parents; parents should be handling those responsibilities, and it’s grossly inappropriate for parents to expect schools to take on that parental role. I would like to have an estimate of how much AASD could save if it no longer carried out parental responsibilities such as transporting students, providing free lunches, providing mental health services, trying to make sure that truant students regularly attend school, and dealing with badly disciplined children. These responsibilities should be put back onto parents.]
View full meeting agenda here: https://d3n9y02raazwpg.cloudfront.net/aasd/1028046b-505b-11f0-b7f5-005056a89546-2171d860-3ac4-49db-84a5-200d91432c4c-1752531167.pdf
View full meeting video here: https://aasd.granicus.com/MediaPlayer.php?view_id=1&clip_id=91
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