001Hello everybody. My name is Matt Clark. I serve as the director of business and finance for the Sun Prairie Area School District. Today I'll be walking you through the district's fixed budget inputs for the 26-27 budget. So, um the agenda. First, I'll explain what we mean by fixed budget inputs. Um then I'll briefly review some key formulas um that drive school finance. Um after that, I'll discuss our current assumptions for 26-27. And finally, I'll wrap up with the remaining timeline for the budget building process. So, what are fixed budget inputs? When we say um fixed budget inputs in this context, we mean factors that are largely outside of the district's control. Um these include items such as enrollment, state aid, revenue limit increases, special education reimbursement, and property values. Um these assumptions help really shape
002the development of the budget throughout the year. Um and as updated information becomes available to us, these assumptions can and likely will change during the budget building process. So, next I'll briefly review um the major formulas that drive school finance in Wisconsin. Um I thought this would be important to add into not only this slideshow, but in future budget slideshows with some newer board members. Um just to make sure that everyone is aware of kind of the key formulas and some of the verbiage that I use. Um just how that impacts the formulas that drive um our budget each and every year. The first formula is the revenue limit formula, which determines the total amount of revenue a school district can receive through the combination of state aid and property taxes. Um to get the
003revenue limit authority, um, you take the resident membership FTE, which is a three-year average, multiplied by the revenue limit per pupil dollar amount. Um, this is given to us by the state of Wisconsin. Um, this then gives us our revenue limit authority. Once we have the revenue revenue limit authority from the prior slide, um, we sub then subtract out equalization aid or state aid to determine how much of the revenue limit authority will come from local property taxes. Um, state aid, which is a key part of that formula, is not finalized until October 15th each year. Um, it's also important to remember that increases in state aid, um, generally provide only property tax relief rather than additional operating revenue for districts. I think that's a common misconception. Um, when you hear lawmakers say that they're
004increasing state aid, that is not additional dollars, um, in terms of budget for the school district. Instead, it's, um, property tax relief. Then, once we have our revenue limit tax levy, um, that number provides us with the amount that we'll receive from our local property taxpayers for our general operating expenses. Um, outside of our general operating fund or fund 10, um, we also levy for referendum approved debt payments in fund 39, as well as our community service fund or fund 80. Um, when you combine those two numbers or three numbers, um, that then equals our total school-based tax levy that's passed on to our taxpayers. So, once we have the total school-based tax levy, we can then calculate the tax mill rate. The mill rate is calculated by dividing that total school base tax levy
005by the district's equalized property values. Those property values are determined annually by the Department of Revenue and represent the fair market value across the district. I'll talk more about equalized property values in a later slide. So once all that information is known, um this formula allows any taxpayer to plug in their numbers for their individual home or property to determine what the individual school portion of the tax bill will be. The fair market value multiplied by the mill rate that we had just calculated subtracting the school levy tax credit, which is shown on every tax bill, equals the individual school portion of the tax bill. So now that we've covered the key formulas, and thank you for hanging with me through that. Um those formulas will be kind of a recurring thing as we go
006through the budget building process. Uh but now that we've covered them, I'll review the district's current assumptions for the 2026-27 budget. So enrollment. Enrollment will always be one of the biggest drivers um for both the district revenues and expenses when we budget. All of our expenses go to supporting our students and our schools, and our revenue is determined by the amount of students that we have in terms of uh membership FTE. It's a key part of that formula, as you can see below. Um and during the February 23rd board meeting, um it was shared that the UWAPL um is projecting a decline of approximately 45 students for next year. However, to remain conservative in our planning, um and based off of some historical trends, um the district is currently budgeting for a decline of 75
007students. Revenue limit per pupil the current state budget within the 25-27 biennium budget. We are continuing the $325 per pupil annual revenue limit increase that was established through Governor Evers partial veto authority back in 2023. That increase has been incorporated into our budget and is within our assumptions for the 26-27 budget. Once we get into 27-28 budget, we'll have a new biennium budget. So, we'll see if that's something that continues, but for now we can count on it for next year. Equalization aid or state aid. So, the current assumptions that we're utilizing comes from the Baird forecast model which estimates approximately $63.3 million in equalization aid for next year. This would represent about a 2.7% increase from the current year. These estimates will be updated once the district receives the July 1 aid estimate that
008comes out each year from the DPI. The projected increase is driven by a couple things. I'm happy to go more into detail in future presentations, but state aid really comes down to how much the district is spending compared to other districts in the state. The property wealth of that district as well as statewide spending especially with some of the larger districts in the state can have big swings in state aid. Equalized property value. So, at this time the preliminary estimates that we're utilizing assume a 4% increase in equalized property values, which would bring the district total to roughly 9.6 billion dollars. This estimate is intentionally conservative and will continue to be refined as additional information becomes available. So, the state budget, this has been a hot topic with the special education reimbursement rate. In the
00925-27 biennium budget, um, the state promised school districts 42% reimbursement rate in 25-26 and 45% in 26-27. However, and we've talked about this, um, this funding is some certain versus some sufficient. So, often times the actual reimbursement rates often fall short of the state's promises and we're seeing that this fiscal year. Our actual reimbursement rate is currently trending closer to 37.5% opposed to the promised 42% in the state budget. The difference in those two equates to roughly 1.2 million dollars in reimbursement rate that we are not currently receiving from the state. So, really big deal. Um, and because of that uncertainty moving forward, this first draft of the budget conservatively assumes a 39% reimbursement rate for 26-27 opposed to the 45% that the state told us last July. This was a conversation, topic of conversation
010during the state surplus bill that fell through about a week ago. So, we will continue monitoring any future discussions at the state level regarding the state surplus bill and if that would be impacting this funding at all. So, next steps. um, This is just a timeline of next steps in finalizing the budget. We are currently presenting the fixed budget inputs to the board just to provide a touch base for you all to understand some of the assumptions that we're we're making in our budget. We will then come back to the school board on June 22nd with a first draft of the budget and then we'll move forward after that with public hearing, the proposed budget, and then our annual meeting prior to adopting our budget on August excuse me, October 26th. I want to thank
011you for your time and listening to my screencast. Please don't hesitate to reach out if you have any questions. Thank you.