Budget shortfalls loom for Green Bay School District. The district anticipates $6M and $11M deficits in next couple years.

GREEN BAY — Despite school closures and consolidations, the Green Bay School District is still facing a multimillion dollar structural budget deficit in future years.

In June 2022, the district projected a $36 million deficit for the 2024-25 school year. By September, that number had shrunk to $6.5 million, and in December, it dropped to $2.2 million.

As of Monday night's budget update, next year's deficit is gone.

The district was able to move some federal pandemic relief funding, known as ESSER funds, to close the gap on next year's budget, Chief Financial Officer Angie Roble said at Monday's School Board meeting. The district has an operating budget of over $300 million.

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While the district has a balanced budget for next year, $6 million and $11 million shortfalls loom for the 2025-26 and 2026-27 school years, respectively.

The 2026-27 school year is also the last year of the district's $16.5 million operational referendum. The district will likely turn to voters for additional operating dollars.

"As a district, we still need to continue to do the work to reduce our expenses in order to balance the budget in future years," Roble said. "So the cost-cutting measures of consolidating schools and staff attrition that were taken for the 2024-25 school year are aimed at addressing the structural deficit."

What is the Green Bay School District going to do?

The district has not yet presented a plan for future cuts, and the proposal to close and consolidate schools is unlikely to be a catch-all solution, according to district Director of Communications Lori Blakeslee.

The district is in the middle of changing school boundaries, proposing that three elementary schools — Elmore, Langlade and MacArthur — close, in addition to those closing at the end of this school year. Keller, Tank and Wequiock elementary schools will all close this spring, with students moving to Kennedy, Lincoln and Red Smith, respectively.

Closing Elmore, Langlade and MacArthur is estimated to save the district a similar amount of money as closing Keller, Tank and Wequiock — about $2.4 million. Any future school closures and their respective boundary changes wouldn't take effect until after next school year.

"There are still several unknowns, most importantly the state budget," Blakeslee said in an email. "In addition, the boundary changes are not proposed for next school year, so other cost savings measures would be needed to meet the projected $6 million (deficit in 2025-26)."

The strategic planning process will help guide cuts, Blakeslee said. That process was in full swing in February with a committee of community members and regularly scheduled meetings. But everything was canceled and put on pause in March, shortly after the resignation of former superintendent Claude Tiller.

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That process is expected to resume next school year, according to Blakeslee.

The district will need to go to capital referendum to execute the full boundary changes and school consolidations, which includes building a new west-side elementary school on Kennedy's property. The district plans to put a measure on the ballot in November. But for what amount has yet to be determined, pending approval of the changes by the School Board and the level of community support.

Last fall, the district proposed a $150 million capital referendum for April but opted to wait until November after a community survey showed the ballot measure would likely have failed.

Why is the district facing a structural deficit?

Green Bay is not alone in its financial troubles. 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.

One of the largest strains for the district is declining enrollment.

Enrollment in the Green Bay School District has declined by 12% since 2016 , going from about 21,100 to 18,600 students. In simple terms, fewer students means less money because much of school funding is determined on a per-student basis.

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, like many others statewide, has been relying on federal pandemic relief money to balance its budget. Districts have until September to claim these funds.

The Green Bay School District received about $72 million in federal and state relief money and plans to use all of it.

What cuts has the Green Bay School District already made?

The move to close Keller, Tank and Wequiock will save the district $2.4 million, according to Roble.

As of September, the district had downsized by about 105 full-time-equivalent employees and reduced health benefits. Salaries and benefits are the district's largest expenses, and it's relying on attrition to right-size its staff.

It has 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 revenue the district can generate under the most recent state budget. It reduced the deficit by $12.2 million.

Gov. Tony Evers' line-item veto in the state budget secured an annual increase in education funding of $325 per student for the next 400 years. While that annual increase would be helpful to schools, it is being challenged in court by the Wisconsin Manufacturers & Commerce Litigation Center.

A new biennium state budget will be in place by the 2025-26 school year, leaving districts like Green Bay with the task of making cuts without knowing how much state support they will get.

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 .

This article originally appeared on Green Bay Press-Gazette: Budget shortfalls loom for Green Bay School District. The district anticipates $6M and $11M deficits in next couple years.