Local Community School District board members heard a detailed briefing July 14 on recent state budget actions and a separate U.S. Department of Education decision that temporarily withholds federal Title program funds, and were told those developments increase the likelihood the district will pursue another operational referendum.

The superintendent’s finance staff told the board the state’s biennial budget kept per-pupil adjustments well below inflation and did not include additional aid sufficient to offset rising costs; administrators said that gap means the district is not receiving the state increases it would need to avoid local tax increases. The board was also briefed that the U.S. Department of Education announced it would withhold more than $72 million from Wisconsin for several federal programs, including migrant education (Title I‑C), teacher effectiveness (Title II‑A), English‑language acquisition (Title III‑A), student supports (Title IV‑A) and 21st Century Community Learning Centers (Title IV‑B).

“DPI’s confidence is high that the funding will be released eventually, but the district must plan for a scenario in which we do not receive the current allocation,” the finance director said.

Why it matters: board members were told the combination of muted state increases and the temporary federal hold could reduce district revenues and push local tax levies higher if the district spends amounts that lower state equalization aid. Administrators proposed placing roughly $300,000 into the board’s restricted building/projects fund (Fund 46) and holding other surplus in reserve to avoid sudden tax increases while auditors verify year-end figures.

Details of the briefing: district staff presented a preliminary 2025–26 budget that, based on available estimates, showed a roughly $605,000 surplus using current assumptions, but staff recommended retaining a large portion of that in fund balance pending final enrollment, property valuation and DPI determinations. Staff emphasized that property valuations and head counts will not be final until the fall and that state aid estimates may change.

Board discussion and next steps: trustees asked for talking points to explain tax impacts to the public and affirmed the need to keep contingency planning in place. Administrators said they would finalize numbers after auditors’ work and anticipated returning to the board with a more complete recommendation in August and again after October when state-certified values and enrollment counts are available.

No formal action: the board discussed options for using the preliminary surplus and potential timing for a future referendum but took no formal vote on a referendum at the meeting.

Prognosis: administrators said the district likely will need to pursue an operational referendum when the current referendum expires unless state or federal funding returns at a higher level than currently projected.