The Fort Atkinson School District Board of Education on Jan. 16 heard a financial projection from Nathan Knitt, the district’s director of business, that forecasts a budget shortfall for the 2025-26 fiscal year and steeper deficits after the current operational referendum expires.

Knitt told the board the projection incorporates a 7-year enrollment trend (the district’s 2024-25 head count was 2,190, measured on the third Friday in September), a $325-per-pupil increase under the state revenue limit, a 5% wage assumption for 2025-26 (with 3% CPI and a 2% market adjustment assumed inside that figure), and a 12% year-over-year health insurance increase forecast. He said the projection is preliminary and subject to change pending the state biennial budget, health insurance renewals and other updated information.

The projection shows a carryover surplus for 2024-25 that “will mostly offset” a forecasted deficit for 2025-26. Knitt said the district is “850 in the black” for 2024-25, “just under $1,000,000 in the red” for 2025-26, and “approximately $3,800,000 in the red” in the last year of the current operational referendum. He emphasized these figures are early estimates and that updated state budget numbers arriving between June and October could change the outlook.

Board members pressed on specifics behind the drivers of the gap. Members noted enrollment is declining statewide and that the district’s projected per-pupil cost increases outpace the $325-per-pupil revenue bump. One board member summarized the math: the district’s projected costs increase by roughly $1,400 per pupil while the state increase is $325 per pupil. Board members asked about housing and community growth as long-term enrollment strategies and emphasized scrutiny of every budget dollar.

Knitt described other forecast assumptions: 5% increases for utilities and transportation, a 10% increase for business insurance (workers’ compensation and liability), 3% growth in 4K payments, and modest supply and miscellaneous expense increases. He said the board has previously prioritized maintaining benefits as part of total compensation and that benefits remain a retention tool for district staff.

No formal action was taken on the projections at the meeting. Knitt asked for board advisement on next steps and confirmed administration will continue to refine projections as state and insurance information becomes available.