Milwaukee schools scrambling to cut back after audits reveal $46 million shortfall

As Milwaukee Public Schools (MPS) begins to deal with a $46 million budget deficit, the community is questioning how such a situation arose in the first place.

“You say this budget is a reflection of your values, so where does lack of transparency about financial mismanagement fall into your values?” Will Fitzgerald, a special education teacher, said at a Feb. 10 district committee meeting as reported by the local ABC affiliate.

Until recently, the public didn’t even know the existence and extent of the district’s overspending, which led to the multimillion-dollar shortfall.

“A financial reporting scandal in 2024 led the state to withhold funds from MPS until district administrators got the books in order, and it also resulted in a series of audits that revealed the $46 million in overspending,” journalists noted.

The district is planning to break up deficit payments by paying $23 million this academic year, with $23 million more in the next, according to the article.

“The district is implementing measures such as freezing hiring for non-classroom positions, reviewing contracts for potential cuts, studying transportation costs, and making cuts in central service staffing, including the superintendent’s administration.”

So far, the district has avoided acknowledging any culpability for the deficit.

“The committee investigating the budget lapse did not blame any specific staff member or department,” the article observed. “Instead, officials cited declining enrollment and insufficient state funding as contributing factors.”

‘Meeting key deadlines is critical’

As previously reported by The Lion, the Wisconsin Department of Public Instruction withheld any new aid to MPS after it missed May 16 and May 30 deadlines to submit financial reports.

“Withholding funding is a last resort and comes after countless hours spent supporting MPS,” said Tom McCarthy, the department’s deputy state superintendent.

“We’ve seen real progress in recent months under the leadership of Dr. Brenda Cassellius, and we recognize and appreciate the hard work that has gone into those efforts. Meeting key deadlines is critical to ensure the DPI can accurately and efficiently calculate general aid estimates for school districts across Wisconsin.”

One Democrat state senator acknowledged the district had been overfunded by “tens of millions” for years, despite a history of fiscal mismanagement.

In a recent example, the district made substantial errors in its 2024 financial reporting, causing a loss of $81 million in state aid.

“At the time, MPS blamed inexperienced staff and out-of-date software for the late financial reports,” the local ABC affiliate reported.

A corrective action plan drew criticism at the time from state Sen. John Jagler, R-Watertown: “It looked like something that an intern threw into ChatGPT saying, ‘Give me a plan to clear up our finances.’”