Sun Prairie district meeting approves $99.3M levy estimate

Attendees at the Sun Prairie School District's annual meeting approved a projected $99.3 million property tax levy for the 2026–27 budget.

That figure is nearly $5.4 million above the 2025-26 tax levy of $93.9 million, or a 5.75% increase.

The 2026-27 mill rate is anticipated to be $10.38 per $1,000 of equalized value, compared to last year’s mill rate of $10.21 per $1,000 of equalized value, producing a 1.66% hike. For 2026-27, the mill rate is less than past calculations predicted.

Matt Clark, the district’s director of business and finance, explained, “Back in November of 2024, in the referendum communication, the projection was $11.30. So, we are able to report a mill rate that is almost a dollar lower than what we had told our community a couple years back.”

Sun Prairie passed a recurring $25 million operational referendum in November 2024 that was to be phased in over a five-year period. The purpose was to use the money, set to exceed state-imposed revenue caps, to address inflation, state funding gaps and budget deficits.

Budget details

This will be year three of the five-year phase in process for the 2024 referendum. Clark reported that 59%, or $14 million, of the $25 million approved has been allocated, with $10.3 million remaining.

Nothing has been finalized with the 2026-27 school district budget, so these figures could change. However, currently, Clark reported that Sun Prairie does have a balanced budget, with Fund 10 revenues and expenditures at $167 million.

The district does have other funds, as well, so the overall expense budget is projected to be $226.1 million.

Essential information necessary to complete the overall budget picture is still being gathered, including student enrollment and the state equalization aid certification, which helps determine the final tax levy.

The equalized property valuation – nearly $9.2 billion in 2025, or 7.9% higher than it was in 2024 – is also unknown at this time, and that’s used in setting the mill rate.

All these numbers will be known by the middle of October.

The school board will adopt the final 2026-27 budget and tax levy at its meeting on Oct 26.

Clark conducted the budget hearing at the annual meeting, providing the financial details that go into the budget to the audience.

School districts are bound by revenue limits, set by the state. They determine how much revenue a district can receive from state aid and property taxes. Enrollment also figures into the equation. That is set by the third Friday in September student count.

A three-year rolling average of full-time equivalent resident enrollment is then multiplied by the revenue limit per pupil to calculate a district’s revenue limit authority, or the maximum amount of money a district can receive from those sources.

The tax levy is determined by subtracting state equalization aid – finalized on Oct. 15 – and other aid from that revenue limit authority.

“The goal of equalization aid is to equalize the amount of aid across all 420 school districts in the state, based on property values, student growth, spending, etc.,” said Clark.

To calculate the total school-based tax levy, the revenue tax levy for the district’s Fund 10 account is added with referendum-approved debt (Fund 39) and community services (Fund 80), which supports things like Community Schools, a program designed to merge resources, family and community partners from all seven school buildings to enhance student development and learning.

Dividing the total school-based tax levy by equalized property values, which are finalized Oct. 1, and multiplying that by $1,000 yields the tax mill rate.

The school portion of an individual’s tax bill is calculated by multiplying the fair market value of a home by the mill rate and subtracting the school levy tax credit. Taking a random tax bill, Clark calculated that for a home with a fair market value of $621,684, the school portion of that tax bill would be $5,370.23.

The University of Wisconsin Applied Population Laboratory (APL) projected in February an enrollment decline of 45 students for Sun Prairie in 2026-27, but to be conservative in constructing the budget, Clark used a drop of 150 students, having monitored enrollment since that time to the present.

“Enrollment is really what drives any school budget, not only on the revenue side, but on the expense side, as well,” said Clark.

However, Clark also explained a rolling three-year enrollment average is used to calculate the revenue limit authority.

“Which is nice when districts have either upticks or downticks in enrollment. It really allows more of a smoothing out of that revenue limit impact,” said Clark.

Enrollment for 2025-26 was 8,519, as APL projects a total enrollment of 8,474 for 2026-27. What APL is projecting, according to Clark, is a decline in the upper high school grades, with some small increases at the lower elementary level.

The so-called “Kindergarten Replacement Trend” is something Sun Prairie officials are keeping an eye on.

“Pre-COVID, what we were seeing, and what much of the state was seeing, was that you would graduate a senior class of let’s say 500 students, and the following school year, you’d have a kindergarten class coming in of 500 students, replacing that outgoing class,” said Clark.

Since the COVID-19 pandemic, Clark explained, “We have really high numbers of students graduating and leaving our system, and the kindergarten numbers are not keeping pace with that.”

A lot of that, said Clark, is tied to declining birth rates nationally, and this is not a trend specific to Sun Prairie.

Regarding open enrollment, Clark reported that the amount coming into the district in fiscal year 2025-26 was $3,931,765, compared to $3,313,955 going out.

In July, the Department of Public Instruction released its state equalization aid estimates for all Wisconsin school districts.

Sun Prairie is projected to receive $63.3 million in state aid, an increase of 2.92% over 2025-26. That’s nearly $147,000 more than the estimate included in the Sun Prairie budget presented in June. What causes the increase? Spending levels, property wealth and statewide district spending.

“Again, this serves as a property tax offset. This isn’t additional spending for the district,” said Clark.

The final amount will be released Oct. 15.

Just over 53% of district revenues come from property taxes, with state sources accounting for 42.5%, federal funding making up 1.4% and 2.6% from interdistrict sources, money which comes from incoming open enrollment. The district incurs an expense with outgoing open enrollment students.

Gov. Tony Evers’ partial veto in 2023 set up a $325 per pupil annual funding increase for school districts for the next 400 years. That is a number that is known, although Clark said that it could change down the road, depending on how the fall election for governor goes.

“We know what it is this year. We’ll see what it is next year for the new state biennium budget,” said Clark.

Clark also reported the district is dealing with a federal funding shortfall, a projected decrease of $157,000 for 2026-27, which impacts the district’s highest-needs schools and students. Most of this funding goes to support staffing at Sun Prairie’s Title I elementary schools.

Next steps

“Which makes this funding really significant,” said Clark.

A one-year “Band Aid” solution, as Clark called it, will use general fund dollars and non-classroom budget reductions to cover the shortfall.

“But depending on how this continues to go, if cuts continue to happen, we’re going to start to have to have some tough conversations on how we support this moving forward,” said Clark.

Tapping into 2024 operational referendum funds could be an option, according to Clark. Otherwise, some of those support positions could be reduced, he added.

Of the district’s expenditures, almost 76% goes for salaries and benefits, with 17% spent on purchased services, most of which includes money for transportation. Supplies and other non-capital items make up the rest.

For 2026-27, there is a slight reduction in staffing of 2.0 full-time equivalent professional educators. That was achieved by attrition, as Sun Prairie avoided making layoffs. No staffing increases for any other employee group were included in the budget.

Professional educators are getting a Consumer Price Index salary increase of 2.63%, plus another 1% raise for every educator who completes 24 hours of professional development.

Salary increases are subject to negotiations with the Sun Prairie Education Association in late summer and early fall.

Regarding benefits, the current budget includes an 11.5% increase for health insurance, although the school board will have final say on that.

“Which is a huge number, but compared to our counterparts, they’re seeing a lot higher numbers than this,” said Clark.

Dental insurance is expected to go up 5% in 2027. There is also a 0.1% bump for the Wisconsin Retirement System.

School districts like Sun Prairie do levy for the state’s charter and voucher programs, and Clark noted that for the first time, Sun Prairie’s levy will eclipse $1 million.

“We are working with the board and Dane County to do our best to break out this levy on taxpayer tax bills, because currently, this levy is a part of the Sun Prairie Area School District levy you see every winter,” said Clark.

Clark likened the fund balance to a “financial cushion” to help the district deal with uncertainty in state funding and revenue fluctuations.

It also factors into the district’s credit worthiness, reduces cash flow borrowing costs and impacts future bond ratings.

Clark noted that growing the district’s fund balance has resulted in interest savings on 2026-27 short-term borrowing needs of $400,000.

Sun Prairie’s fund balance is near the average of comparable school districts, according to Clark. School board policy is for the fund balance to be at least 15% of the total budget. Clark said that a district fund balance of 20% is considered “healthy.”

“We are at just over 20%, and what the goal would be is to get this as close to 25% or 30%, where we don’t have to cash-flow borrow and pay interest on those funds anymore,” said Clark.

“It would also put the district in a better position if federal funding continues to be cut, if state funding continues to be in question – again, it provides a level of security for us and for our taxpayers.”

One member of the audience, a former school board member, questioned whether such a high fund balance was necessary.