PRESCOTT – The Prescott School Board unanimously approved the proposed 2026-27 budget and tax levy at the Oct. 28 meeting.

An increase in the tax levy this year of $124,789 brings it to $12,730,736 with a mill rate of 7.53, the lowest mill rate in at least 11 years, said Director of Operations Ashley Boe. Last year’s mill rate was 8.19. While good news, people will pay their taxes based on what their property is assessed at, or worth.

This increase is 0.99% over last year’s total of $12,605,947. The money is divided into three portions: a revenue limit of $8,646,883 (which is based on pupil count), a community service fund of $280,000 and a debt service fund of $3,803,853

“A majority of the increase is due to inflation,” Boe said. “The summer programming that we had last year and will continue has been great and really helped support those numbers.”

The food service fund money transfers from Fund 10 if it needs coverage at the end of the year. Fund 10 in Wisconsin school finance is the general operations fund (or general fund) used by school districts to track standard, day-to-day educational and administrative activities, according to the Department of Public Instruction.

Boe explained that this year’s budget includes transferring $1,777,261 from the general Fund 10 bucket to Fund 27 for special education expenses. While the state increased special education reimbursements to 45% for this year, budget forecasting models are advising that number may be closer to 40%, which is what the district has budgeted for. Serving the highest need students does not receive enough state funding; each student is different, so it’s difficult to forecast the cost of that each year, Boe added.

District Administrator Jim Reif said the money for special education reimbursement is put into one big pot by the state, then every district draws from it. The state has not historically increased this number to keep up with inflation.

The district projects deficit spending to be $293,439, which would have to come out of the Fund 10 balance, which would bring the fund balance down to 31.54%. Board policy says the fund balance must be remain at 20% or higher.

“The mill rate’s going down, but we know that’s not going to directly translate into people’s taxes because property values go up to offset that. But given that the model hasn’t kept pace with inflation since 2008, the model also greatly impacts the negative districts with declining enrollment like us,” Reif said.

Board Treasurer Vicki Rudolph noted that food and gas prices are hitting residents hard, and for the district that hit is even more sizable

Board member Brad Stubbe said even if the district gets extra money for any reason, it should continue to “run lean.”

“We got a lot of really tough decisions to make in the next few years, so running lean and trimming where we can today is only going to help us later on, and just being transparent to the public of how we’re spending their money is going to be critical,” Stubbe said.

Board President Mike Matzek noted that the budget is about $550,000 more than last year’s, but that’s not even at the rate of inflation. Diesel prices and utility costs alone have gone up more than the inflation rate.

“On top of that, we added a pretty significant healthy increase for teacher salaries which was intentional and we had this conversation last year to try to do whatever we could to make our teachers’ salaries competitive,” Matzek said.

As for the deficit, Matzek pointed out that the board never wants to spend at a deficit, but they knew this was coming. State funding simply doesn’t keep up with inflation. Revenue went up less than $50,000, when the district is budgeting for diesel prices increases of 15% (to be on the safe side).

Reif said he and his team looked at outside sources, such as hiring outside consultants, when considering places to cut. He also spoke about a $70,000 budget per year for potential lawsuits, which he recommended leaving in the budget.

Next week, the Journal’s coverage of the Oct. 28 board meeting will continue.