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Operational referendums allow school districts to exceed their state-imposed revenue limits, which cap what districts can collect in revenue through general aid and property taxes. These funds may be used for operational costs such as staffing, equipment, and services.
An operational referendum is different from a capital referendum, which allows school districts to borrow money for construction, renovation, or other building projects. Capital referendum debt is typically paid off over a specific length of time, and those funds cannot be used for operational expenses.
Wisconsin public schools seek operating referendums primarily because of a structural mechanism built into state law known as state revenue limits. State revenue limits were implemented in 1993 as a cap on the total revenue a school district could collect per pupil. State revenue limits were implemented in 1993 and represent the total revenue a school district can generate through local property taxes and state aid on a per-pupil basis.
The baseline for each district's revenue limit was set according to what they were spending in the early 1990's, effectively locking in the historical funding disparities between districts.
Key Point: Current public school district per-pupil funding is not based on the quality of education or student success. It's based on the amount of money a district was spending in the early 1990's. For the OASD, which was working hard to keep spending low, that locked us into being a low-funded district for the next 30+ years.
Without local voter approval through an operating referendum, school districts are legally capped in the total amount of money they can raise from state aid and local property taxes combined.
The State funding inadequacies are affecting all Wisconsin public school districts. As of November 2023, 82% of the 421 public school districts in Wisconsin have sought an operations referendum at least once since state revenue caps were introduced. In 2023, 35 school districts held an operational referendum; in 2024, 148 districts held an operational referendum; and in 2025, 62 school districts held an operational referendum.
The OASD has a decades-long record of responsible spending, proactive financial planning, and prudent budget management. Thanks to that work, we have been able to hold off on an operational referendum much longer than many area districts. We have exhausted the spending reductions and budget cuts that do not impact the student experience. We are seeking an operational referendum to close the budget deficit. Without closing the deficit, we will need to make changes and reductions that will impact the educational experience.
If the operational referendum fails, we anticipate an approximately $3 million structural deficit for the 2027-2028 school year, with additional structural deficits anticipated in all of the coming school years.
Most operational efficiencies have already been made over the last four years, so creating a balanced budget will likely require an increase in class sizes and a reduction in programs and services at our intermediate schools and high school.
The district has reduced staffing by over 49 full-time equivalent positions, maximized efficiencies in services like busing, food service, and technology, and cut budgets for schools, departments, and capital projects.
From 2020-2022: Following the COVID-19 pandemic, the district was able to manage inflationary costs and budget deficits through the strategic use of federal ESSER funds. ESSER funds were a one-time federal investment in schools and could not be utilized for any type of recurring costs.
2022-2023: $1.9 M deficit; closed the deficit through strategic use of ESSER funds, staff attrition, reduced retiree costs, lowered technology lease costs, reduction of open staff positions, and an increase in interest income.
2023-2024: $1.5 M deficit; closed the deficit through strategic use of ESSER III funds, a 6.45 staff FTE reduction, additional efficiencies in technology lease costs, reduced school and department budgets, and delayed necessary vehicle replacement.
2024-25: $2.4 M deficit; closed the deficit through strategic use of final ESSER III funding, a 6.48 staff FTE reduction, further reduced school and department budgets, reduced retiree costs, reduced capital projects budget, and achieved an increase in interest income.
2025-26: $2.3 M deficit; closed the deficit through a 17.22 staff FTE reduction, reductions in employee health care benefits, again reduced school and department budgets, and reduced retiree costs.
2026-27: $3.2 M deficit; closed the deficit through a 19.24 staff FTE reduction, further reduced school and department budgets, reduced retiree costs, and reduced the capital projects budget.
The referendum is structured to close the anticipated budget deficit for each of the next five years. If the deficit is closed, the district will be able to maintain current class sizes, support our unique career pathway opportunities, maintain robust academic and career course offerings, sustain partnerships across the community, and compete for talented staff.
Operational referendum funds must be spent on operational expenses like staffing, equipment, and services. If the OASD referendum passes, the funds will be used for payroll, utilities costs, insurance costs, and the operational costs for many of our intermediate and high school course offerings.
Inequities in funding across public school districts and other publicly funded options have negatively impacted the OASD. The OASD is one of the lowest-funded districts in Waukesha County, and the district’s revenue limit authority is $1,560 per student lower than the statewide average (equating to $7.5 million in operating funds).
Compared to our closest K-12 neighboring school district, Kettle Moraine School District, the OASD receives $11,763 per pupil each school year while KM receives $14,049 per pupil. That equates to an $11 M difference annually.
OASD enrollment has been modestly declining since the 2016-17 school year.
2017-18: -59 students from previous year
2018-19: -39 students from previous year
2019-20: +18 students from previous year
2020-21: -175 students from previous year
2021-22: -84 students from previous year
2022-23: -18 students from previous year
2023-24: -70 students from previous year
2024-25: -17 students from previous year
2025-26: -41 students from previous year
These declines are spread across all grade levels and schools, so in any given year, a school usually loses only a few students per grade. Losing 1–2 students in a grade level at one school does not always allow the district to close a classroom, eliminate a teaching position, cancel a bus route, or lower utility costs. In addition, operational expenses for heating, electricity, transportation, and classroom materials experience annual inflationary increases, so those costs continue to rise, regardless of minor headcount changes.
Under the state funding formula, a decrease in enrollment means an abrupt decrease in funding, which would be logical if enrollment decreases were centralized on a single grade level, at a single school, and if the number of students decreased enough to close a classroom. Since enrollment declines are never that centralized, the drop in funding far outpaces our ability to cut fixed costs.
The current mill rate estimate for 2026-2027 is $5.65, which is $.14 lower than the mill rate in 2025-26. Because the OASD has aggressively paid off existing debt from previous capital referendums, we are able to moderate the mill rate impact of an operational referendum. Combined with estimated increases in equalized property values, projected mill rates, should the referendum pass, are as follows:
If the Oconomowoc community supports the operational referendum, the estimated mill rates are:
$5.67 for 2027-28
$5.67 for 2028-29
$5.67 for 2029-30
$5.67 for 2030-31
$5.65 for 2031-32
These low mill rates are due to an anticipated increase in equalized property values and a decrease in the district's debt service obligations.
Operational Referendum Estimated Tax Impact for $400,000 Home Based on assessed value, which may differ from fair market value. Assumes a 4% property value increase each year.
The OASD's mill rate is below the statewide and Waukesha County averages and is lower than the mill rate for many area school districts. The 2026 mill rate estimate is $5.65, which is $.14 lower than the mill rate in 2025-26.
2025-26 Statewide Average Mill Rate = $7.09
2025-26 K-12 Peer Area Average Mill Rate = $5.96
2025-26 OASD Mill Rate = $5.79
Our school Parent-Teacher Organizations, athletic program, and arts program booster groups work tirelessly to fundraise for our schools and programs. Those funds, however, cannot cover the foundational school district operational costs. Additionally, we have worked with our state representatives to advocate for potential solutions at the state level, including advocacy for last spring’s bipartisan budget repair bill - that bill was supported by 80% of Wisconsinites, but failed to garner enough support in the state Senate. At this time, an operational referendum is the only state-approved tool available to districts needing to close budget deficits.
The State funding problems are not new, and the OASD School Board and district leadership have been working to manage a budget deficit for several years. The leadership and support of our school board have contributed to our district's ability to manage the ongoing budget deficit for such a long time. However, it has been clear that our budget cuts and spending reductions would eventually reach a point where they negatively impact our educational environment.
For the past several months, the School Board and leadership team have had more frequent and in-depth conversations about the budget. You can read more about the budget meetings on our board meeting website.
The school district was able to sell the former Meadow View property on Brown Street to a residential developer for approximately $2 million in 2025. The proceeds from the sale have been placed in the district’s long-term capital maintenance fund.
