MMSD Budget 101: How the Madison Community Supports our Schools

The Madison Metropolitan School District Board of Education has approved the 2025-26 budget, which includes $678 million in spending on staff and students.

But where does that money come from, and where does it go after the budget is approved?

Where Does MMSD’s Revenue Come From?
MMSD, like every other school district in Wisconsin, has a cap on how much money it can raise to fund all 52 schools in the district.

The first step in the process of creating the budget is to determine the revenue limit, which is a state-imposed control on the amount of money a district can raise. Revenue limits are calculated based on the three-year student enrollment average and the state budget.

MMSD saw a very small decline in enrollment of 85 students in the 2025-26 count compared to the year before, while the three-year average declined by 11 students. Student membership for 2025-26 sits at 26,202, while the three-year average is 26,226 students. Both counts include a portion of MMSD summer school programs and independent charter schools.

Assistant Superintendent of Financial Services Bob Soldner noted that the majority of MMSD’s budget is tied to property taxes (about 90%), while a much smaller amount comes from state general school aids (about 10%).

“The bottom line is that our community is supporting our schools,” Soldner said. “We are grateful to have a city that consistently recognizes how important our schools are to Madison.”

Due to a partial veto of the 2023-25 state budget, school districts around Wisconsin are allowed to increase their revenue limit by $325 per-student until the year 2425. MMSD can also raise additional revenue through referendums, such as the $607 million referenda passed by Madison voters in 2024 that provided both additional operating dollars and the funds to replace or renovate 10 aging schools.

General school aids from the state are calculated using a different formula. Because property values vary widely across the state, school districts differ in their ability to raise property tax revenue for education. State aid is designed to compensate for that difference.

Since the property value around MMSD is well above the state average, the district gets only a small percentage of general school aids from the state, and the amount can differ from year-to-year. MMSD gets about 10% of its revenue from general state aids, while the other four largest districts in the state get about 60% of their revenue from state aid.

Although the state has not kept up in sharing the costs of public schools, the 2025-27 state budget provides for an increase in special education funding.

To calculate the final impact to property taxes, MMSD uses the following formula: Revenue Limit - General State Aids = Property Tax Levy. For the 2025-26 school year that amounts to about $478 million paid by Madison tax payers.

MMSD’s total tax revenue increased by about 20% this year, due in part to the referenda passed in 2024. That averages out to an increase to $10.14 per $1,000 in property value, or about $683.93 for the average city of Madison homeowner — lower than initial estimates of $1,000.

Where is Revenue Spent?
Once the MMSD budget is approved and the tax levy is finalized, your money is put to work. 

With more than 4,200 staff members, about 81% of the 2025-26 operating budget goes toward compensation, with roughly 56% going toward salaries and wages and another 25% toward benefits like healthcare.

In response to concerns shared by staff regarding salary compression, the Board and district administration have begun a comprehensive review of pay structures. The goal is to develop equitable, long-term solutions that reflect the value of employees’ experience and service.

MMSD has issued a Request for Proposals (RFP) to conduct a comprehensive compensation and classification study according to Jennifer Trendel, senior executive director of human resources. 

“The study will begin with the teacher group as the initial focus and will examine salary compression, market competitiveness and the financial impact of potential adjustments,” she said. “This is a complex and detailed process that will take time to complete thoughtfully and equitably to ensure meaningful and sustainable outcomes.”

Calculating the costs associated with various remediation strategies will be part of the 2026-27 budget process.

The other 19% of the 2025-26 budget goes toward day-to-day operations, encompassing everything from a new set of classroom crayons to maintenance work to building improvements.

It also includes funding high-priority projects, like:

• Expanding 4K programs ($2.1 million)
• Building out MMSD’s “Grow Your Own” program that helps our staff access financial aid to achieve a bachelor’s or master’s degree in areas like special education ($1.7 million)
• Hiring additional custodians to maintain renovated buildings ($917,000)
• Increasing multilingual programming ($519,000)
• Maintaining low class sizes for kindergarten and first grade ($315,000)

“We have worked really hard, especially with rising costs for health insurance and some other things that are out of our control, to prioritize our employees,” Board President Nichelle Nichols said. “I’m really proud of the fact that we have a balanced budget, and that we are in a good position, as stewards of the referendum dollars that our community has entrusted to us, to move this district forward.”

In all, the 2025-26 budget keeps MMSD on strong financial footing. After the year's expenses are paid Soldner projects a general fund balance of $78.8 million, while continuing to hold top bond ratings.

Looking Forward
However, the future is more difficult to predict. In their 2025-27 budget, the state legislature appropriated no new money outside of special education reimbursement, which taken in account with inflation means a decrease in overall aid.

The federal government, though responsible for a very small percentage of the overall budget, is also contributing to uncertainty. Initial projections have us set to receive 2% less from the federal government than we did a year ago.

For example, in the past the U.S. Department of Agriculture has reimbursed schools some of the cost to source local ingredients for school meals, but that program was cancelled back in March.

“When voters passed our referenda in 2024, we assumed that the federal and state government would maintain, or even slightly increase, their commitment to public education,” Soldner said. “We did not build in a reduction of millions of dollars, which means we might need your support to keep critical programs that our students rely on running.”

In the meantime, Soldner said the 2025-26 MMSD budget puts the district on a good path that will allow for a quality education and financial flexibility moving forward.