A drop of more than $2 million in state aid will land directly on local property taxpayers this year. School District of Rhinelander officials say a state funding formula that penalizes districts with shrinking enrollment and rising property values is to blame.
Electors at the School District of Rhinelander’s annual meeting Monday approved a 2026-27 tax levy of $33,949,878 by unanimous voice vote. That is up $3,562,238, or 11.73%, from last year. The Board of Education then met in special session and approved the levy, a $39.9 million general fund budget and a $2 million line of credit for cash flow. Most of the discussion at the annual meeting centered on the state aid formula and the district’s declining enrollment.
“As property value keeps increasing, enrollment declining, and more property value per student, so we get less and less state aid every year based on that formula,” said Bob Thom, the district’s director of business services.
State aid at a low ebb
State aid counting toward the district’s revenue limit falls to $5,313,480 this year, from $7,337,965 in 2025-26. That aid now covers 16% of the district’s $35,270,358 revenue limit, down from 22% last year. By the packet’s figures, it is the smallest share since 2017-18. Property taxes cover the other 85%.
Thom said that decrease “goes directly onto the tax levy.”
The district’s revenue cap, set by the state, rises just 2.43% this year. Thom said that compares with a 20% increase in health insurance and a 7% increase in busing costs.
“When the state is telling you you need to live on 2.43%, it gets pretty difficult,” he said.
He credited the operational referendum voters passed in April 2025 with “keeping things afloat.”
Voucher costs double
Thom said the district’s share of the cost of private school vouchers rose to about $485,000 this year, up from about $230,000. He said Nativity of our Lord Catholic School joined the voucher program. Combined with the state aid loss, that is about $2.5 million added to the levy, Thom said.
“That is not extra revenue for the school district,” he said. “It’s just straight out money that our property taxpayers are going to have to pay to keep us in the same place we were at last year.”
Asked whether voucher students had left the district, Superintendent Eric Burke and Thom said most were likely already attending private schools or had been homeschooled. Thom said the state doesn’t report those figures. Thom noted that some districts, including Wisconsin Rapids, are seeing voucher costs in the millions.
1,000 fewer students
Board member Ron Lueneburg said the trends since the early 2000s are “staggering” and asked whether staffing has kept pace with the loss of students.
The district’s three-year average enrollment used for its revenue limit is 2,292 this year. It was 3,311 in 2003-04, a drop of 1,019 students, according to district figures.
Burke said the district cut about 12 positions through attrition last year. He said it also added positions the state now requires or students need, including reading interventionists under Act 20, social-emotional learning coaches, instructional coaches and security staff.
“Back in 2003, we didn’t have those supports,” Burke said.
He said the district aims to keep classes under 20 students in the primary grades and under 25 in higher grades.
Board member Judy Conlin said declining enrollment is spread across grades, which makes positions harder to cut.
Thom said many costs stay the same no matter how many students attend.
“Maybe the bus had 60 kids on it then. Now it only has 45, but you still have to run the same bus route,” Thom said. He said the same is true of heating, cooling and maintaining buildings.
‘No rhyme or reason’
Asked by board chair Ron Counter whether his colleagues statewide can explain the formula, Thom said this year’s drop was much bigger than he expected.
He recalled 2022-23, when the district’s state aid share jumped from 17% to 31% in a single year. He said state officials confirmed the number was correct but couldn’t tell him why.
“It just seems like there’s no rhyme or reason to it,” Thom said.
Conlin said that when the district first testified before the Legislature’s finance committee, Whitefish Bay received the same percentage of state aid as Rhinelander. Now Whitefish Bay receives more, despite much higher incomes, she said.
Burke said the funding formula is where any change would have to start.
“When our state aid reduces by $2 million, that’s impacting the budget more so than class size,” he said.
Thom urged residents to contact their legislators. “It doesn’t give us any more money to spend,” he said. “It just goes straight on the tax bill, and there’s nothing we can do about it.”
Special education
Conlin noted the state has a large budget surplus but the Legislature did not raise special education funding as much as expected. The member said doing so would put every district in a better financial position.
The district’s general fund will transfer $4,715,073 to special education this year, up from $4,276,231. Total special education spending is budgeted at $9,116,681.
About 16% of the district’s students receive special education services, roughly 2 percentage points above the state average, according to Ryan Ourada, the district’s director of instruction.
Few taxpayers attend
Lueneburg noted the room was filled with board members and staff, not members of the general public. He said towns, the city and the county have held the line on their levies, while the school levy rises “virtually every year.”
“It would help to have more people weighing in rather than just the board members,” the member said.
Conlin responded that the district has been fiscally responsible. The member said voters have passed referendums by 60% to 70%, and recalled full auditoriums in the 1990s. Low turnout, she said, reflects confidence in the board.
What it means for tax bills
The district’s mill rate rises 14 cents, from $7.63 to $7.77 per $1,000 of equalized value. Thom said that adds $14 on a $100,000 home and $28 on a $200,000 home.
Individual bills will depend on where taxpayers live. The city of Rhinelander’s equalized value fell this year, to about $799.5 million from about $872.3 million, shifting more of the levy to surrounding towns.
The city’s share of the school levy drops to about $6.21 million, from about $6.78 million. The town of Woodboro’s share rises to about $2.65 million, from about $2.4 million.
Districtwide, equalized value rose 9.69%, outpacing the statewide increase of 7.08%.
Budget details
General fund revenue is essentially flat at $39,897,499, compared with $39,233,500 last year. Budgeted spending is $39,930,883, down from $40,729,993.
Thom said 2025-26 spending included a roughly $1.2 million year-end health insurance adjustment. He said the district has changed its health plan to hold down costs, and recent claims look better.
The small gap between revenue and spending comes from fund balance. The general fund balance is projected to end the year at $2,999,780. The treasurer’s report shows the fund balance at 16% of expenditures, below the 31% to 50% range the strategic plan considers exceeding expectations.
The community service levy rises to $2.1 million from $1.4 million. Thom said that fund, which sits outside the revenue limit, covers the dome, school resource officers and community education programs. The fund ended 2025-26 about $29,000 in the red. The rest of the levy includes $29,841,878 for the general fund, $1,893,000 for referendum debt and $115,000 for non-referendum debt. Total district debt falls to $22,889,000 from $23,811,000.
Thom said the district’s building project is wrapping up, cutting total spending across all funds to about $53.9 million from about $70.4 million.
He also said the food service fund balance fell to about $190,000 from about $342,000. The district plans flyers and family reminders to boost participation in free breakfast and lunch.
Line of credit
The board approved a $2 million line of credit with Associated Bank-Rhinelander. Thom wrote in a memo that the bank would charge the market rate plus 2.25% for a one-year term.
Thom said that with less state aid, the district now depends more on tax payments, which don’t arrive until January and February. He expects tight cash in late November and December, and again in July and August.
“It’s not like we’re going to borrow it and hold it the whole year,” Thom said. “We’re going to try and minimize it as much as possible, but we need to be prepared in case we do.”
In other business, electors accepted the treasurer’s report and approved four other routine resolutions by voice vote. They cover board travel reimbursement, legal action, student walking distances and setting the next annual meeting for 5:30 p.m. Monday, Oct. 25, 2027.
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