School board approves balanced budget despite declining enrollment, state aid

The School District of Rhinelander Board of Education approved a balanced $39 million budget for the 2025-26 school year Monday night, Oct. 27, maintaining operations despite significant enrollment declines and decreasing state aid.
Superintendent Eric Burke opened the annual meeting of the electors, held just prior to the board of education meeting, by explaining the financial realities facing the district.
“This balanced budget requires the district’s continued commitment to responsible financial stewardship while maintaining high quality education,” Burke said. “The budget remains somewhat uncertain, (with) uncertainties surrounding federal funding grants and the rising cost of essential services and supplies. The district will need to monitor expenditures carefully through the 25-26 school year to maintain stability and ensure that resources are used efficiently to support teaching and learning.”
Looking ahead, Burke warned of mounting challenges tied to inadequate state funding formulas.
“If you look at 26-27 budget cycle, the district faces ongoing challenges tied to the state’s current school funding, which does not adequately address the unique financial realities of rural and northern Wisconsin school districts,” he said. “Compounding these challenges, the state has not increased school funding in line with consumer price index, leaving public schools struggling to keep pace with inflation while still meeting student needs and maintaining competitive staff compensation.”

Burke also expressed concern about the impact of private school voucher programs on public education funding.
“Another growing concern is the increasing amount of state tax dollars being redirected to private school voucher program, which continue to expand each year,” he said. “These programs have earned millions of dollars from public education, reducing the resources available for districts like Rhinelander that serve all school students, regardless of background, ability or circumstances. As a result, public schools are left to do more with less even as expectations and costs continue to rise.”
Burke emphasized the importance of maintaining quality staff despite budget pressures.
“Staff salaries and benefits, representing the largest portion of our budget, nearly 80 percent, remains essential that we continue to invest in and maintain high quality educators and support staff who are the foundations of student success,” he said. “The district will continue to advocate for a fair and sustainable funding system that meets the needs of all Wisconsin students, rural and urban, and ensures that public schools remain strong, well resourced and able to provide the exceptional education our community expects and deserves.”
He concluded on a positive note about community support.
“Finally, we are fortunate to have a community that has shown support for our system,” Burke said. “We will continue to do incredible things in [the School District of Rhinelander] because of that support.”
The district’s enrollment has dropped from 3,432 students in 2000 to 2,318 students currently, with another 40-45 student decline projected for next year, according to Bob Thom, director of business services. The district has 197 seniors graduating but only 152 first-graders entering the system.
Thom explained the financial strain caused by declining enrollment.
“The issue with that is that schools don’t shrink very well,” Thom said. “You lose 40 kids across the whole district. Your class size goes from 20 to 18, but you don’t save any money. You do lose the revenue for the student right away, and the state funds the money, but they don’t tell you how you’re supposed to save money. You still have to heat the building, still have to plow the snow, but they base your revenue on the number of students, and that’s what makes it difficult to balance the budget.”
The district’s state aid has declined from $7.7 million two years ago to $6.9 million this year, forcing property taxpayers to shoulder more of the burden. State aid now represents just 21 percent of district revenue, far below the state’s promised two-thirds funding level.
“The promise of state aid was two thirds funding, supposed to be 67 percent state aid,” Thom said. “If the state were funding us, our property taxes would be even one third of what they are now, everybody would be really happy.”
He explained that districts in southeastern Wisconsin are receiving increased state aid while Rhinelander receives less.
“We’re paying more in property taxes, because according to the formula, we’re property rich. We have too much property for the number of students, so we get less aid, and as enrollment declines, it just gets worse, because now you’re dividing the property value by less students, so we get less state aid—a never ending cycle,” Thom said.
Property taxes will increase to just over $27 million, representing 79 percent of district revenue. However, the mill rate will only increase 20 cents, from $7.43 to $7.63 per $1,000 of property value—well below the 52-cent increase projected when voters approved the recent building referendum.
The district did receive some relief in special education funding, with state categorical aid increasing from $2.055 million to $2.784 million, with another $300,000 increase expected next year.
Federal funding remains at about $700,000 annually, though uncertainty surrounds future federal education grants amid talk of eliminating the U.S. Department of Education.
“In reality, we get a little over $700,000 of federal money, and it stayed that way for quite a while, and that is a pretty small proportion of our budget, but it still hurts when they take stuff away,” Thom said. “So we’re hoping that things stay the same.”
Staff salaries and benefits represent nearly 80 percent of the budget at approximately $25.5 million. Total instructional costs are budgeted at just under $20 million, with support services including custodians, maintenance, business operations and transportation totaling $13.4 million.
The district is currently spending down its food service fund balance by offering free breakfast to elementary and middle school students.
The approved budget maintains a fund balance of $7.6 million, representing 21 percent of total revenues.