Deficit Spending: Declining Madison School District Equity Fund Balance

Fund Balance as Percent of General Fund Expenditures
FY 2000 Thru FY 2006
Source: Wisconsin Taxpayers Alliance
FY 00 FY 01 FY 02 FY 03* FY 04 FY 05 FY 06*
K-8 AVERAGE 22.4% 15.7% 20.3% 18.0% 20.2% 20.0% 18.6%
UHS AVERAGE 24.1% 22.3% 23.6% 21.2% 25.8% 25.4% 22.6%
K-12 AVERAGE 15.2% 23.9% 15.1% 13.8% 14.5% 14.7% 13.4%
MMSD ACTUAL 18.9% 16.4% 12.1% 12.2% 7.7% 7.1% 7.1%
MMSD Budget $252M $333M
Equity Fund (M) $48M $24M


The Administration used a “salary savings” account to “balance” the budget. When such savings did not materialize, the MMSD’s equity (the difference between an organization’s assets and liabilities) declined.

Interestingly, Madison School Board members Beth Moss, Carol Carstensen and Maya Cole have advocated the continued reduction in the District’s equity as a means to help balance the 2007 / 2008 $339M+ budget. Beth proposed budgeting an additional $2.133M in “salary savings” above the planned $1M while Carol sought $2M and Maya asked for an additional $500K. [Board member proposed 2007/2008 budget amendments 540K PDF]

Finally, several years ago, I received an email from a person very concerned about the “dramatic” decline in the MMSD’s “reserves”, which according to this person were, at one time over $50M. I asked for additional data on this matter, but never heard from that person again.

The equity fund’s decline gives the MMSD less wiggle room over time, and means that we, as a community face decisions related to facilities, staffing and services. Hopefully, the MMSD board and administration can start to consider and implement new approaches, including virtual learning tools and expanded collaboration with community assets like the UW, MATC and others. I hope that we can move beyond the annual “same service approach” and begin to think differently. Peter Gascoyne’s 5 year approach to budgeting is a good place to start

“[Ask] what is the best quality of education that can be purchased for our district for $280 million a year. Start with a completely clean slate. Identify your primary goals and values and priorities. Determine how best to achieve those goals to the highest possible level, given a budget that happens to be $40 million smaller than today’s. Consider everything – school-based budgeting, class sizes, after-school sports, everything.”

A definition of “equity”. 2007 / 2008 $339M+ MMSD Citizen’s Budget

One thought on “Deficit Spending: Declining Madison School District Equity Fund Balance”

  1. The data tell me that too many districts (not MMSD currently) might be ratholing money. There’s no need to carry over more than 10%-15%. The Legislature should look into this, perhaps cutting money to districts that aren’t spending it on education, and redistributing it to districts that need the money.

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