The issue of how much money to have in case of emergency became enough of a concern that the Milwaukee Public Schools’ Board of Governance included it as a topic for a study of the district’s financial stability. The contract for that study was awarded to Robert W. Baird & Co. last week.
“One of my concerns is MPS fiscal stability, and I was concerned about the lack of reserves,” said board member Michael Bonds, chairman of the finance and personnel committee for the district.
But there’s a problem with Bonds’ desire to build up the district’s reserves, which now stand at about $83 million or nearly 8% of the annual operating budget.
State aid is awarded based on prior year spending. That means low property-value districts such as Milwaukee will have to rely more on local property taxes for revenue if they save more and spend less.
Even so, saving money was important enough to the Racine Unified School District that its voters passed a referendum in 2000 to add $1 million a year to its cash reserves, which now stand at $18.5 million.
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