The Madison Metropolitan School District is building its 2026-27 budget around a state promise that has not yet been fully funded: increasing Wisconsin’s reimbursement for special education costs from 38% to 45%. The district’s preliminary $609 million budget assumes lawmakers and the next governor will make good on that commitment after the Nov. 3 elections. For Madison, the increase would bring in more than $5 million, according to Bob Soldner, the district’s assistant superintendent of financial services. That is roughly enough to cover scheduled pay raises for all district employees. The state set aside too little money to cover the full increase based on the costs school districts have reported. Because Wisconsin public schools are legally required to provide special education services, districts must make up the difference with money intended for other priorities, including local property tax revenue. Madison spent about $62 million from its general fund on special education last school year. About 4,260 students — 17% of district enrollment — had a disability, according to state figures. Over the past 25 years, state special education aid rose about 82%, while school-reported costs increased about 103%, according to the nonpartisan Legislative Fiscal Bureau. The gap has left districts vulnerable to changes in state policy and annual budget decisions. “Our hope is … the new Legislature and the new governor are going to live up to the commitments and fully fund what they said they’re going to fund,” Soldner said. “That’s a big uncertainty.” The uncertainty could continue through spring 2027, when the district expects to have a clearer indication of whether lawmakers will act. If the additional state money does not arrive by the end of the school year, the Madison School Board could use emergency reserves to pay for employee raises, Soldner said. But that would eliminate a one-time financial safeguard and create immediate consequences for future budgets. The funding question is central to the statewide campaign for governor and control of the Legislature. Republicans have held majorities in the Assembly and Senate since 2011, while Democrats are seeking to win both chambers in November. A bipartisan agreement negotiated by Democratic Gov. Tony Evers and Republican legislators earlier this year would have devoted $315 million to special education and another $300 million to general school aid. The proposal failed in the state Senate, despite an anticipated $2.5 billion surplus. Madison Superintendent Joe Gothard supported the plan, saying its collapse left school leaders without a clear path forward. “I wasn’t so upset with the ‘no.’ I can get over a ‘no’ … but there was no next step,” Gothard said. “Here’s how we’re going to continue to support public education.” Milwaukee County Executive David Crowley, the Democratic nominee for governor, was the only Democratic candidate in the primary to support the failed agreement. Crowley has pledged to raise the state’s special education reimbursement rate to 90% and increase broader public school funding if elected. Republican nominee Tom Tiffany criticized the agreement and has said he would increase special education reimbursement, but he has not specified a target rate. Madison’s financial pressure is also being felt locally. Property taxes provide nearly three-quarters of the district’s operating revenue, a larger share than in many other large Wisconsin districts, according to district officials. The district raised its levy 20.4% last year after Madison voters approved $607 million in two school referendums — the largest levy increase in more than 30 years. Gothard said some residents have told the district the tax burden is unsustainable. At the same time, he said the district has avoided more visible cuts in part by leaving some vacant student-support positions unfilled, even as the need for those services remains. About 80% of the district’s spending goes to employee salaries and benefits. The Wisconsin Policy Forum found that staffing grew faster than enrollment over the past decade, driven largely by increases in non-union professional positions. Teacher and student-support positions declined slightly. Gothard said the district has added professional staff in response to student mental health needs, achievement gaps and a School Board policy aimed at reducing class sizes. Those investments require additional personnel and space even as enrollment falls. The School Board is expected to approve the final 2026-27 budget Oct. 26, after reviewing the results of the district’s annual enrollment count.