Kyrene School District is exploring its maintenance and operations budget projections for the coming school year, specifically taking a look at the different aspects of its general fund.
Funding discussions have continued to filter through Arizona’s school system since January, now making their way to the local level as Valley school districts allocate money for their 2023-24 priorities.
During the Kyrene School District Governing Board’s March 28 study session, district Chief Financial Officer Chris Herrmann shared where staff is in drafting the new budget, focusing specifically on maintenance and operations dollars.
Going over the budget timeline thus far, the district identified its strategic plan priorities for the 2023-24 year in the fall. Gov. Katie Hobbs released her budget proposal in January — leaving the district from February to May to consider enrollment and revenue projections, capital projects, staffing and departmental costs.
Herrmann showed that the district has completed its enrollment projections so far.
Kyrene receives both governmental and proprietary funds, with the former accounting for more than 90% of the district’s revenues.
“In subsequent board presentations throughout the spring, we’ll provide updates for those remaining fund types,” Herrmann said.
The March 28 discussion focused on the district’s general fund, which includes other types such as maintenance and operations, advertising and unemployment insurance.
While there are different types of funding going into the general fund, Herrmann said that M&O makes up roughly 99% of the total general fund revenue. This category places dollars towards areas such as teaching, learning and specialized services for students with higher needs, among others.
“The total M&O revenue does not represent just one amount or just one calculation, as you can see listed on this display,” he said.
Given the weight that M&O carries in the district’s overall budget, Herrmann showed how M&O fund projections are made through a tiered system, tabulating its base funding received first and then the revenue control limit to find the annual “imminent override” and capital override limits.
Concluding with the total budget, staff adds any additional funds that the district can expect to receive.
General fund and M&O
Herrmann shared preliminary estimations for the total general fund revenue, which, like the others, showed a slight decrease, in comparison to the prior year’s $114.7 million recorded.
“The general fund is estimated to be $114.1 million, which is almost $600,000 less than last year’s budget, so that’s a lot of numbers, that’s a lot of assumptions,” he said.
Focusing on M&O, its funding for base support is calculated using the weighted student count, the amount base level funding per pupil, the Teacher Experience Index and dollars received from non-federal audit services.
For the projected numbers for 2023-24, Kyrene has estimated that it will have $89.9 million for the base support level, which is slightly lower from the 2022-23 budget that had calculated $90,932,685.
The 2023-24 revenue control limit is also down from $96.2 million the previous year to $95.1 million.
The total M&O budget for the coming school year has been estimated to be $112.5 million, another decrease in funds when compared to 2022-23 where the district had $133.5 million.
Herrmann noted that the total includes the base support and revenue control limits, but also additional funding received such as dollars from the District Additional Assistance override.
The DAA override in particular has been deemed a risk factor by the auditor general since 2020, requiring the district to use no more than 25% of capital funds for the category.
Assuring that the district’s 2023-24 numbers are below that limit, he added that DAA allocation will not be finalized until the capital plan is presented in May, leaving the district time to make adjustments.
What’s causing budget impacts?
Herrmann also provided interpretations of 2022 demographic data related to impacts seen in M&O, which he said “is still consistent with current trends that (they’re) expecting for next year.”
Notably, they believe Kyrene is experiencing declining enrollment because of factors like plummeting birth rates across the state. In Maricopa County, birth rate dropped by 19% during the 2008 recession and has continued to drop at varying rates, likely impacting kindergarten enrollment for later birth years.
“Kyrene has experienced that situation for several years now as our incoming kindergarten classes have typically been much smaller than the previous year,” Herrmann said.
Another impact to classroom size analyzed was housing, specifically lacking neighborhood turnover. Despite the population showing “modest” rates of growth, Kyrene students are declining because of affordable housing shortages and an aging population staying put.
In the 2022-23 school year, Kyrene recorded an over 400 student difference between its kindergarten and eighth grade student headcounts, marking 1,339 in kindergarten and 1,800 for eighth grade.
While smaller class sizes might be a relief for teachers managing their workload, lower student enrollment corresponds with likely impacts to the dollars received by the district.
In the resulting discussion with the governing board, Herrmann and the district officials talked more about enrollment numbers and how that ties into budget projections, also touching on previous years’ emergency funding,
Board Vice President Michelle Fahy asked Herrmann if they had calculated the dollar amount for the full-time equivalent difference in declining student enrollment, which he was not able to answer.
But, Superintendent Laura Toenjes clarified that the district has been working on adjusting their formulas each year, taking into account what they’re aiming for in a given year. This year, she said the team looked at targets for kindergarten through second grade, applying them to 2023-24.
Toenjes said that they’d be able to bring back Fahy’s numbers at a later date, adding that “children don’t come in neat little packages,” so sometimes calculations have to be updated to account for unique situations.
Board President Kevin Walsh concluded the meeting, saying that he looks forward to their continued budget conversations over the next few weeks.
Reporter Caroline Yu can be reached at cyu@iniusa.org. To voice your opinion on this story, connect with us at AzOpinions@iniusa.org.
Meet Caroline Caroline Yu joined Independent Newsmedia, Inc., USA, in 2020 as a summer intern covering Scottsdale. As an intern, she continued her coverage of Scottsdale, Paradise Valley and Tempe. After graduating in 2022, Caroline became a full-time reporter for Scottsdale and Paradise Valley. She is currently reporting for the Tempe market.
Community: She is a supporter of the environment and tries to get involved with related community events.
Education: Arizona State University with a BA in Journalism and Mass Communications, with a minor in French.
Random Fact: She used to be a ballet dancer for 10 years.
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