A decline in enrollment this school year is leading Higley Unified School District to anticipate revising its fiscal year 2023-24 maintenance and operations budget downward.
The district also anticipates its fiscal year 2024-25 maintenance and operations budget will increase despite figuring in a further enrollment decline.
Tyler Moore, Higley USD’s chief financial officer, gave that financial forecast to the governing board at its Jan. 17 meeting.
Officials project the district, which passed a $124.79 million M&O budget last June for FY 2023-24, would have to reduce that to $122.29 million for a state-required budget revision in May.
That is largely based on a 1.5% reduction in average daily membership, an enrollment-based number that is a key figure in the state’s education funding formulas. ADM is the total enrollment of fractional and full-time students, minus withdrawals, of each school day through the first 100 days.
Moore said the district has particularly seen declines in preschool and kindergarten through eighth grade enrollment, though the district does not get funding from the state for preschool students.
Its high school enrollments, on the other hand, are growing, Moore said.
Moore showed a comparison to neighboring districts and charters that showed Higley’s decline was less steep than most neighboring districts and charters, with the exceptions being Benjamin Franklin Charter School and Queen Creek Unified School District.
The budget balance carry forward also shrank from June’s final adopted budget from $23.7 million to $22 million.
For the FY 2024-25 forecast, the district is projecting another loss of 50 students in ADM. However, with an anticipated 2% inflation adjustment to the state’s base level support per student, small decreases in retirement system contributions and a smaller transfer of M&O funds to the capital budget, the district’s initial projection for its M&O budget next year is $125.85 million.
The district has for the past decade usually transferred money from M&O to capital to cover the costs of its middle school leases, a capital expense. Last year’s transfer was $5.6 million and included some money for major capital projects, but Moore said the transfer next year would only cover the leases.
The anticipated budget balance carry forward would remain at $22 million.
Asked by Vice President Anna Van Hoek what the district would do if the Arizona Legislature failed to waive the aggregate expenditure limit — the amount of money K-12 schools are allowed to spend each year under state law — Moore said the district has enough money in budget balance carry forward to cover what would be a last-minute shortfall from AEL-induced cut.
Since Arizona revised what monies count toward the AEL, the legislature has had to waive the limit the past two sessions for schools to avoid drastic cuts. Moore said the district expects the legislature to do so again this spring.
“There is no permanent fix right now, but it has over the last two years to be a practice that the legislators have utilized the AEL exemption, a single-year exemption, in budget conversations when either approving bills or in the legislative process. So I do foresee that being the case of at this year, and it hopefully does not become a bargaining chip for some of the bills that are being proposed.”
Moore said several fixed cost increases are unknown at this point, including property casualty insurance, worker’s compensation, utility rates, amount of staffing and compensation increases.
The district plans to bring back the M&O projection for a second look Feb. 21 and ask for tentative approval from the board March 6. Its capital budget review will begin Feb. 21. The final budget public hearings and approval will be in June.
We would like to invite our readers to submit their civil comments, pro or con, on this issue. Email AZOpinions@iniusa.org. Tom Blodgett can be reached by email at tblodgett@iniusa.org or follow him @sp_blodgett on X.
Meet Tom Tom Blodgett joined Independent Newsmedia, Inc., USA, in 2022, when the company acquired Community Impact Newspaper's Phoenix-area properties. Raised in Arizona, he has spent more than 35 years in journalism in the state.
Community: He has served as an instructional professional in the Walter Cronkite School of Journalism and Mass Communication since 2005, and is editorial adviser to The State Press, the university's independent student media outlet. He also is director of operations for an 18U girls fastpitch softball team from Gilbert.
Education: Arizona State University with a BS in Journalism.
Random Fact: He lived in Belgium during his freshman year of high school.
Hobbies: Tweeting enthusiastically about ASU softball (season-ticket holder) and grumpily about other local sports (pessimistic fan).
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