Gilbert district faces $6.9M gap in 2026-27 budget plan

By Tom Blodgett
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Gilbert Public Schools leaders are proposing a balanced fiscal year 2026-27 budget that includes employee raises but relies on a mix of cuts, one-time funds and cautious assumptions to close a nearly $7 million gap.

District officials outlined the preliminary plan during an April 14 governing board work-study session, describing a financial picture shaped by declining enrollment, rising costs and uncertainty at the state level.

The projected preliminary budget shows $272.25 for maintenance and operations and $57.17 for capital. The current budget is at 275.26 for M&O and $63.22 capital.

“As we roll through the school year … this is something we've been talking about probably since December,” Superintendent Shane McCord said. “We don't know when the legislature will have a final budget.”

Enrollment decline drives revenue drop

At the core of the district’s financial outlook is a projected loss of about 1,200 students, split evenly between elementary and high school grades.

That decline translates to fewer state dollars, reducing the district’s maintenance and operations budget capacity by about $3 million year over year.

Officials said they intentionally budget conservatively to avoid midyear cuts.

“I think it's a smart way to budget just for the mere fact that you're not covering your losses later that you didn't project for,” McCord said.

Rising costs outpace revenue

While revenue is projected to decline, costs are increasing across multiple areas.

District leaders estimate about $4.6 million in nondiscretionary increases, including higher medical insurance premiums, inflation in fuel and utilities, and potential minimum wage adjustments.

At the same time, the district is proposing roughly $5.8 million in employee-related increases, including a 2% raise for all staff and potential pay adjustments for campus security positions.

Officials said staffing challenges in that area prompted the review.

“We're having a difficult time keeping them, so there's a lot of turnover in campus security,” Associate Superintendent Bonnie Betz said.

Savings help offset shortfall

To help close the gap, the district is projecting about $7.1 million in savings.

Those reductions come primarily from staffing adjustments tied to declining enrollment, as well as district office cuts, turnover savings and the closure of Pioneer Elementary.

Over the past several years, officials said the district has been steadily “right-sizing” its workforce to match enrollment trends.

“Public schools has worked very, very hard at right sizing,” Betz said, noting the district has achieved more than $20 million in staffing-related savings over time.

Balancing the budget

Even with those savings, the district still faces a projected deficit of roughly $6.9 million.

To balance the budget, the proposal relies on a combination of ongoing funding shifts and one-time dollars, particularly from the classroom site fund.

Officials acknowledged that using one-time funds to support ongoing expenses carries some risk but said it is manageable in the short term.

“I feel like it's a calculated risk based upon the available monies that we have today,” Betz said.

The approach could draw down those reserves over the next four to five years if trends continue.

Capital funding declines

The district is also anticipating a reduction in unrestricted capital funding, with preliminary estimates showing a drop of about $6 million compared with the current year.

That decline reflects lower student counts and adjustments in state funding formulas.

Still, officials noted they have some flexibility in how those funds are allocated, including whether to shift dollars between capital and maintenance budgets.

Risks and uncertainty ahead

District leaders emphasized that several variables could significantly change the budget outlook.

Among the biggest uncertainties are final state budget decisions, the future of Proposition 123 funding, inflation levels and whether enrollment declines accelerate.

“We don't know whether it's going to be an ongoing or a one-time or what it might look like when the legislature is done,” Betz said.

Despite those unknowns, board members expressed confidence in the district’s conservative approach.

“I do feel like because we are so conservative in our budgeting and our estimates, when we finally get everything settled for that year, we usually come out about right or a little bit ahead,” Board Member Jill Humphreys said.

The governing board is expected to revisit the proposal in the coming weeks, with a decision on pay increases likely to come first.

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Tom Blodgett
Senior News Editor | Gilbert

tblodgett@iniusa.org

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).