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Show Low board adopts proposed FY 2026 budget amid state funding uncertainty
Summary
The Show Low School District board approved a proposed FY 2026 budget after a presentation from district finance staff that warned of reduced state and federal grants, a $5 million estimated carryforward and planned local cost increases tied to salary and benefit changes.
The Show Low School District board on Monday approved the district's proposed fiscal year 2026 budget after a presentation from finance staff that described a shifting state funding picture and year-to-year accounting changes.
Kaylee Davis, who presented the budget to the board, said the district is projecting “flat” enrollment and an estimated carryforward of about $5,000,000 but cautioned the numbers are preliminary and subject to change once the annual financial report is completed in October.
Davis told the board that the Arizona Department of Education has changed the budget forms this year (adding a line for carryforward on page 2, line 31), which separates prior-year carryforward from the new fiscal-year line items and makes year-to-year comparisons appear skewed. She also outlined several revenue and cost drivers: flat per-pupil counts, no anticipated increase to capital (per-pupil) funding, the Teacher Experience Index declining slightly, and grant reductions the district expects to absorb in maintenance and operations.
The presentation listed a number of projected expenditures and pressures: a classified-staff average pay increase tied to the salary study (about a 14% increase, shown as roughly $569,000 in the presentation), a projected 9% rise in health insurance premiums (presented as about $357,000), a $2,000 per-FTE increase in classroom base pay for teachers and counselors (presented as roughly $366,000), and an administrative pay increase of about 4% (presented as about $115,000). Davis and staff also said federal and state grant lines are expected to decline compared with the prior year — the packet listed an estimated total reduction of roughly $473,000 across grants including the loss of a rural and low-income grant.
On state-level items, the presentation discussed Proposition references affecting education funding and described political uncertainty around renewal and supplemental funding; Davis said some proposals may go to voters this fall and that the timing and final amounts remain uncertain. The district staff told the board they will adopt the budget in July and may revise it after the legislature and state education agency finalize allocations.
Board members asked questions about the district's cash position and what a late state payment would mean; staff said the district currently has sufficient cash to manage delayed state payments but that the practice of late payments has eroded cash balances statewide.
A board motion to approve the proposed FY 2026 budget as presented was made and approved by the board (motion passed). The packet and presentation materials included line-item summaries for maintenance & operations and capital funds, grant schedules, and proposed staffing/compensation adjustments. Staff said the final adopted budget will be returned to the board in July and a revised budget can be presented in September after state actions are finalized.
