Santa Cruz Valley Unified School District No. 35 board approves 2025-26 tax-rate recommendation to county

On July 22, 2025, the Santa Cruz Valley Unified School District No. 35 Governing Board voted to approve the district'025-26 tax-rate recommendation to the Pima County Board of Supervisors. The board pproved the recommendation after an extended presentation and discussion of how assessed valuation, override buy-downs and bond payments affect local taxpayers.

The board pproved the district—ormal recommendation for next year espite a modest rise in the combined tax rate. Miss Brown, a district staff member presenting the calculation, summarized the board—ormal role: "As Mr. Verdugo mentioned, our role as a school district is just to recommend the tax rate. The responsibility of setting the tax rate is with our Board of Supervisors." The presentation laid out the distinction between the primary rate, which funds routine operations and is partially state-funded, and the secondary rate, which pays for voter-approved overrides and bonds.

Why it matters: The tax-rate recommendation determines how much local property owners will pay to support district operations, the 9% maintenance and operations (M&O) override and bond debt service for recent capital projects including the new aquatic center. The board iscussion also addressed how one-time cash reserves have been used to "buy down" override costs and how a recent county treasurer loss allocation is being accounted for.

Key facts and figures discussed

- Primary tax rate: staff proposed a recommended primary rate of 3.4083 for 2025-26, down from last year—.5574; staff explained the primary rate falls when assessed valuation rises. - Secondary tax rate: projected at 1.5229 for 2025-26 (override portion 0.8811; debt service and a statutorily required 0.05 levy for participation in Pima CTD are included). - Combined rate: the district presented a combined rate moving from 4.8544 last year to 4.9312 this year, a change of 0.0768. - Override and bond figures: staff said the district uses cash on hand to reduce the local cost of the 9% override and reported an available offset of about $423,000 for the coming year. The M&O override increases district capacity by about $2,400,000; next year—ond payment was reported as $1,400,000. Staff noted the district has been intentionally reducing how much of the override is supported by one-time cash so the buy-down lasts longer. - County treasurer loss allocation: staff reported a $14,000,000 loss allocation recorded in fund 565 (litigation/recovery). Staff said the district received an initial re-disbursement of roughly $1,800,000 and will keep unrecovered funds visibly parked in fund 565 until recovery efforts conclude. "The loss from county treasurer is not factored into the calculation of the tax rate," Superintendent Verdugo said.

Discussion highlights

- Board members pressed staff for clarity on assessed valuation and how a lower rate can still result in higher bills if property values rise. Miss Brown and Mr. Verdugo repeatedly explained the inverse rate/valuation relationship. - Mr. Verdugo said the district is trying to smooth tax-rate impacts over time rather than rely indefinitely on one-time cash to hold rates down. He described a deliberate plan to gradually reduce the cash buy-down so taxpayers do not face a sudden "cliff" when reserves are depleted. - The board discussed options for unrecovered funds from the county treasurer matter, including leaving funds in the litigation recovery fund while pursuing recuperation and, if necessary, recognizing any unrecovered shortfall in operating funds or by pursuing a levy in future years.

Formal action

The board adopted a motion to approve the 2025-26 tax-rate recommendation as presented. The motion was seconded and passed by voice vote; the transcript does not record individual roll-call votes or a named mover/second. Outcome: approved.

What the board did not decide

No final tax bills were set by the board; staff emphasized the district is recommending rates and that the Pima County Board of Supervisors will set the levy. The transcript shows staff opted to record county-treasurer losses in fund 565 while recovery efforts continue; the board did not direct a specific future levy or budget reduction tied to unrecovered funds.

What to watch next

The county assessor nd treasurer processes (assessed-valuation notices and any additional distributions recovered from county litigation) will determine taxpayer bills later this year. The district indicated it will continue public education explaining the rate/valuation relationship and will return with further recommendations if recovery outcomes change district cash positions.