Higley Unified board hears first review of FY26 budget as district projects $9.2 million shortfall

At a governing-board meeting, Higley Unified School District staff presented a first review of the district's FY26 maintenance-and-operations (M&O) budget and outlined possible staff reductions and other measures to address a projected $9.2 million budget decrease.

The presentation by Tyler Moore, the district's chief financial officer, said the decrease is driven primarily by an expected 300 unweighted average daily membership (ADM) decline and the district's phase-down after voters did not approve a continuation of the local M&O override in November. Moore said the district is proposing $5.1 million in reductions to budgeted positions and other expenditure adjustments as part of initial planning.

"We're projecting a 300 unweighted ADM loss," Tyler Moore said during his presentation. He told the board the district currently estimates a carryforward balance in M&O of about $21.5 million for the current year, with a projected carryforward of about $17.5 million under the FY26 assumptions. Moore said one-time carryforward could be used short-term while the board and staff implement a longer-term plan.

Why it matters: The proposed reductions and the projected shortfall would affect staffing, school budgets and services across the district. Moore and Sherry, a district administrator who presented recommended position-level changes, emphasized administration is trying to minimize the impact on classrooms by using attrition, transfers to grant or rental funds where possible, and other non-layoff strategies.

Sherry said administration's initial recommendations include reductions or transfers in districts offices and schools and greater use of alternate funding sources. "A funding decrease of this magnitude though has led to some difficult decisions regarding rightsizing or reallocations moving into next school year," she said, and added the district will attempt to use natural attrition and fill vacancies from qualified internal candidates where feasible.

Key figures and near-term proposals presented to the board:

- Projected FY26 M&O budget decrease: $9,200,000 (district estimate presented by staff).

- Proposed reductions in budgeted positions totaling $5,100,000 (district-wide; includes both district office and school-site position recommendations).

- District-reported carryforward: an estimated $21.5 million currently in M&O and a projected carryforward around $17.5 million under the FY26 assumptions (figures shown by staff during the presentation).

- Enrollment assumption: 300 unweighted ADM decline for FY26 (staff projection used in the presentation).

- Middle school lease payment (principal and interest) projected for next year: $3,550,000 (staff said transfers from M&O to capital are planned to cover this obligation).

- Arizona State Retirement System (ASRS) employer rate: staff said the FY26 rate decreased to 12%, saving roughly $200,000 for the district; an "alternative contribution" rate change was estimated to save about $3,000.

- Positions highlighted for reduction or transfer included: district administration, maintenance and grounds, several special-education positions (with one proposed transfer to IDEA grant funding), portions of services and finance staffing, HR and student services, the Higley Center for the Performing Arts, transportation (11 positions listed), and school-site teachers as enrollment dictates. Staff presented a figure of about 32.4 full-time equivalent reductions at the district-office level and additional reductions at schools; some of the listed positions were vacancies.

Board members and public speakers pressed administration on alternatives to layoffs. Board member Glover urged staff to prioritize moving nonpersistent or lower-value budget items out of staff workloads before making personnel cuts. One board member noted many of the listed reductions are currently unfilled positions and asked whether using unused budget capacity or carryforward could preserve classroom positions.

Moore cautioned that fully using carryforward to avoid reductions would only postpone the structural imbalance. He recommended the board consider a staged approach: implementing recommended position reductions and using some carryforward to soften the immediate impact while the district evaluates options, including the possibility of putting a continuation of the override on a future ballot, and other capital options.

Moore also told the board staff will present a second review of the M&O budget at the Feb. 4 board meeting, a third review on March 4, and a capital budget review in April. He said the district plans to bring recommended phase-two reductions in March and expects to ask the board for direction on whether to pursue an override continuation on the November ballot.

Other near-term items staff identified for board consideration included more aggressive utility management, pending property-casualty and workers' compensation insurance rates that staff said had not been finalized by carriers, and potential sale, lease or exchange of 18 acres of district-owned land to generate capital funding.

What the board asked staff to do next: staff said they will communicate directly with any departments, campuses or individuals affected by the initial recommendations and will provide more detailed numbers at the next review. Moore also asked the board for guidance about whether it wishes the district to budget to a smaller deficit for FY26 while using one-time carryforward, or to make deeper structural reductions now to preserve longer-term sustainability.

The board did not take a formal vote on the budget at the meeting; staff presented the first review and sought feedback and direction.

Next steps and timeline noted by staff: a second budget review (Feb. 4), a third review (March 4) that will be timed to allow contract issuance, and April reviews focused on the FY26 capital budget and potential options for the district's vacant real property.

Ending: District leaders said they aim to limit involuntary staff reductions through natural attrition and funding transfers where possible, while asking the board for policy direction and community engagement to resolve the longer-term structural gap.