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Tempe Union board approves midyear budget revision and directs long-term budget planning amid projected enrollment declines
Summary
Board approved two budget actions — a revision to the 2023-24 expenditure budget and the acting superintendent's FY24-25 part‑2 recommendation — after presentations showing a net midyear ADM funding shortfall and demographer projections that could shrink enrollment more than 20% over 10 years.
The Tempe Union High School District Governing Board on May 2024 approved a second revision to the 2023-24 expenditure budget and the administration's part‑2 budget recommendation for 2024‑25 after business services presented midyear reconciliations and the long‑term budget committee summarized enrollment and fiscal projections.
Board members voted unanimously, 4-0, to accept the staff recommendations after hearing that the district's funding was affected by midyear changes to average daily membership (ADM) and other reconciliations. Business services staff reported an additional loss of approximately 41 group‑A ADM that reduced budget capacity by about $266,000, offset partially by a gain of 26 ADM in group‑B (about $134,000), netting a roughly $132,500 reduction in funding for the current year. Other adjustments included prior‑year reconciliations and changes to override and capital calculations.
Why it matters: the board was asked to act with a longer horizon in mind. The district's demographer updated a projection showing an anticipated 21.5% decline (about 2,600 students) over the next decade. District staff presented two capacity estimates — a state‑formula capacity near 19,500 seats and an internal, classroom‑based capacity of about 17,200 — and calculated current utilization at roughly 63% (state formula) or 71% (internal). With the demographer's projection, utilization would fall toward about 49% (state) or 55% (internal) in 10 years.
What the board approved and directed: the board passed the final 2023‑24 revision and the superintendent's part‑2 recommendation, which reflected updated reconciliation amounts and a set of budget advisory committee suggestions. Those recommendations include planning for a conservative 5% enrollment decline in next year's budget build, continuing to use carryover for one‑time items where needed, and adding projected surplus funds to contingency (a rainy‑day reserve) to provide flexibility as the district evaluates longer‑term changes.
Budget drivers and tradeoffs: presenters stressed that labor costs account for roughly 85% of M&O expenditures and that certain recurring revenue add‑ons (teacher experience index and the M&O override) have been significant contributors to budget capacity. Staff estimated that a district‑wide annual step movement across salary schedules would cost about $1.6 million, while a 1% across‑the‑board raise would be roughly $1 million — amounts that would be difficult to sustain without either revenue increases or program and staffing tradeoffs under the demographer's forecast.
Next steps: the long‑term budget committee will continue meetings and work toward recommendations in October and a final package in December, focused on options to reduce costs or reconfigure services while attempting to preserve instructional quality. Administration also committed to public communication and to publishing interactive budget information online to increase transparency.
