Tempe School District board hears proposed $73 million budget; adoption set for June 24

District Chief Financial Officer Eric Thompson presented the Tempe School District Governing Board with a proposed FY27 annual expenditure budget at a public hearing Wednesday, saying the plan assumes a 2% state funding-formula increase and an estimated 2% decline in student enrollment.

Thompson told the board the enrollment decline and formula increase “basically washes even,” producing only about a $25,000 net difference on an approximate $73 million budget. He also said the proposal does not include roughly $1.3 million in one-time state aid for DAA funding and free-and-reduced-lunch support unless the legislature and governor finalize those funds. Separately, the district proposes moving about $2 million of DAA funds to the capital budget to sustain capital projects while maintaining an estimated $17 million in carryover for capital needs.

The budget timeline will follow the district’s two-step process: adoption of a proposed budget at the June 24 meeting and, if necessary, a revision after the state’s final budget is set. Thompson told the board that state law requires final budget adoption by July 15 and that any revisions required by changes in the state funding formula would likely be handled in August or at the district’s September meeting (revisions must be completed by Sept. 15).

During a question-and-answer exchange, board member Jim Lemon asked why the reported average teacher salary appears lower despite a 2% staff raise. Thompson explained turnover is the cause: “if you had a $70,000 teacher being replaced with a $52,000 teacher, you're going to have a lower average there despite everybody going up,” he said.

Board members also pressed the district’s 2% enrollment-decline estimate, referencing prior intra-year fluctuations that briefly approached 4% before special-education identifications reduced the net decline. One member suggested using a 3% decline for conservatism. Thompson said the district’s spending cuts had been made assuming 2% and that moving the assumption to 3% would be possible but would primarily draw on carryover rather than trigger immediate additional cuts.

The public hearing was closed after no further requests to speak. The board intends to adopt the proposed budget at its June 24 meeting; Thompson said a revision will follow only if the legislature’s final budget changes the district’s funding formula outcomes.

Key next steps: adoption of the proposed budget is scheduled for the June 24 governing board meeting; the state’s final budget and signature by the governor will determine whether the one-time $1.3 million is added later, and statutory deadlines require final adoption by July 15.