By Corinne Murdock |
Arizona’s public schools have over $1 billion in surplus, according to the Arizona Department of Education (ADE).
Tim McCain, chief financial officer for ADE, announced the surplus during last week’s meeting in the House Appropriations Subcommittee on State & Local Resources. According to McCain, the maintenance and operations (M&O) budget carry forward is now over $1 billion.
Additionally, the M&O budget carry forward has a generally positive trajectory, growing from $400 million in 2020 to over $1 billion this year. These budgetary increases carried forward function to raise schools’ budgets.
“Budget balance carry forward goes to the next year for their increase, so their budget will be increased by the amount that they carried forward to the next year,” said McCain. “[Schools] would be able to spend those monies in the future as they go forward.”
McCain also reported that the cash not committed to the M&O budget currently amounts to about $300 million, a decrease this year compared to last but an overall increase since 2020.
The school district fund balance increased from $3.5-$3.6 billion for all districts in 2017, to $6.4 billion for all districts in 2023. The percentage of revenue has remained in the 40-50 percent range since 2018.
McCain clarified that some of the funds within the latest balance consists of bond building funds, around $2 billion.
The school district M&O balance has continuously increased from $355 million in 2017 to $1.38 billion in 2023, with the percentage of revenue likewise increasing steadily from six percent in 2017 to 19 percent last year.
McCain explained that these factors contributing to the budgetary growth could be attributed to increased K-12 funding; districts mitigating risk due to inflation, minimum wage increases, current year funding, and drop in enrollment; the teacher shortage; and the lack of a budget balance carry forward cap. Prior to 2017, there was a four percent cap that incentivized a “use it or lose it” approach to budgeting.
Further, McCain said that the federal COVID-19 relief funds served as another factor contributing to budgetary growth. Arizona received over $4 billion in Elementary and Secondary School Emergency Relief (ESSER) funding. Over $277 million expired in September 2022, and over $1.1 billion expired last September. The remaining $2.5 billion are set to expire this September.
“The districts have been able to utilize ESSER funds where they would have normally utilized M&O funds for certain purposes, and be able to carry those funds over into the future,” said McCain.
Another budgetary growth factor according to McCain was the Classroom Site Fund expansion to include Student Support Services in 2022, and a $300-per-student increase in CSF funds.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
