TUSD will fund nearly $45 million in raises and school staffing despite a projected decrease in enrollment and a loss of state funding.
The Tucson Unified School District governing board approved a $797 million budget for the 2026-27 fiscal year at Tuesday's governing board meeting. While the budget addresses some of the district's financial challenges, significant work remains in the coming years, said Ricky Hernandez, TUSD's chief financial officer.
"From my perspective, this is probably one of the better budgets that we've had since the Covid pandemic," Hernandez told the governing board Tuesday.
The district faces a $25 million deficit. The 2026-27 budget reduces that shortfall by about $10 million, bringing it to roughly $15 million, Hernandez said. The district's goal is to eliminate its deficit by 2030.
"The work that Dr. Trujillo is working on, in regards to the consolidation and reconfiguration of the district, that is definitely going to put dollars back," Hernandez said. "We're essentially overspending at this point, but there will need to be some additional cuts that will need to happen."
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The deficit is primarily caused by a decrease in enrollment coupled with increasing operating costs, Hernandez said.
The Arizona Auditor General flagged TUSD in January as operating at the highest financial risk, making it the only school district in Pima County to land in this category.
Funding increases
Last November's voter-approved override is driving the nearly $45 million for staffing and compensation initiatives. It will fund $24.1 million in salary increases, 95 interventionists, 58 P.E. teachers, 35 counselors, 22 social workers, 19 career and technical staffers and six librarians.
Hernandez said that the override, while funding raises and staffing initiatives, was not meant to address the district's budget deficit.
Classroom spending, which includes instruction, student support and instructional support, is projected to increase from about 68% in 2025 to about 72% next school year, surpassing the Auditor General's recommended 70% benchmark, Hernandez said.
Funding decreases and cuts
A projected 2% decline in enrollment is expected to reduce maintenance and operations funding by about $5.7 million, according to Hernandez. However, a 2% inflation adjustment to the state's Base Support Level offsets most of that loss, leaving the district with a net reduction of about $662,000.
Hernandez said the state budget approved by the Legislature and signed by Gov. Katie Hobbs did not renew Proposition 123, which was a voter-approved dedicated revenue stream for K-12 public education.
"This means that the district is losing $2.7 million," Hernandez said Tuesday. Previous Prop 123 funding was flexible for school districts to cover their most pressing local needs.
On the other hand, Hernandez said board-approved spending cuts adopted in February and March will generate about $6.8 million in permanent annual savings. The reductions included eliminating the customer support center, reducing departmental budgets, closing the Region 2 office and cutting several administrative positions.
Moving forward
The governing board is scheduled to formally adopt the budget on July 14, but revisions are expected through September as the state finalizes its budget calculations.
"The auditor general issued preliminary budget forms, because obviously we're running kind of late, allowing school districts to have proposed budgets ready before the statutory deadline of July 5," Hernandez said. "They will issue final budget forms my understanding is this Friday, so we will come back to you with revisions to incorporate any changes that are coming from those forms by September 15."
