Board approves midyear budget revision after sharp enrollment drop; BAC recommends carryover spending and 2% pay increase

The Tempe Union High School District Governing Board on Dec. 1 approved Revision No. 1 to its 2023–24 expenditure budget after business services reported a sharp drop in average daily membership (ADM) that triggered a mandatory midyear revision.

Business Services Director Roland Kranza said reconciliation with the Arizona Department of Education showed Group A ADM had fallen from a prior-year earned figure of 12,378 to roughly 11,800 so far this year, a decline Kranza described as "the largest drop" he had seen for the district and estimated at about 4.7%. That decline reduced revenue for the district's maintenance and operations (M&O) budget. Kranza proposed reducing the ADM-based M&O component to about $86,000,000 from the adopted $89,700,000, and the board approved the revision by voice vote, recorded as 5–0.

Kranza and the Budget Advisory Committee (BAC) also presented midyear recommendations. After reconciling state reports, the district's carryover (one-time funds) was reported as $29.2 million. BAC recommended allocating about $12.15 million of one-time funds for specified priorities, including covering a $3.8 million shortfall attributed to ADM loss and extending eight of nine ESSER-funded behavioral intervention specialists for one additional year. The BAC further recommended using ongoing capacity (projected increases and $200,000 in identified executive-team reductions) to provide a districtwide 2% permanent increase on salary schedules.

Board members questioned the timing and sought additional demographic context from feeder districts; BAC members said the demographer's projections prompted a conservative planning assumption that ADM could decline further. The BAC also recommended forming a larger, superintendent-led strategic long-term budget review committee and obtaining an updated demographer report to inform FY25–26 planning.

President Montero moved approval of the budget revision; Member Hodge seconded. The motion passed 5–0. The BAC recommendations will be incorporated into administration's January recommendations to the board and may result in further agenda items and actions.

Next steps: The acting superintendent will return in January with recommended implementation details for the BAC proposals and timeline for the strategic budget review committee.