Santa Fe schools report 1.1% unit-value bump, 5.16% enrollment drop and budget shortfalls as FY27 planning begins

District finance staff told the Santa Fe Public Schools Board of Education that the district's final unit value for FY26 increased 1.1%, producing approximately $1.7 million in additional revenue, but enrollment fell by about 5.16% (528 students), shifting program funding and complicating FY27 planning.

The financial officer described major FY26 closeout items: an audited cash-balance shortfall the board was asked to cover (about $523,000), added costs from an increased substitute teacher contract (about $500,000 needed to finish the year), and higher-than-expected settlements and IRS penalties and interest. Staff estimated those end-of-year items together accounted for roughly $1.8 million in additional operational pressure. Staff also noted a projected FY26 ending cash balance near 12% of the budget (above the board's 5–7.5% policy target) and said some of that one-time cash could be used to bridge gaps but must be managed carefully.

Board members probed whether the transportation fund covers salaries, buses and insurance — staff confirmed it funds route-based transportation including vehicle replacement and driver salaries but noted the fund's narrow purpose makes covering shortages difficult. Members discussed electric buses and retention strategies for drivers; staff said retention bonuses and one-time uses of cash are options to manage vacancies.

Staff and outside advisors also flagged the constitutional amendments expanding veteran property-tax exemptions approved by voters in November 2024; Harrigan estimated the change could reduce district net taxable value by about $182,000,000 (approximately 1.8% of the tax base) and said the district is monitoring the impact but does not expect the change to prevent the planned bond and ETN sales.

Staff emphasized schedule constraints: the FY27 budget is due to the Public Education Department on June 1 and the board has two meetings (including a May 14 date tied to bond/ETN timing) to review priorities and finalize the budget before submission. The financial officer said the district is consolidating roughly $6 million in nonrecurring school and department requests and will present prioritized options for board direction.

Why it matters: Enrollment declines and the mix of unit changes (special education increases, bilingual and fine-arts shifts) can meaningfully alter program funding and staffing decisions. The board must finalize priorities and reconcile one-time versus recurring requests before the June 1 filing deadline.

Next steps: Staff will continue consolidation of requests, produce scenarios for board priorities (including proposals targeting low-wage positions and bus drivers), and work with unions on pay-table discussions ahead of ratification timelines. The board signaled interest in further budget work sessions in early May to meet statutory deadlines.

Provenance: FY26/FY27 budget presentation (SEG 646–1050); enrollment/unit-count discussion (SEG 952–1008); transportation fund Q&A (SEG 1067–1104); IRS penalty/appeal discussion (SEG 1256–1296).