In the aftermath of last week's election, the state's largest school district predicts it could see as much as a $65 million budget cut for the next school year.
Mesa Unified School District's leaders outlined possible funding cuts the week before the election, anticipating what would happen if voters turned down two measures lawmakers counted on to bring money into the general fund.
That's just what happened last week. Arizona voters squashed the Legislature's plan to use funds from the First Things First early childhood program and state land trust to balance this year's budget and provide future revenues.
Mesa district is already seeing a staggering 2,300-student decline in enrollment this year, setting in motion the possibility of shifting programs or even closing schools at some point in the future, school leaders have said.
Superintendent Mike Cowan said the district is just working with "preliminary numbers," but wants to get started since the current school year is well underway.
"It's a guess shot at what could possibly be the worst-case scenario," Cowan said.
That "worse-case scenario" is a 15 percent to 20 percent cut from Mesa's operating budget, more than 90 percent of which pays for salaries and benefits for staff.
To determine its portion of projected state budget cuts, Mesa considered the fact that the two failed propositions would have put about $450 million into the coffer this year and the fact that the Joint Legislative Budget Committee is already predicting a $1.4 billion budget deficit for the next fiscal year. But it still involved a lot of guess work to arrive at the possible $65 million budget cut for Mesa.
"The big unknown is what is going to be the impact on K-12 education and therefore the impact on Mesa Public Schools," Cowan said.
Rep. John Kavanagh, R-Scottsdale, chairman of the House Appropriations Committee, said budget work will begin later this week, with the basic information ready for both chambers' committees by January.
"It's my hope we can wrap up the entire budget in three to four weeks" once the session begins, Kavanagh said. "It'll probably be easier to do the budget this year because there are fewer options to discuss. There are going to be deep cuts. There are only limited areas we can take them in. While it's going to be a much more painful budget to put together, it should go much more quickly."
On top of the state's revenue situation, muddying the budget waters is President Obama's health care spending requirements, Kavanagh said.
Even if the state asked all government agencies it could to reduce their budgets by 10 percent next year, it would only give the state $60 million, he said.
Though the state has cut education spending the past few years, schools have been somewhat protected. When the state accepted federal stimulus dollars, it had to agree to keep education spending at the fiscal year 2006 level.
Those stimulus dollars, and that spending requirement, end June 30 - the last day of the current fiscal year.
"Now that, that is gone, school districts and K-12 funding in the state of Arizona is more easily cut without the ramifications of losing federal assistance," said Gerrick Monroe, Mesa's assistant superintendent for business and support services.
Without that protection, "you're going to see significant cuts in education," Kavanagh said. "But it's my desire to make them minimal at the K-12 level because of a non-binding, never-the-less clear quid pro quo that if the sales tax passed cuts to K-12 would be minimal," he said in reference to the temporary 1-cent increase in state sales tax that Arizona voters approved last spring.
Unless a special session is called, the Legislature is not scheduled to meet until January, and likely the first line of business will be dealing with this year's budget shortfall before tackling next year's budget.
Both budget years put a gray cloud over school districts and charter schools statewide. Public education makes up the largest chunk of state spending. If there are cuts to be made, it's a big target. Mesa is the first East Valley district to have a public discussion about the pending cuts.
"The sooner we have an idea what the real impact is going to be, the better," Cowan said.
The school district has dealt with $85 million in cuts over the last three years. Enrollment has gone from 74,000 to about 65,000 in the last half decade.
School districts in Arizona are funded based on their enrollment. If the district just had to deal with the loss of funding from the enrollment decline - about $11 million - that could be done internally, Cowan said.
But the district is also bracing for cuts from the Legislature as well as a required increase in its contribution to the state retirement system for employees.
"All of us are going to have to look at how we deliver services and see if there are alternatives to continue providing a quality education," he said.
Last year, the district proposed plans to address cuts: Nearly all of the "Plan A" actions were put into place, including implementing two furlough days for staff and reducing some business and support services. "Plan B" included increasing class sizes, eliminating some transportation routes, adding another furlough day, reducing salaries by 5 percent and establishing a pay-for-play plan for athletics.
"We'll go back and look at all those on (last year's) budget ‘B' and we'll likely - depending on how severe the impact - we'll have to look at more," Cowan said. "If we're going to see a significant decline of state dollars ... we need as a community to strategically and carefully look at, and in some instances reinvent, how we provide a quality education for our students."