Kyrene board gets first look at 2022-23 revenue

Despite a projected  enrollment drop of 577 students in 2022-23 and the pressures of inflation, Kyrene School District anticipates that its General Fund revenue will total only $40,000 less than the current fiscal year.

District Chief Financial Officer Chris Hermann late last month laid out a preview of district funding for the Governing Board, stating he is projecting General Fund revenue to total $107.4 million in 2022-23.

And Hermann’s job –and that of the school board – will be eased somewhat now that Senate President Karen Fann can’t round up enough votes in support of fellow Republican Rep. Michelle Udall’s effort to overhaul school funding.

Hermann noted that one of the big impacts on revenue is the historic decline in school age population that has been affecting Kyrene and Tempe Union High School District for nearly a decade.

Kyrene in some ways is feeling the bigger brunt because, as Hermann put it, “the size of our incoming kindergarten class is dramatically lower than the size of our eighth-grade class that is leaving the district as those students are promoted on high school. And that situation is what’s driving our enrollment down from the previous year.”

The factors affecting enrollment include a 19% decline in births between 2008-11 in Maricopa that was followed by another 16% drop in the last six years,

“The overall percentage of homeowners between the ages of 25 and 44 has dropped from 52.2% to 34.5% over the last 20 years,” he said. Likewise, the overall percentage of children in our boundaries between the ages of zero and 13 have dropped from 22.3% to 16.3%,” Hermann said.

Moreover, Hermann warned, “As you’re probably all aware, there’s going to be another decline in birth rates since the pandemic that we have not yet seen the impact of.”

While Hermann said the district will benefit from a cost-of-living increase in state funding, “it definitely is not reflective of what actual inflation numbers are.”

Hermann also said that one of the things that has helped cushion the revenue lost created by enrollment decline and a static state reimbursement for transportation costs has been the district’s 77-year lease with ViaWest for about 28 acres of land the district owns along I-10 between Chandler Boulevard and Ray Road.

The lease provides for monthly payments to the district totaling $240,000 this year, then $800,000 annually for the following five years. ViaWest is building three large warehouses on the site to compliment almost identical buildings on a tract next to the Kyrene land.

However, Hermann indicated the district still needs guidance from the state on how that money can be used.

“It definitely will be able to help supplement some of the loss in funding that we’ll see from enrollment declines,” he said, indicating it may have to be devoted to capital spending rather than personnel. “We’ve got to get some guidance on where and how we could use that money but it should definitely help to bridge some of the gaps that we’re going to see.”

But in response to a question by board President Kevin Walsh, Hermann had expressed concern over the effort by some House Republicans to overhaul state funding could complicate the budget-making process.

“It’s very complicated to unwrap that and we can absolutely of that for the board and community,” Hermann said, “but we’re going with what we know now that is statue. But I think it’s important for the board to know that that could completely change if new legislative initiatives are put into place or if that fund is change for the next year.”

But the overhaul is DOA, according to legislative sources, after rural legislators in particular expressed concern that their school districts actually would lose money in the overhaul, which Udall snuck into last-minute legislation without any hearings and without consulting teachers’ or many districts’ representatives.