School district financial risk analysis

Measures

Small school budget limit adjustment

8 of 207 districts are at high risk for Small school budget limit adjustment

This measure shows a district's additional budget capacity from a small school adjustment in the current year and each of the prior 4 years. The loss of the ability to include a small school budget limit adjustment due to exceeding the allowable student count thresholds may indicate higher financial risk as it generally results in substantially decreased spending capacity. A district may also experience higher financial risk if its small school budget limit adjustment is not fully funded due to a frozen tax rate .

Arizona school districts receive revenues from local, State, and federal sources. In general, districts receive local and State revenues based on an equalization formula set by State law. Districts that are small school adjustment eligible may increase their budgets and receive more local property taxes and, in some cases, additional State assistance. In recent years, approximately 50 Arizona school districts budget a small school adjustment, and the total budget amount is shown along with other less common revenues at the bottom of each district's page.

Although districts with frozen tax rates can continue to increase their budget limits through higher small school adjustments, they will not receive additional local property taxes for those increases. Such districts will have unfunded budget limit reserves (i.e., budget capacity without related monies to support spending).

Districts that historically budgeted for a small school adjustment but have become ineligible for the adjustment because they have exceeded the maximum student count in either of the last 2 fiscal years were considered high risk for this measure. In addition, Districts with a frozen tax rate that budgeted for small school adjustments in recent years beyond what their tax rate and additional State assistance would fund were also considered high risk if they had unfunded budget limit reserves of at least 10 percent in the most recently completed fiscal year.

Report date Number of districts at high risk
December 2020 14 of 207
December 2021 12 of 207
December 2022 8 of 207
December 2023 8 of 207

District-set small school adjustment budget amounts were obtained from the Arizona Department of Education (ADE) as of November 27, 2023, as follows:

  • Fiscal year 2024: BUDG25 report for each district, which includes the small school adjustment budget amount for the current year based on each district's most recent adopted or revised expenditure budget.
  • Fiscal years 2020 through 2023: BUDG75 reports for each district, which include the final small school adjustment budget amount for each year.

Fiscal year 2022 frozen tax rate data was obtained from the Property Tax Oversight Commissions' report, 2022 Review of School Districts that Exceed the 1 Percent State Constitutional Limit.

Fiscal year 2023 M&O and UCO Fund ending fund balances were obtained from ADE as of November 27, 2023, from the district-submitted unaudited annual financial reports.

Districts at high risk for this measure

School district County Legislative district Additional information
School district County Legislative districts
Bowie Unified School District Cochise County 19 District's small school budget limit adjustment is not fully funded because of a frozen tax rate.
Double Adobe Elementary School District Cochise County 19 District's small school budget limit adjustment is not fully funded because of a frozen tax rate.
Elfrida Elementary School District Cochise County 19 District's small school budget limit adjustment is not fully funded because of a frozen tax rate.
Hayden-Winkelman Unified School District Gila County 7 District's small school budget limit adjustment is not fully funded because of a frozen tax rate.
McNeal Elementary School District Cochise County 19 District's small school budget limit adjustment is not fully funded because of a frozen tax rate.
San Simon Unified School District Cochise County 19 District's small school budget limit adjustment is not fully funded because of a frozen tax rate.
Tonto Basin Elementary School District
1 of 4 highest-risk districts
Gila County 7 District's small school budget limit adjustment is not fully funded because of a frozen tax rate.
Valley Union High School District Cochise County 19 District's small school budget limit adjustment is not fully funded because of a frozen tax rate.