TUCSON, Ariz. (KGUN) — The Tucson Unified School District (TUSD) was identified as one of the highest-risk school districts in Arizona for the 2024-25 fiscal year, following an audit by the Arizona Auditor General. This has prompted district leaders to announce a comprehensive financial recovery plan to cut $25 million by 2030.
The state conducts year-round financial risk analysis using 10 financial risk metrics to assess a school district's ability to operate within its cash resources and statutory budget limits. TUSD hit six of those metrics, placing it in the high risk category.
The metrics are:
1. Change in weighted student count
2. Operating budget limit reserve
3. General Fund operating margin ratio
4. General Fund change in fund balance
5. Capital budget limit reserve
6. Capital monies redirected to operations
TUSD is one of nine school districts throughout Arizona that is in the highest-risk category.
Dr. Gabriel Trujillo, TUSD superintendent, says the biggest flag for the district is the drop in enrollment.
"And the revenue loss that has come with over the last four or five years, probably around an 8% or an 8.4% loss in total enrollment, which has generated a really significant loss of funding," said Dr. Gabriel Trujillo, TUSD superintendent.
He says the district is spending more than it receives and the culprit is inflation.
"Benefits, health insurance for the employees, salary and compensation costs, wages continue to rise, inflation rises, the cost of food for our students rises, the cost of fuel because of inflation, that rises, and we have utilities that have gone up," Trujillo said. "What we pay TEP and what we pay the city for water, all of that has gone up dramatically, but your student enrollment has gone down."
TUSD was also flagged because it has been pulling from its reserve funds, in other words savings, and capital budget to cover the gap and break even.
"What's happened is now those reserves are pretty much depleted, so now we are into basically an area where we don't have a sufficient amount of reserves that the auditor general would like to see," Trujillo said.
Trujillo says they are not cash poor, but changes need to be made to be back on track.
"We do have reserves to cover our expenses for the remainder of the year and even into next year, but what we have to do is take this report very,very seriously." Trujillo said.
Due to this financial scarcity, the district needs to reduce its operating expenses by $25 million in the next five years.
"No more bringing money over from reserves and savings. No more bringing money over from capital. We're going to do the hard work and it's going to start this year," Trujillo said. "Targeting about $10 million in reductions for next school year. So that's going to be year one and year two. We want to do another $10 or $12 million and then we want to finish in year three, so we have a full $25 million budget deficit taken care of, off of this list within the next couple of years."
Trujillo says students should not be impacted by the coming changes because of Proposition 414, the override measure that passed in November.
"That infusion of dollars is going to allow us to protect the programs, the fine arts, PE, music. It's going to allow us to give staff salary increases to all of our teachers, our employees, from the support of our voters," Trujillo said.
The district plans to begin cost reductions in administrative departments not based in schools, targeting 7% reductions.
"You're going to see my own leadership team in the coming months. I'm going to be reconfiguring it and we're going to operate with a smaller leadership team," Trujillo said.
TUSD presented its financial action plan at Monday's board meeting, explaining the reductions targeted over the next five years.
If you want to learn more about TUSD's financial risk analysis, check out the audit by the Arizona Auditor General.
You can also take a look at TUSD's Financial Risk Action Plan.
If you missed the board meeting, you can watch and listen to it here.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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Vanessa Gongora is KGUN 9's Westside reporter.. Vanessa fell in love with storytelling by growing up in sports. She was fascinated by how sports reporters go beyond the x's & o's to tell players' stories, and how sports bring people together, inspiring Vanessa to provide the same impact as a journalist. Share your story ideas and important issues with Vanessa by emailing vanessa.gongora@kgun9.com or by connecting on Facebook, Instagram, and X.
