Gilbert Public Schools governing board members expressed concern Dec. 4 that continuing to fund pay raises as promised will be difficult in the coming year.
“Those years when we have a little extra money are fun,” board member Jill Humpherys said. “But most of them are like this, identifying the money.”
At stake is the continued pay raises to teachers promised under Gov. Doug Ducey’s “20 by 2020” plan. The Legislature passed the plan last May. In Year 1 of the three-year plan, Gilbert teachers received the promised 9 percent raise.
Year 2 calls for another 5 percent raise. Assistant Superintendent for Business Services Bonnie Betz said she estimates the district will receive an additional $4.9 million funding from the state under the plan.
However, because the state uses a narrower definition of teacher than the district does, the money will not be enough to cover 5 percent raises to all staff.
Furthermore, board Clerk Reed Carr said the state calculates the additional funds from the state’s average teacher salary. Because Gilbert Public Schools’ average teacher salary is higher than the state’s average, the additional funds are already insufficient to raise salaries 5 percent, even if the raises were limited to the group covered by the state’s narrower definition of teacher, he said.
Other expense increases
Betz outlined four other items that will put additional pressure on the maintenance and operations budget: an increase of the health insurance trust contribution of up to 15 percent; a minimum wage increase to $12 per hour, mandated by Proposition 206, that is set to take effect Jan. 1, 2020; a 0.31 percent state retirement contribution increase; and a 1 to 3 percent salary increase for non-teacher staff.
Early projections have the M&O general budget limit from the state increasing a little more than $3 million, Betz said. The projections showed the budget increasing from $225.5 million to nearly $228.8 million.
That leaves the district between $4.8 million and $6.4 million short of what it will need to cover pay raises and mandated additional contributions.
Betz pledged to the board that the district’s finance staff will “dig for dollars” to narrow the gap.
Help from capital budget
One possible source, which the district has used before, is to move some money from the capital budget to the M&O budget. The district anticipates the Legislature to continue restoring District Additional Assistance as promised. Additionally, the district could have an estimated $1 million carryover from this fiscal year.
But Carr cautioned board members that continuing to make such transfers from the capital budget is unsustainable because salary increases compound year after year.
Board member Charles Santa Cruz said the district will have to keep close watch on its expenditures.
“At each of the campuses in the district, it might be to our benefit to be extremely judicious and very frugal at what it is we’re going to propose to buy as it relates to equipment [and]remodeling facilities,” he said. “That money will simply not be there, and I would much rather not buy things, if we can do that, in order to maintain a quality employee group.”
Betz said the budget discussions in the district have just started and the district expects to have a preliminary budget in June. A final budget will be proposed for board adoption in June, she said.