Schools face short-term issues from $200 million shortfall as Arizona budget talks drag on

Arizona school districts and charter schools may not get all the money they’re owed from the state this month if lawmakers don’t pass a new state budget by June 13.

In a letter to school officials, the Arizona Department of Education announced its fund for what’s called Basic State Aid is about $200 million short.

According to the department, a variety of factors led to the shortfall.

That includes $69 million in higher than anticipated expenses related to a lawsuit against Maricopa County that forced schools in the county to return millions of dollars to taxpayers after a judge found the county overtaxed some property owners.

Higher than anticipated adjustments to enrollment in schools last year added $45 million to the deficit.

A letter sent to schools said the state’s school voucher program was also a factor.

Legislative budget analysts projected voucher spending would be about $820 million this year, but those costs came in $52 million above those projections, the letter said.

The department also reported around $17 million in lower-than-projected property tax collections for schools, and $10 million in unanticipated costs for technical education programs.

The Department of Education sent a letter to schools notifying them of the potential shortfall.

In the letter, the department said it said districts and charter schools will receive “approximately 60% of the regular monthly payment,” unless the Legislature passes a new budget or a supplemental funding package to make up the shortfall before June 13.

“We are awaiting the state budget and are confident that any shortfall will be covered,” said Doug Nick, a spokesman for the Department of Education.

In a letter to schools, the department said it has been in contact with the Legislature and expects it to include additional funds to fill the gap in a budget Republican lawmakers are currently negotiating with Democratic Gov. Katie Hobbs.

“However, if a budget is not passed, or a separate supplemental appropriation is not approved by June 13, ADE will not have sufficient funds to make the full June Payment,” according to the letter.

Lawmakers aren’t expected to return to the Capitol to vote on a budget until at least June 16.

If the department can only make a partial payment on June 13, it will provide the remaining payment to schools once additional funding is approved, according to the letter.