APS projecting $14.5M deficit in funding

District’s goal to be ‘flexible but frugal’ in the coming school year

Albuquerque Public Schools has a clearer — albeit bleaker — picture of what this fiscal year’s budget will look like, and it includes an estimated $14.5 million decrease to its operational fund.

Chief Financial Officer Tami Coleman said state budget changes are projected to drop APS’ school funding formula revenue from $747.3 million down to $711.5 million.

Coleman said Coronavirus Aid, Relief and Economic Security Act and anticipated Federal Emergency Management Agency money will help the district “make ends meet.”

“These two additional funding sources will help to minimize budget cuts in the near future, but the bottom line right now is to remain flexible but frugal as we move through the next few weeks and the next few months,” Coleman said at a Board of Education meeting Wednesday.

Wednesday’s budget update came the same day teachers and staff went back to work and a week before school starts remotely. The district has noted that schooling in the COVID-19 pandemic comes

with hefty costs such as health and safety equipment and technology.

The operational budget decrease is the result of a reduced unit value — the dollar figure the state uses to help determine how much money districts will receive from the funding formula.

“This is a decrease of 4.8% from the unit value that our budget was based on. That takes us all the way past our unit value for the previous year, so it actually is quite a setback,” Coleman said.

The $14.5 million decrease to the APS budget is in part the result of the state reducing its allocations to districts depending on the amount of CARES Act funding they receive. At APS, the state is taking credit for approximately $10 million.

But APS will save $26.5 million because lawmakers decreased pay increases educators were set to receive. The revised raises will cost the district roughly $5 million.

Under a solvency bill passed by the Legislature during a June special session and signed into law by Gov. Michelle Lujan Grisham, all New Mexico teachers and school employees, but not school administrators, received 1% salary increases starting in July.

Teachers and state workers had been slated to get 4% pay increases under a $7.6 billion budget bill passed by lawmakers in February. But those pay raises were pared back as lawmakers were forced to revise the bill in response to a steep revenue decline caused by falling oil prices and the coronavirus pandemic.

APS had already had to cut back expenses for this fiscal year prior to the special session and its budget changes. Earlier this year, APS balanced a tentative budget with a $10 million shortfall, largely due to an enrollment drop. Departmental cost trimming and savings from the year prior — including utility savings from school building closures and unfilled staff vacancies — ended up filling that hole.

APS had been waiting for the state Public Education Department to determine the unit value, which left the extent of fiscal changes from the special session up in the air.

PED did not respond to questions from the Journal, including how a lowered unit value is expected to affect districts statewide.