Arizona School District Financial Risk Analysis—January 2025
As of January 2025, 2 Arizona school districts, Antelope Union High School District (UHSD) and Isaac Elementary School District (ESD), continue to be at higher financial risk than other Arizona school districts based on our analysis of 10 financial risk measures. Both highest-risk districts are experiencing risk related to operating and/or capital budget limit reserves and all 3 General Fund measures. In addition, both highest-risk districts are now operating under a State-appointed receiver since the State Board of Education voted Isaac ESD into receivership on January 14, 2025, based on the District exceeding its FY 2024 operating and capital budget limit by $2.9 million and $9.3 million, respectively. Antelope UHSD has been in receivership since June 2023.
Last year, we found that 4 Arizona school districts were at higher financial risk—2 of last year’s highest-risk districts, Santa Cruz Elementary School District and Tonto Basin Elementary School District, improved enough to be removed from the current highest-risk districts list by reducing spending to be within available revenues, which improved their budgetary reserves and financial position measures. Further, both districts’ primary property tax rates are no longer frozen for the first time in more than 5 years.
Beginning in FY 2020 and ending September 30, 2024, Arizona school districts received COVID-19 federal relief grants with less restricted allowable uses than most other federal or State grants. Some districts may have improved their budget limit reserves and financial position measures when they used federal relief monies for allowable spending instead of other available State and local monies. Since those federal relief monies were 1-time monies, districts could face critical spending decisions and higher financial risks in the coming years if they did not develop plans to either phase out spending or increase other revenue sources to accommodate continued spending once the monies were no longer available.
We provide our analysis results and the underlying data for the highest-risk districts and other Arizona school districts in an interactive, user-friendly, web-based format. This format will allow you to easily view detailed information for a single district or more summarized information for all districts State-wide, by county, or by legislative district. The website also explains the measures analyzed and how the analyses can be used to better understand a district’s overall financial risk. Links to the report Overview, State results, and District results are included below. Additionally, users can view the January 2025 data file and a financial risk action plan template under “Additional Documents.”