The Maricopa Unified School District Governing Board got an early look last night at proposed 3% pay raises for all employees and a $1,000 bump to the starting salary for new teachers. The proposal would also increase starting pay for all other new employee positions by 1.5%. At the same time, district officials warned about a possible $500,000 “fiscal cliff” if certain state funding is not approved.

Chief Financial Officer Jacob Harmon presented the preview of the fiscal year 2026-27 budget.

Under the proposal, the base salary for first-year teachers would increase from $56,000 to $57,000. Starting pay for all other new employee positions would rise by 1.5%. Separate from those adjustments, all returning employees would receive a 3% raise. Altogether, the raises would cost about $1.96 million.

Harmon said the district has enough ongoing revenue to cover the increases. For fiscal year 2027, the district is projecting a maintenance and operations budget limit of $91.45 million, with about $7.07 million in ongoing revenue available.

District leaders said the raises are part of a broader effort to stay competitive and keep employees from leaving.

“Any time that we’re looking at our compensation packages in general, we are trying to retain staff,” Harmon said. “We’re trying to be in the upper echelon when it comes to salaries of all employee groups. That includes our teachers.”

Board President Patti Coutré said improving teacher pay has been a focus for years as part of the district’s long-term effort to support retention.

Alongside the raises, Harmon pointed out what the district calls a “fiscal cliff.” The term refers to funding that could disappear if lawmakers do not renew it.

For fiscal year 2027, two funding pieces require one-time legislative approval: money tied to the Free and Reduced Price Lunch program and an additional assistance formula inflation factor for capital funding.

If the Arizona Legislature does not renew that funding, MUSD could lose a little more than $500,000. Harmon said the district could absorb that loss if necessary.

“We’re not going to reduce positions or make any cuts or freezes or anything,” he said. “We’re certainly not at a point in our budget to have to do things like that.”

Instead, the district is building its spending plan as if the funding will not be approved. If lawmakers do approve it later — typically at the end of June when the state budget is finalized — the district will decide then how to use the money.

Starting in fiscal year 2028, both funding items are scheduled to be permanently added to the state funding formula, meaning they would no longer need yearly approval. Lawmakers have approved the funding each year so far, but district officials said they are planning cautiously.

The proposed budget also sets aside $900,000 in contingency funds for unexpected needs. Harmon said the district makes conservative enrollment projections each year because Arizona uses a “current year funding” model, meaning school funding is based on average daily student attendance.

“There’s always a risk that enrollment doesn’t come in and therefore our revenues that we project might not materialize,” Harmon said. “That’s why we have contingencies built into this expenditure plan and we also have some reserve, some contingency funds.”

The board will continue reviewing the fiscal year 2026-27 budget in April. A proposed budget is expected in June, with final adoption required by mid-July.