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Budget Challenges in 2016-17

Current legislation being proposed at the New Mexico State Legislature could have serious and long-lasting effects on Albuquerque Public Schools. 

The 2016-17 budget already has seen significant reductions due to a decrease in state funding combined with lower enrollment. A summary of these reductions follows:

March 2016 - $4.4 million    
Department budgets were reduced by $4.4 million before the 2017 school year began in anticipation of lower funding. This was done by reorganizing central office, consolidated maintenance and operations, canceling travel, filling only essential jobs and more. Cuts were kept away from schools as much as possible. 

April 2016 - $7.6 million
In addition to reducing department budgets, $7.6 million was set aside in anticipation of more cuts from the state due to declining oil and gas prices.

September 2016 - $1.9 million
Sure enough, the state Legislature met in special session and cut $9.5 million from the APS operational budget. We had already set aside $7.6 million but had to come up with another $1.9 million in savings. In order to do this:

  • Departments were asked to justify needs for the remainder of the fiscal year and offer up all non-salary balances over and above those justified.
  • The substitute budget was reduced based on current year trends.
  • Top administrators took an unpaid holiday (which only saved the district about $25,000.)

September 2016 - $3.1 million
In addition, the Legislature cut $3.1 million from the APS Transportation and Instructional Materials funds during the special session.

January 2017 - $12.5 million 
The state Legislature is looking at decreasing public school cash balances by $50 million; our share would be about $12.5 million.

The APS cash balance (which is like a savings account) is currently about $53 million. Though that sounds like a lot of money, it is really only about one month’s worth of expenses which include those that haven't yet been reimbursed by the state (the Public Education Department is a repository for federal and grant money that it passes on to school districts).

As of January, APS was owed more than $17 million in reimbursements.

Another problem with depleting the cash balance is it impacts the district's credit rating which could mean higher interest rates when borrowing money to build and renovate schools.

Dealing with the Shortfall
Schools have been asked to refrain from purchasing classroom supplies for the time being, which could result in a $2 million savings.

Additional savings may come from districtwide shutdowns. The district saves $2.5 million each day it shuts down (it saves about $700,000 a day if it furloughs non-school employees only). Of course, employees don't get paid when they don't work, so this would mean a reduction in pay for employees.

Another option is to lay off some employees for the remainder of the school year, though APS would rather not go this route. The district saves about $1 million for every 75 people it lays off. It is estimated it would need to lay off 750 people for at least three months to cover the anticipated state funding cuts.