A decline of 400 students and a decision to opt out of a state program offering funds for extra days of learning mean the loss of several million dollars for Santa Fe Public Schools in fiscal year 2023.

A draft annual budget shows, however, an increase in the state’s per-student funding formula and extra money to boost teacher and staff salaries will help offset the district’s drop.

Chief Financial Officer Robert Martinez told Santa Fe school board members Thursday night the district expects to nearly match its previous budget in the next school year — with a projected $115.57 million for 2022-23, compared with $115.6 million in the current fiscal year.

The average enrollment for 2021-22 was 400 students fewer than 2020-21, officials said, which likely means about $2 million in lost revenue, even as the state approved a 12 percent increase in the “unit value” used to calculate per-student funding through a complicated formula called the State Equalization Guarantee.

The district also will see the loss of $5.9 million after officials decided not to participate in a state-funded Extended Learning Time program.

The operations budget discussed by school board members and administrators is just one component of the district’s annual budget, due to the New Mexico Public Education Department on June 1. But the enrollment-based funds and pandemic aid money it includes represent the bulk of the district’s funding for the coming school year.

“Even though you see … maybe an increase, cost has gone up across the board — utilities, personnel, salaries,” Superintendent Hilario “Larry” Chavez said, speaking of the district’s base funds of about $109.6 million, which is slightly higher than base funds for the current year.

Administrators noted payroll spending, already set to increase through approved legislation, could rise further because

84 teachers have expressed an interest in moving up in the state’s three-tiered licensing system and therefore would see a hike in pay.

Some teachers rising to a higher licensing level will see salary increases of up to

29 percent.

Data shows the district likely will invest $4.9 million to raise salaries an average of 7 percent for all positions and to cover rising insurance costs.

The district is still negotiating pay rates with the local teachers union to ensure salaries for educators with higher levels of experience remain competitive.

“That way we can provide a little cushion to really try to help the compaction,” Chavez said.

Leaving vacant positions unfilled and “right-sizing” the district’s staff would save about $1.2 million, according to Martinez’s budget presentation.

“One of our priorities is to keep class sizes as small as possible,” he said. “However, we may have to provide a little larger class.”

State statute restricts class sizes at different levels, ranging from 20 students in kindergarten to 30 students for a high school English class. When the district can’t keep to those minimums due to staffing issues, Chavez said, teachers who take on more students receive a stipend. Also Thursday, the school board approved a policy allowing parents and caregivers to administer medical cannabis to students on campus under certain conditions.

The board approved a $1,000 stipend for cafeteria managers as well. Several cafeteria managers recently spoke out about their desire to join the district’s union after they received a reduced retention stipend during the pandemic. Cafeteria managers have said they miss out on union protections because they’re considered managers but actually hold little leadership authority over kitchen staff. Chavez said the district is still working with the National Education Association Santa Fe to see how kitchen managers might receive union representation.

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