Troubled Phoenix school district payroll remains in doubt despite $6M federal lifeline

PHOENIX – A financially troubled Phoenix school district could be getting a lifeline from the federal government, officials announced Monday.

However, it might not come in time to cover the Isaac Elementary School District’s next payroll.

During Monday’s State Board of Education meeting, Superintendent of Public Instruction Tom Horne announced that the U.S. Department of Education agreed to return $6 million of the $9 million in COVID funds the district previously forfeited by failing to spend it.

There’s a hitch, though, Horne said.

“It won’t come in time to make tomorrow’s payroll,” he said.

Horne said the state could send Maricopa County an advance on the federal funds, but the county is reportedly saying that paying district staff would not be its top priority.

“The county indicated that if we send them an advance on state aid, they will use it to pay back old debts and they will not use it to pay salaries, which means that probably the whole district would collapse and 5,000 students would not get the education to which they’re entitled,” Horne said.

However, Horne said the Arizona Legislature is working on an emergency bill to require the county to use the state advance to pay Isaac’s staff. If that happens, the state will release the funds to cover the next payroll immediately, Horne said.

“I’m keeping my fingers crossed that the Legislature will pass that bill and the governor will sign it today,” he said.

Horne said the Phoenix school district has property it could sell to further address its financial woes down the road.

“So, we just need to get through this emergency,” he said.

Why is Phoenix school district in a financial crisis

State Board of Education placed Isaac under a receivership earlier this month after the district overspent its budget by at least $12 million. A third-party receiver was appointed to oversee the district’s operations, including finances, governance and academic programs.

On Thursday, Isaac Superintendent Mario Ventura announced the he intended to resign, saying he took full responsibility for the crisis.

“It is my hope that with my resignation the district will be allowed to move forward with clarity and renewed focus,” Ventura said during a governing board meeting.

Before the federal government came through with funding, the state asked Maricopa County officials to make payments. The county, however, said it doesn’t have the authority to do so because of how large the debt is.

Isaac Elementary operates 12 K-8 schools in west Phoenix and has about 650 employees.

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