Reimagining TUSD: Closing Schools May Be Necessary, But Where Is the Financial Plan?
Tucson Unified School District has begun the difficult process of determining which schools should be consolidated or closed as enrollment continues to decline.
TUSD's “Reimagining Our Schools Together” (Present Last Saturday) presentation provides considerable information supporting the need to reconsider the District's existing school configuration.
The numbers are difficult to ignore.
But after reviewing the presentation, I have a larger concern:
TUSD has done a reasonably good job explaining why it has too many school seats. It has not yet demonstrated how its proposed school reconfiguration will solve the District's larger structural financial problem.
Those are two different questions.
TUSD Has 28,180 Excess Seats
Perhaps the most important number in the entire presentation is 28,180.
For the 2025-26 school year, TUSD reports:
39,180 students
88 schools
Overall building utilization of only 58%
28,180 excess seats
The situation is even more striking at individual schools.
Seven non-alternative schools were operating at less than 30% of capacity. Another eleven were operating between 30% and 39% of capacity.
This is not a minor facilities-utilization problem. It is a problem that has built up since the Spring of 2013. Over the past 13 years the TUSD Management and Board has not addressed the problems effectively in the Schools.
A district cannot indefinitely maintain an infrastructure capable of accommodating approximately 67,000 students while serving approximately 39,000 without financial consequences.
The difficult question is no longer whether TUSD has excess capacity.
TUSD's own numbers demonstrate that it does.
This Problem Has Been Developing for Decades
The enrollment problem did not suddenly appear.
TUSD reports that enrollment peaked at 63,647 students in 1973-74 when the baby boomer population peaked. After declining for years, enrollment nearly returned to 63,000 in the mid-1990s due to a growing population in Tucson before beginning another long decline.
TUSD closed nine elementary schools in 2010 and undertook another significant round of closures and consolidations in 2013.The important governance question is therefore:
Why has TUSD's operating footprint remained so much larger than its student population for so long?
Closing schools is painful.
But postponing necessary decisions does not eliminate their financial consequences.
Demographics Are Only Part of the Enrollment Story
One of the most important findings in TUSD's presentation is that its enrollment problem cannot be explained entirely by declining numbers of school-age children.
TUSD has a significant competitive enrollment problem.
For 2025-26, approximately 51,721 ADM resided within TUSD's boundaries.
Only about 32,789—or 63.4%—attended their resident district.
Another 6,743 attended other school districts and approximately 12,190 attended charter schools. After considering students coming into TUSD, the District reported a net loss of approximately 15,896 ADM to other districts and charter schools.
That is a critical distinction.
TUSD faces at least two enrollment challenges:
Demographic decline — fewer potential students.
Competitive loss — students living within TUSD boundaries choosing educational alternatives.
Closing underutilized schools can address part of the cost problem.
It does not, by itself, solve the competitive problem.
Where Are TUSD Students Going?
TUSD's own analysis provides additional insight.
The District identifies the top destinations for students leaving TUSD for other local education agencies.
The list includes Catalina Foothills, Leman Academy, La Paloma, Tanque Verde, BASIS, Vail, Academy of Mathematics and Science and others.
The top 15 destinations represent approximately 10,977 net ADM lost from TUSD.
That raises another question that should be part of the reconfiguration discussion:
Why are families who live within TUSD choosing these alternatives?
A facilities plan without a serious customer-retention strategy risks addressing the symptom while leaving an important root cause untouched.
The Five-Year Trend Is Concerning
TUSD's five-year analysis reinforces the issue.
Total ADM residing within TUSD's boundaries declined from approximately 55,656 in 2021-22 to 51,721 in 2025-26, a decline of 7.1%.
But resident students actually attending TUSD declined even faster—from approximately 36,479 to 32,789, or 10.1%.
That difference deserves management attention which TUSD Management has been ignoring for the past 13 years.
TUSD should not merely ask:
“How many school-age children live within our boundaries?”
It should also ask:
“What percentage of those students choose TUSD, why do families leave, and what would cause more families to choose TUSD?”
School Closures Need a Financial Target
This brings me to my principal concern with the presentation.
TUSD's process is designed to develop and compare closure and consolidation scenarios and eventually reach consensus on a committee-supported draft plan.
But the District should not begin the financial analysis with:
“How many schools should we close?”
The better question is:
“How many dollars of permanent recurring expenditures must TUSD eliminate to restore structural financial balance?”
Only after answering that question can management determine how much of the required savings can reasonably come from school consolidation.
Ten schools is not a financial objective.
Recurring annual savings is the financial objective.
Closing a $4 Million School Doesn't Necessarily Save $4 Million
This distinction is extremely important.
Suppose a school costs $4 million annually.
Closing that school does not necessarily save $4 million.
Students still need teachers.
Students may need transportation to receiving schools.
Programs may need to be relocated.
Receiving schools may require modifications.
Some administrators, maintenance employees and support personnel may remain.
There may be moving expenses and other transition costs.
Consequently, the Governing Board needs to know the avoidable net recurring cost of each proposed closure—not merely the gross expenditures currently assigned to the school.
Every Proposed Closure Should Have a Financial Business Case
Before the Governing Board votes on a final reconfiguration plan, I believe each proposed consolidation should be accompanied by a financial analysis showing:
Current annual operating cost
Costs eliminated by closure
Costs transferred to receiving schools
Additional transportation costs
Program-relocation costs
One-time transition costs
Staffing reductions
Capital expenditures avoided
Estimated enrollment impact
Estimated revenue impact
First-year net savings
Annual recurring net savings
Five-year cumulative savings
Without this information, the Board cannot determine whether the reconfiguration plan actually addresses the financial problem.
TUSD's Financial Problem Is Larger Than Its Facilities Problem
This distinction is critical.
TUSD's presentation identifies declining enrollment, cross-subsidization among schools and the approaching override-tax-levy sunset as reasons for districtwide discussions about school size and configuration.
But the financial analysis needs to go further.
The Governing Board needs to see the entire chain:
Enrollment → ADM → WSC → Revenue → Expenditures → Fund Balance → Cash
Closing schools addresses the expenditure side of this equation.
It does not automatically solve declining revenue, competitive enrollment losses, historical operating deficits or liquidity pressure.
The Financial Plan Should Start With the Structural Deficit
Management should establish the size of the recurring financial problem before determining whether the proposed restructuring is sufficient.
For example, assume hypothetically that TUSD needs to eliminate $25 million of recurring annual expenditures.
If closing ten schools generates only $10 million in net recurring savings, TUSD still has a
$15 million structural problem.
The District would then need additional reductions in administration, staffing, programs, transportation or other operating costs.
That is why the number of schools being closed should be an output of the financial model, not an input.
There Is Another Problem: The Numbers Are Already Moving
The August presentation necessarily relies heavily on 2025-26 information.
But FY2027 is underway.
The September 15, 2026 information I have reviewed shows reported TUSD ADM of approximately 34,438, compared with approximately 35,966 in the July measurement.
That is a decline in the reported measure of approximately 1,527 ADM, or 4.25%.
Those figures should not be interpreted as proof that 1,527 individual students physically left TUSD between July and September. ADM is a reporting measurement and can be affected by timing and other factors.
But the direction deserves attention.
The reconfiguration analysis should therefore be updated as FY2027 student-count information becomes more reliable.
October 15 Should Be an Important Checkpoint
October should provide considerably more information.
As the first-40-day student information becomes available, we should have a better basis for evaluating the FY2027 enrollment trajectory.
The FY2026 Annual Financial Report should also provide another important set of financial information.
That will allow us to connect two important questions:
Where did TUSD finish FY2026 financially?
and
Where is enrollment taking TUSD during FY2027?
Those questions should be answered before the District commits itself to a long-term restructuring plan based principally on historical enrollment.
The Missing Piece Is Cash
Ultimately, the most important financial question is not how many buildings TUSD owns.
It is:
How long can TUSD's available financial resources support its current operating structure?
Fund balance and cash are not the same thing.
A school district can have accounting fund balances and still experience liquidity pressure.
Employees, benefits, utilities, transportation providers and vendors ultimately must be paid with cash.
That is why the reconfiguration analysis should be integrated into a multi-year cash-flow forecast.
For each proposed restructuring scenario, the Governing Board should be shown what happens to:
Revenue
Recurring expenditures
Fund balance
Cash
over at least the next three to five years.
TUSD Should Be Solving Two Problems
There are really two problems that need to be addressed simultaneously.
Problem One: TUSD Has Too Much Infrastructure
The District's own numbers establish this.
Operating at 58% overall facility utilization with 28,180 excess seats is difficult to justify financially over the long term.
School consolidation therefore deserves serious consideration.
Problem Two: TUSD Needs More Families to Choose TUSD
Closing schools does not solve this problem.
TUSD's own data show that a substantial number of students living within District boundaries attend other districts and charter schools.
That means the District also needs a strategy addressing educational quality, programs, customer experience, school choice and the reasons families select competitors.
Otherwise, TUSD could close schools for FY2027-28 only to find itself discussing additional closures the year.
The Governing Board Needs a Financial Restructuring Plan, Not Just a School Closure List
TUSD's “Reimagining Our Schools Together” presentation contains valuable information.
It makes a strong case that the District has substantial excess capacity.
It documents a long-term enrollment decline.
It demonstrates substantial competitive losses to other educational providers.
And it shows why maintaining the current configuration indefinitely is increasingly difficult.
But those facts should be the beginning of the financial analysis—not the end.
Before the Governing Board makes final decisions, management should demonstrate:
How large is TUSD's recurring structural financial imbalance?
How much recurring savings must be achieved?
How much will each proposed school consolidation actually save?
What additional expenditure reductions will still be necessary?
What effect could the changes have on enrollment and revenue?
And what does the resulting plan do to TUSD's cash position over the next several years?
The objective should not be to close ten schools.
The objective should be to create a financially sustainable school district that can deliver a consistently strong educational product with the resources and students it actually has.
TUSD's own presentation demonstrates that maintaining the status quo is increasingly difficult.
Now the District needs to demonstrate that the proposed solution is financially sufficient.
Or will the Arizona State Board of Education step in next year and place TUSD under a Financial Receiver to make all the hard calls?
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