School Finance in Arizona Chuck Essigs AASBO

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School Finance in ArizonaChuck EssigsAASBO
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Funding of Schools

• 1900 - 1950
• Very little state assistance
• Very little state control
• Ability to fund educational programs
• based upon wealth of community
• 1950 Today
• Gradual increase in state assistance
• Gradual increase in state control
• Higher level of equity between school
• districts

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How is the Budget Limit Established?Revenue
Control Limit (RCL)

• 1. Regular ADM of the District
• a. Preschool Handicapped
• b. K-8 Students
• c. 9-12 Students
• 2. Special Program Add-ons
• a. Certain Handicapped Students
• b. Limited English Learners (ELL)
• c. K-3 Students
• d. All K students
• 3. Teacher Experience Index
• 4. Pupil Transportation Program

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2008-09 Group A ConceptElementary and High School

• Basic Wt. Group A Wt.
  Total
• Elem. 1.00 0.158 1.158
• 3,332 526
  3,858
• 1.163 0.105 1.268
• H.S. 3,875 350
  4,225
• Regular education - special services
• Specific learning disability Emotional
  disability
• Mild mental retardation Remedial
  education
• Speech/language impairment Homebound
• Other health impairment Bilingual
• Preschool/speech lang. delay Gifted
• Preschool/moderate delay Career Exploration
• Includes 1.25 for Teacher Compensation

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Small School District Funding Weights2008-09
School Year

• Elementary
  High School
• District Small
  Small
• Size Isolated Small
  Isolated Small
• Over 600 3,858 3,858
  4,225 4,225
• 500
• 400 increases up to
• 300
• 200
• 100 5,194 4,560 5,560 5,194
• Isolated no schools within 30 miles of another
  district or if road conditions and terrain make
  the driving slow or hazardous 15 miles

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Group B Add-On

• Category Weight
  Amount
• K 1.352 4,505
• K-3 0.060 200
• English Learners 0.115
  383
• Disabled Students Range from 10,502 to
  25,711
• Hearing Impaired, Multiple Disabilities,
  Physically Impaired, Moderate Mental Retardation,
  Severely Emotionally Disabled and Visual
  Impairment
• at 0.50 2,252

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Group A Concept

• Extra funding for Expenditures for
• every student special needs
• students
• No financial incentive to put student in
• No financial incentive not to end services
• Assumes fairly equal distribution of students

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Group B Concept

• Extra funding for Expenditures for
• specific students specific
• students
• Identification criteria clear
• Parents follow programs

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Capital Outlay Revenue Limit (CORL) Note 64
transferred to MO

• Unweighted Student Count
• times
• Support Level
• times
• CORL growth factor
• plus
• High School Texts

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Soft Capital

• Unweighted Student Count
• times
• Support Level

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2008-09 CORL and Soft Capital Amounts

• CORL K-8 225.76
• CORL 9-12 267.94
• CORL textbooks 9-12 69.88
• Soft Capital 225.00
• Same amount since 1998-99 for all areas

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Additional AssistanceCharter Schools

• Charter Schools / CORL, Soft Capital, Pupil
  Transportation, School Facilities Board (SFB)
• Additional Assistance 2008-09
• K 8 1,474.16
• 9 12 1,718.10

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District Base Level Add-ons

• Teacher compensation
• Increase Base Level by 1.25 in SBE approves
  performance evaluation system i.e.
  certification
• Teacher experience index
• 2.25 increase to BSL for each year of experience
  above average
• Career ladder
• 28 districts get additional 5.5 increase to Base
  Level

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Equalization Concept

• School District Spending Limit (Equalization
  Base)
• minus
• Local Contribution
• (QTR)
• equals
• State Aid
• (Equalization Assistance)

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Two Hypothetical Unified Districts

• Property Rich
• 3,226.88 x 1,000 (weighted ADM)
• 3,226,880 guaranteed
• Local property taxes
• 50,000,000/100
• (districts taxable value)
• x
• 2.9244 QTR
• equals 1,462,200
• (45 of guaranteed amount)
• State ( county)
• 3,226,880 minus 1,462,200
• equals 1,764,680
• (55 of guaranteed amount)

• Property Poor
• 3,226.88 x 1,000 (weighted ADM)
• 3,226,880 guaranteed
• Local property taxes
• 25,000,000/100
• (districts taxable value)
• x
• 2.9244 QTR
• equals 731,000
• (23 of guaranteed amount)
• State ( county)
• 3,226,880 minus 731,100
• equals 2,496,780
• (77 of guaranteed amount)

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Some District Budget Categories . . .

• are paid from local property taxes . . .
• . . . causing issues with per-pupil spending and
  taxation

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MO Overrides

• MO Overrides
• 10 of RCL
• K-3 Overrides
• 5 of K-8 RCL

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Other Items Outside Equalization Base, FY 2008

• Desegregation
• Adjacent Ways
• Excess Utilities
• Transportation RCL
• Small School Dist.
• Dropout Prevention
• Registered Warrants

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Inflation Funding 1991-92 through 2000-01

• Increases to Base Level
• Increase less than inflation for 9 or 10 years
• Inflation funding covered one-third of actual
  inflation

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Prop. 301 / Implemented in 2001-02 School
year

• For first 5 years 2
• For FY2006-07 and each year thereafter, the
  Legislature is required to increase the Base
  Level or other RCL components by the lesser of 2
  or the price deflator.

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Inflation Impact Post Prop. 301 (continued)

• Year Actual Rate Funding
  Inc. Variation

2001-02 2.2 2.0 lt0.2gt 2002-03 2.4 2.0 lt0.4gt 2003-0
4 1.7 2.0 0.3 2004-05 2.9 2.0 0.9 2005-06 2.2
3.2 1.0 2006-07 3.2
4.4 1.2 2007-08 3.2 2.98
lt0.22gt 2008-09 2.7 2.0 lt0.7gt
Percentage growth in the GNP price deflator
Percentage increase in the base level funding
factor as provided in A.R.S.
15-901 Includes an additional 1.2 for
retirement/health insurance Includes an
additional 2.4 for retirement/health insurance
and increase salary for non-administrative
personnel Includes 0.98 for increased
salary for non-admin. personnel
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Education Week Rankings

• Adequacy of Funding
• Rank 49th out of 50
• Arizona 7,112 vs. national average of 9.963

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Education Week Rankings

• Education Spending Per Pupil FY2006
  (Operational)
• Rank State
  Amount
• 1 Vermont 15,139
• 2 Wyoming 14,128
• 3 New Jersey 13,238
• Avg. U. S. 9,963
• 48 Nevada 7,213
• 49 Arizona 7,112
• 50 Utah 5,964

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American Legislative Exchange Council (ALEC)

• Arizona (2005-06) (Operations)
• Expenditure Per Pupil rank next to last
• Pupil/Teacher Ratio 21.3 vs. national average
  of 15.2
• Pupil/Teacher Ratio rank next to highest (only
  Utah at 22.1 puts more kids in each class)

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Move to National Average

• Using ALEC data, Arizona is 2,956 below national
  average
• 46 increase to move to average
• Estimated cost is 3 billion
• 2 inflation - 100 million
• 30 years of extra 2 needed

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Also Part of the Spending Per Pupil Discussion /
Capital Spending

• Arizona ranks near the top for
• student growth
• capital expenditures per pupil
• student/teacher ratio

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Other Major Revenue Sources 2008-09

• Classroom Site Fund Prop. 301
• (470 per student / 390 per weighted count)
• Instructional Improvement Fund
• Indian Gaming (40 per student)

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School District Governing Board Allocates Funds
to Regular, Special and Pupil Transportation
Program from Budget Limit
Budget Limit
Pupil Transportation
Special Education
Regular Education
Special Ed. includes A. Programs for the
handicapped B. Gifted education C. Programs
for LEP students D. Remedial education E.
Vocational and technical education F. Career
education
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Budget Limit Increase
No
Growth Growth Decline New
students 2 0
lt3gt Plus inc. amt./stu. 2
2 2
4 2 lt1gt
Hire new Salary
Cuts
staff Increase

salary increase
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Salary and Benefits
85 90 of operating budget
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Employees
Parents and Community
Taxpayer
More Services
More Services Taxes
High Quality Higher Salaries
Governing Board
Budget
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• Not enough dollars to meet demands
• Formula / Legislature
• Dollars not being spent effectively
• Budget Allocation / School District