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School Finance in Arizona Chuck Essigs AASBO. 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

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slide2

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

how is the budget limit established revenue control limit rcl
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

2008 09 group a concept elementary and high school
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”

small school district funding weights 2008 09 school year
Small School District Funding Weights2008-09 School Year

Elementary High School

District Small Small

Size Isolated SmallIsolated 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

group b add on
Group B Add-On

CategoryWeightAmount

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

group a concept
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
group b concept
Group B Concept

Extra funding for Expenditures for

specific students = specific

students

  • Identification criteria clear
  • Parents follow programs
capital outlay revenue limit corl note 64 transferred to m o
Capital Outlay Revenue Limit (CORL) Note: 64% transferred to M&O

Unweighted Student Count

times

Support Level

times

CORL growth factor

plus

High School Texts

soft capital
Soft Capital

Unweighted Student Count

times

Support Level

2008 09 corl and soft capital amounts
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

additional assistance charter schools
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

district base level add ons
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
equalization concept
Equalization Concept

School District Spending Limit(Equalization Base)

minus

Local Contribution

(QTR)

equals

State Aid

(Equalization Assistance)

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

(district’s 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

(district’s 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)

Two Hypothetical Unified Districts
some district budget categories
Some District Budget Categories . . .
  • are paid from local property taxes . . .
  • . . . causing issues with per-pupil spending and taxation
m o overrides
M&O Overrides
  • M&O Overrides
    • 10% of RCL
  • K-3 Overrides
    • 5% of K-8 RCL
other items outside equalization base fy 2008
Other Items Outside Equalization Base, FY 2008
  • Desegregation
  • Adjacent Ways
  • Excess Utilities
  • Transportation RCL
  • Small School Dist.
  • Dropout Prevention
  • Registered Warrants
inflation funding 1991 92 through 2000 01
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
prop 301 implemented in 2001 02 school year
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.
inflation impact post prop 301 continued
Inflation Impact – Post Prop. 301 (continued)

2001-02 2.2 2.0 <0.2>

2002-03 2.4 2.0 <0.4>

2003-04 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***** <0.22>

2008-09 2.7 2.0 <0.7>

* 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

YearActual Rate * Funding Inc.** Variation

education week rankings
Education Week Rankings

Adequacy of Funding

  • Rank 49th out of 50
  • Arizona $7,112 vs. national average of $9.963
education week rankings1
Education Week Rankings

Education Spending Per Pupil FY2006 (Operational)

RankStateAmount

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

american legislative exchange council alec
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)
move to national average
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
also part of the spending per pupil discussion capital spending
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
slide27

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)

slide28

School District Governing Board Allocates Funds to

Regular, Special and Pupil Transportation Program from

Budget Limit

Budget Limit

Regular

Education

Special

Education

Pupil

Transportation

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

slide29

Budget Limit Increase

No

GrowthGrowthDecline

New students 2% 0 <3%>

Plus inc. amt./stu. + 2% + 2% + 2%

4% 2% <1%>

Hire new Salary Cuts staff + Increase salary increase

slide30

Salary and Benefits

85 – 90% of operating budget

slide31

Taxpayer

Parents

and

Community

Employees

More Services More Services

Taxes High Quality Higher Salaries

Governing Board

Budget

slide32
Not enough dollars to meet demands

Formula / Legislature

  • Dollars not being spent effectively

Budget Allocation / School District

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