ARIZONA FRAMEWORK FOR SCHOOL FINANCE Dr. Debra Bergman Assistant Superintendent & Hector M. Encinas...

ARIZONA FRAMEWORK FOR SCHOOL FINANCE

Dr. Debra BergmanAssistant Superintendent

& Hector M. Encinas

Chief Financial Officer

Overview Funding in the State of Arizona Equalization Formula Pros and Cons of the Finance

Structure Recommendations

Funding in the State of Arizona

How does Arizona compare to other states in funding education?

Arizona is 49th in funding local school districts out of the fifty states.


Why does Arizona have an Equalization Formula?

“…enact such laws as shall provide for the establishment and maintenance of a general and uniform public school system.”

The Equalization Formula is used to standardize/equalize the amount of funding a school district receives to educate each student regardless of differences in property values among districts.


How is the equalization process different from funding prior to 1981?

The equalization law establishes a formula that standardizes budget limits across school districts to fund annual budgets.


What components are included in the State Equalization Formula?

Main funding components of the formula are:•Base Support Level (BSL)•Transportation Support Level (TSL)•District Additional Assistance (DAA) (formerly known as Unrestricted Capital Outlay and Soft Capital Outlay)

Recent Legislative action has utilized reductions to DAA in order to minimize increases to School Budgets. “DAA reduction for State Budget Adjustments “


Base Support LevelPer pupil funding that goes

into a“pot” designated as

Maintenance and Operations.

Transportation Support Level

Money districts receive for transportation on

approved daily routes for 180 days of school for

eligible students.

District Additional AssistanceFunds for furniture, fixtures, technology and items expected to last more than one year and can also be “rolled over” to

M&O for M&O expenditures.


How does the formula determine what is allocated to each district?

The state determines a count of students by district (ADM).

The Base Support Level (BRCL) and the Transportation Support Level (TRCL) are added to arrive at the District Revenue Control Limit (RCL)

District Additional Assistance (DAA)per student allocations are multiplied by the number of students in each district (ADM).

The dollars are totaled and this sum becomes the “equalization base funding level” for each school district.


Major Funding Sources:State Equalization (State Aid)Local Funds (Primary and Secondary Property Taxes )

Federal Grants FundsState GrantsFederal Lunch Program Funds


Programs that generate additional funding for districts Maintenance

and Operations (M&O) and Capital outside the Equalization Formula: Overrides Bonds School Facility Board Budget Balance Carry Forward (4% limit) Desegregation Costs Dropout Prevention JTED Classroom Site Fund (Prop 301) Instructional Improvement Fund (AKA Indian Gaming Money) Student Success Fund Medicaid Reimbursement Fund


Pros of School Funding The implementation of the Equalization Formula has

provided lower property value districts funding equal to higher property value districts to educate their students.

Voters of Arizona approved an increase to the State’s sale tax by six-tenths of 1% to provide an inflationary funding increase annually in future years.

The legislature can provide full funding to districts of the inflationary funding, which would be $311 million for FY 15. The total amount of unfunded inflation money is in excess of $1.2 billion.


Cons of Arizona School Funding The state legislature hasn’t fully funded the Classroom Site

Fund for education. Revenue is shared with other governmental entities.

The state legislature hasn’t been funding the inflation factor. Class size has increased across districts due to budget cuts. The state per student allocation is too low and needs to be

increased by the legislature. If Sunnyside were to receive inflationary monies owed:

FY10-FY14 amounts would be in excess of $19.1 million FY15 amount would be approximately $5.2 millionFY16 amount would be $7.1 million


References: Arizona Department of Education | The Official Website of ... www.azed.gov/ade’s • Arizona Education Network www.arizonaeducationnation.com• Barchfield, Vanessa, “Public School Funding Key Issue Election”

September 30, 2014, Public Education in Arizona.• Judge: Arizona owes public schools more than $300 M

Http://tucson.com/news/state-and-regional/judge-arizona-owes-public-schools-more-than-...

• Arizona School Finance Summary Manual, Arizona Association of School Business Officials, December, 2013 www.aasbo.org

• Fischer, Howard, “Brewer: State should pay schools what they’re owed,” Capitol Media Services, Arizona Daily Star, October 1, 2014.

http://tucson.com/news.local/education/brewer-state-should-pay-schools- what-they-re-owe

ARIZONA FRAMEWORK FOR SCHOOL FINANCE Dr. Debra Bergman Assistant Superintendent & Hector M. Encinas...

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