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School Finance in Arizona Chuck Essigs AASBO
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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 Concept Elementary and High School Basic Wt. Group A Wt. Total* Basic Wt. Group A Wt. Total* Elem. 1.000.158 1.158 $3,332 $526 $3,858 $3,332 $526 $3,858 1.1630.105 1.268 1.1630.105 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 Weights 2008-09 School Year Elementary High School 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 300200 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 Category Weight Amount K 1.352 $4,505* K-3 0.060 $200 English Learners 0.115 $383 Disabled StudentsRange 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 forExpenditures 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 forExpenditures for specific students =specific students Identification criteria clear Parents follow programs
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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
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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 Assistance Charter 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 Teacher compensation –Increase Base Level by 1.25% in SBE approves “performance evaluation system” i.e. certification Teacher experience index Teacher experience index –2.25% increase to BSL for each year of experience above average Career ladder 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 (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)
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Some District Budget Categories... are paid from local property taxes... are paid from local property taxes...... causing issues with per-pupil spending and taxation... causing issues with per-pupil spending and taxation
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M&O Overrides M&O Overrides M&O Overrides –10% of RCL K-3 Overrides 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 Increases to Base Level Increase less than inflation for 9 or 10 years Increase less than inflation for 9 or 10 years Inflation funding covered one-third of actual inflation 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 2001-022.22.0 2002-032.42.0 2003-041.72.00.3 2004-052.92.00.9 2005-062.2 3.2***1.0 2006-073.2 4.4****1.2 2007-083.2 2.98***** 2008-092.72.0 * 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 1Vermont$15,139 2Wyoming$14,128 3New Jersey$13,238 Avg.U. S. $9,963 48Nevada$7,213 49Arizona$7,112 50Utah$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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Budget Limit School District Governing Board Allocates Funds to Regular, Special and Pupil Transportation Program from Budget Limit 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 Special Education Regular Education
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Budget Limit Increase No Growth Growth Decline New students 2% 0 Plus inc. amt./stu. + 2% + 2% + 2% 4% 2% Hire new Salary Cuts staff + Increase salary increase
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Salary and Benefits 85 – 90% of operating budget
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Governing Board Employees More Services More Services Taxes High Quality Higher Salaries Parents and Community Taxpayer Budget
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Not enough dollars to meet demands Not enough dollars to meet demands Formula / Legislature Dollars not being spent effectively Dollars not being spent effectively Budget Allocation / School District
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