71030 Arizona School Finance

I have just returned from Arizona Business and Education Coalition’s three hour “Crash Course on School Finance.” What fun.!

This meeting was held within the larger context the start of an approximately three year study, analysis and legislative initiative to transform Arizona K-12 school finance both on the budget process (the goes’outta – an aeronautic-fluid dynamics turbo jet engine term) and the tax and revenue side (the goes’inna). The last time this occurred was in the mid 1970’s to early 1980’s based in David Kret’s work as the Senate Majority Leader.  The focus then was to rectify the debilitating inequity between schools.

Chuck Essigs Director of Government Relations for the Arizona Assoc. of School Business Officers and Michael Hunter Senior Policy Advisor for Budget and Finance for the Arizona State Senate Policy Advisor passed the microphone back and forth as 40 slides rolled across the screen.

History: Almost no state support of schools until 1950. In 1974 the legislationi initiated an equitable funding (equal $/student) design to address the range from $500 per student to $1500 per student. 1980 legislation reduced disparities in tax rates where the state taxes sales and income; and districts tax property. By 1987 equalization was had been realized. The 2006 the funding buckets are: 47% State, 38% local, 2% county and 13% federal.

With state funding came state control. Today the (approximate) $9000 per student is $5500 under formula, $2500 non-formula and $1000 federal. The controlling budget capacity categories are Base Support Level, Capital Outlay Revenue Limit, Soft Capital Allocation and Transportation Support.

The State was supposed to increase school funding per student by 2% or inflation rate if higher. In the 1990’s the schools were under funded every year and entered 2001 with a 16% deficit in funding. With low inflation and increased funding the current deficit is about 13%.

Arizona ranks 49^th out of 50 for adequacy of funding; 78% of national average and with average equity between districts. The per student allocation to teacher salaries is worst in the nation. But with high number of students in classes the average teacher earns $42,905 which is 27^th in the country.  Compared to per capita income of Arizona residents, what Arizona spends on teacher salaries is the worst.

Arizona rates at or near the top for: student growth, capital expenditure per student, student/teacher ration (full classrooms) and new teacher recruitment demands. Salary and benefits are 85-90% of operating budgets.

Two of the panelists address the future. Classroom Site Fund (Prop. 301) currently at $500 per student is a great help and does not require legislation each year. State Treasurer Dean Martin described his ongoing work with creating billions of dollars in an endowment fund from state land sale. With wise investment the net yield of 4% above inflation will provide another funding source not dependent on legislation.

Jim Zaharis VP Greater Phoenix Leadership stated the business case. ABEC with itsi integrated business and education cadre is positioned to study and lead in the funding formula redesign. GPL has a notion the K-12 is absolutely essential to Arizona’s 21^st century diversified economy. Any formula must address actual costs, gaps, diverse needs, 1,100,000 (going on 1,400,000 in ten years, TedtheEd) students, targeted funding and increases. (with soft capital frozen at 2000 levels TedtheEd) equipment funding must addressed for improvement of schools. There must be incentives for efficiency and accountability in graduation rate and academic performancei. Districts need and deserve stability for 2 to 3 year periods. Forward funding is need so excessive lobbying each year is not necessary. Resource allocation within the district requires direct funding for equity. Data base must be used to address districts quality of wealth and quality of students. Must have both state and local contributions. Additional funds require voter approval. Rodel study “Lead with Five” examined where to focus funds (in legacy education Ted the eD) for 0-5 education, all day kindergarten (done-deal), smaller schools, K-3 class size, and targeting extra resources to struggling students.

Marty Schultz of APS Myriam Roa CEo of Phoenic Elementary School District spoke to the issues that education is a complex reality. Funding into the classroom is laudable. To a truly effective classroom has a system of support services that must also be funded. Counselors, librarians, technology and curriculum directors, mentor-master teachers and others are “close to the classroom” and are vital. Contrary to myth, Arizona is below the national average in funding administration. To keep the lights on, the air conditioners running and the water flowing in the rest rooms – utilities are just as critical.

Sorry about the more than one page blog. Too much good information to cut it short.

In the question-answer period I (first to the microphone to break the ice) asked the grand panel of 5 plus two speakers:

“How are you going to address the school financing issue you assume that eLearningi transforms K-12 education and the additional costs from computers to teacher profession development are more than balance with cost savings from accelerated student learning?” The two issues I did not raise were: 

1. As elearning moves individual students on personal learning plans out of seat time in a calendar year to an achievement of an academic year of learn, how is your new financial plan going fund the schools to move that student forward grade level to grade level?

1. Since equity in funding has been achieve between +6% to -3% isn’t  how are your going to integrate the mish-mash of convoluted funding overlays nto one grand scheme for adequacy for each student, class, school and district?

The eLearning issue reoccurred several times during their Q&A session before I dashed to rescue my van at a 2:30 at a 2:00 parking meter.

There is hope!