Arizona

Issues, Trends, and Priorities Affecting P–12 and Higher Education Funding

Historically, investment in education has been very low in Arizona even though education is the largest state budget item at 41%.¹ Over the past decade, Arizona has placed near the bottom in K-12 per-pupil expenditure when compared to other states. For example, in 2010, Arizona ranked last among the 50 states and the District of Columbia with an average appropriation per student of $6,708 compared to the median of $11,089.² Arizona spending per pupil adjusted for inflation has decreased by 24% since 2008.³

There have been several attempts to reasonably, equitably, and adequately fund P–12 education in the past several years through the courts (e.g., Roosevelt v. Bishop 1994; Horne v. Flores 2009) and state propositions (e.g., Proposition 301; Proposition 204). These attempts, among others, have challenged how public education funding is appropriated, collected, or distributed. Although it has been debated for some time whether Arizona has met its constitutional commitment to provide a comprehensive and adequate education, it is clear there has been a significant amount of action related to educational funding without increased funding or higher student outcomes.

Recent legislative action has attempted to undermine and underfund funding for public P–12 education in Arizona. For example, in 2011, the legislature chose to cut full-day kindergarten, which has been instituted five years earlier.⁴ Tax cuts as well as property tax and income tax rollbacks have all contributed to dwindling state funds. For example, the 2006 state equalization property tax gave tax breaks to homeowners during the peak of the recession that were to be retracted; however, these tax cuts were not withdrawn. In the 2013 legislative session, Senate Bill 1444 would have tied funding to school performance on the A–F accountability system. The governor requested $38 million, but eventually this amount was reduced to $2.6 million for an exploratory/pilot program. The concept of performance-based pay has come up in Arizona previously. Senate Bill 1443 attempted to tie teacher salaries to performance, but was not passed into law. One of the most recent pieces of legislation is House Bill 2617. This bill expanded the types of corporations eligible to participate as donors in the Grand Canyon State Scholarship tax credit. Ultimately, continuous legislation is problematic without clear reporting and oversight guidelines to ensure funds are used appropriately, and Arizona may for many years continue to struggle with public education funding.

The recession saw the state university system funding cut by approximately 50% per student, placing Arizona at the top when it comes to higher education funding cuts at a time when overall enrollment was going up in the state.⁵ Although there is hope that recovery from the recession will allow for more funding for higher education, Arizona would need to see an increase of more than 50% to reach previous levels, taking into account inflation.

Higher education legislation has prioritized funding into a few strategies. Senate Bill 1293 is an outcome-based pilot program that creates a competitive funding stream for universities in order to align STEM courses to assessments that coincide with college placement tests. House Bill 2090 would appropriate $15.3 million to phase out the funding disparities among the state's three major universities: Arizona State University, Northern Arizona University, and the University of Arizona. Eliminating these disparities would provide students at all three universities equal opportunity to a quality higher education.

Recent Changes to the Funding Formula for P–12 and Higher Education

K–12 education in Arizona is governed by the state constitution, Title 15 of Arizona Revised Statues, and State Board of Education regulations, and guarantees a “general and uniform” education. At the K-12 level, Arizona uses a foundation plan with an equalization formula. Recently with Senate Bill 1487, changes have been made to the soft capital allocation (SCA) and the capital outlay revenue limit (CORL), consolidating these two funding streams into one known as District Additional Assistance (DAA). With the consolidation of the CORL and SCA, the state has claimed...