SUSD Funding Facts
Arizona is 47th in education per pupil funding, according to the 2021 U.S. Census Bureau.
Each year, the school district administration proposes the annual budget, which is then reviewed, finalized, and approved by the community-elected governing board. SUSD has made great strides to be transparent with budgetary decisions by posting transactions online, live streaming board meetings, and involving community members in the budgeting process. The Bond Oversight Committee also works to ensure voter approved dollars are spent wisely and in accordance with what was promised during the election.
SUSD continues to have the lowest combined tax rate, including the current bond and overrides, among our peer districts.
How are Schools Funded in Arizona?
School Funding in Arizona is based on the State Legislature. There are multiple budget categories some of which are funded by the State, others by the State and Federal Grants, and some by donations and/or payments made to the School District. These categories include Maintenance and Operations (M&O), District Additional Assistance (DAA), Classroom Site Fund, Instructional Improvement, State and Federal Grants, Bonds, and Special Revenue Funds.
This past year, a bipartisan budget was approved with a substantial increase in funding for K-12 education. However, without action to override the Aggregate Expenditure Limit all district public schools would be required to reduce their budgets by an equal % (estimated to be 17% this year) beginning April 1, 2023. The total impact is estimated to be $1.3 billion. These cuts would have a catastrophic impact on many districts since the amount districts are authorized to spend will be reduced with only two months remaining in the school year and three months in the fiscal year. For Scottsdale, it represents $28.4 million or the equivalent of 6.5 weeks of school.
School Funding Sources
Buildings & Vehicles
Districts may seek voter approval to sale bonds to acquire or lease school sites, construction, or renovation school buildings, supplying school buildings with furniture, equipment, and technology, improving school grounds, purchasing pupil transportation vehicles, or paying existing bond debt. Bond proceeds cannot be used to purchase items whose useful life is less than the average life of the bonds issued or whose useful life is less than five years. Bond funds can only be spent on items within the bond approved pamphlet categories.
Classroom Site Fund
Classroom Site Fund, originally known as Prop 301, was established in fiscal year 2002. Money for this fund was generated from state sales tax collections and State Trust Land revenue. The funds were to provide additional revenue for teacher salary increases and other specified maintenance and operation purposes.
District Additional Assistance
Capital purchases, such as furniture, fixtures, equipment, workbooks, kits, sheet music, textbooks, curriculum, and HVAC units.
A District Additional Assistance (DAA) budget override allows a school district to levy a tax to pay for capital equipment items that cannot be purchased by the district’s regular capital budget and that is not included in a district’s current bond program.
Instructional Improvement was established in Fiscal Year 2003-2004. Revenue for this fund is generated from Indian Gaming. Up to 50% of this fund may be used for teacher compensation increase and class size reduction. The remaining funds must be used for drop-out prevention programs and instructional improvement programs, including programs to develop reading skills for students by the end of 3rd grade.
Maintenance and Operations (M&O)
Salaries, Benefits, Utilities, Supplies and Services
Since 1980, the Arizona Legislature has allowed school districts to supplement their base budgets by asking voters in their local districts to approve a budget override. If approved by voters, this allows districts to continue to supplement their operation budget by 15% more each year than the state provided funds. Overrides are in place for seven years scaling down the last two.
Prop. 123 is a referendum passed by the Legislature in October 2015 and approved by voters in a special election held Tuesday, May 17,2016. Prop. 123 is estimated to generate $3.5 billion over 10 years for Arizona schools. The majority will come from the increased payout of the State Land Trust. Additionally, $625 million will come from the general fund ($50 million for the first five years and then $75 million for the next five years).
Prop. 123 settles the inflation funding lawsuit that the Arizona Supreme Court ruled on in September 2013. It provides a dedicated revenue source for incremental inflation adjustments (as passed by the voters in Prop. 301 in the 2000 election). Schools will receive this funding starting in June 2016.
Specialty Revenue Funds
State and Federal Grants
State Grants are allocated to school districts based on grant requirements. Examples of State Grants that SUSD receives are Vocational Education grants, College Credit Exam Incentives, and Results-Based Funding.
Federal Grants are awarded to schools for various reasons from the Federal Government. For example, SUSD receives Title I funds, which is for helping disadvantaged children. Other Federal grants include Title Grants, Special Education Grants, Indian Education Grants, Vocational Education Grants, Medicaid Reimbursement, and Elementary and Secondary School Emergency Relief Funds.
Voter Approved Additional Funding