K-12 funding modernization clears House committee

Legislation that would mark the first significant update in decades to Arizona’s K-12 public school funding formula by centering it on students rather than by type of school passed the House Appropriations Committee on Monday.

An amendment by Rep. Michelle Udall, R-Mesa, to S.B. 1269, sponsored by state Sen. Vince Leach, R-Saddlebrooke, would allow school districts, with approval from their voters, to opt into a “State Student Funding Formula,” which would be comprised of state base level support and state additional assistance. 

School districts whose voters approve the shift to the new funding system would no longer be able to ask those same voters to approve bonds and overrides or other local tax levies. 

“The time is now to fix these issues we have been talking about for years,” said Matthew Simon, vice president for government affairs and advocacy for Great Leaders Strong Schools. “This is an opportunity for school districts to have a different kind of conversation with their voters and adopt a stable, reliable source of funding for their schools; it’s an opportunity to close the glaring inequities for students simply based on where they attend school. The status quo attempts and fails to equalize funding between systems. This legislation seeks fairness for students.”

Under the current funding formula, the per-pupil funding rate can vary widely from district to district, as some districts are unable to pass bonds and overrides, while others’ voters reliably support the measures at the polls. 

“Some of the largest funding disparities are between school districts where taxpayers build and improve schools and those districts where the will or wealth to do so does not exist,” according to research released last month by A for Arizona.

According to the same report, rural school districts, such as Lake Havasu Unified School District, only received 63% of the funding per student that Phoenix Union High School District received in fiscal year 2020. Maricopa and Pima counties are the only counties in the state where voters in more than half of districts have approved override funding.

Simon pushed back against critics of the legislation who claim that poorer districts are likely to face a cut under the modernized funding model.

Simon pointed to three high-poverty urban school districts, Isaac, Balz, and Murphy Elementary, all of which are in line for funding increases. 

“Opponents of this bill will continue to proclaim that we just need to infuse a billion more dollars into an already unfair system,” he said. “However, the strike everything amendment is a fiscally prudent solution to incrementally reform our system to better reflect our state’s current realities.”

Leach, the bill sponsor, said reform to the formula has been a long time coming.

“It is time we do something. The current formula was put together when I was still a kid,” he testified during the committee hearing. “It’s time we look at it, revise it, and even things out to get the best results.”

Sean Rickert, the superintendent of Pima Unified School District in rural Graham County, said that going to his voters to approve an override is unlikely.

“In order for me to get an override, I’d have to double my local property tax because I don’t have very much assessed valuation,” he said. “You’re not going to get voters to vote for that.”

The legislation to create the new opt-in formula, however, would be a boon to districts like Rickert’s.

“This provides an alternative,” he said. “This provides a way for me to get the funding that charter schools get, and I can fund my schools at that level.”

In addition to Great Leaders Strong Schools, supporters of the bill include business community groups like the Arizona Tax Research Association, and school choice and reform groups. 

Opponents include interest groups for school system employees, as well as supporters of Proposition 208, a 2020 ballot measure to increase Arizona’s top income tax rate by 78% that was ruled to be unconstitutional earlier this month. 

The bill passed the committee on a party line vote. After some procedural steps, it can be considered by the full House and then the Senate for a final vote.