The Budget Dance Continues
House and Senate leadership introduced a budget plan Monday evening that significantly increased spending on K-12 education over a previous version that was universally panned by Democrats and Republican budget holdout Sen. Paul Boyer, as well as by a group of Republicans who would essentially rather not spend any of the state’s $5B surplus. This plan has made its way through House Appropriations Commitee, and Senate Appropriations was working its way through the bills as of this afternoon.
The Legislature Giveth
This version includes increases in the base level above inflation, as well as increases in special education funding, district and charter additional assistance, and additional one-time increases in building renewal. All told, by our calculations it increases spending in the K-12 formula and building renewal by about $735M over FY22:
2% base level inflation increase required by Prop. 301—$137M
2.5% base level increase (offset by the elimination of teacher comp funding, more on that below)—$99.3M
Additional 3.4% base level increase—$230M
Special Education Weight Increase—$100M
District and Charter Additional Assistance Increases—$60M
Building Renewal Grant Funding—$109M
The Legislature Taketh Away
Also included is the elmination of teacher compensation funding for districts. Charter schools are not eligible for this funding. Districts may receive a 1.25% increase in their base level upon approval of a teacher performance pay plan by the State Board of Education. Under the plan, districts would no longer be able to do that, but would also receive a 2.5% increase in the base level, as would charter schools. For districts that routinely get the teacher comp funding, this is effectively a net increase of 1.25%. Teacher Experience Index (TEI) funding would remain available under this plan.
The Legislature Cutteth Property Taxes
A large provision of the budget package is a $330M appropriation to eliminate the Statewide Equalization Tax Rate (SETR). While substantial, the practical impact is to essentially replace a small portion of property tax liability for the education formula with general fund dollars. The net impact to school districts from the elimination would be $0. The elimination of this tax rate primarily benefits the owners of hihg-value commercial property, as the SETR is low enough that most homeowners will not notice a significant impact on their tax bill.
It Can’t Be a Budget Unless we Talk ESAs
The House today passed HB2853 Arizona empowerment scholarship accounts; appropriation (Toma), a universal expansion of the ESA program to all students grades K-12. There is one notable change from the summary—the bill was amended to remove the already incredibly weak accountability provisions from the bill. Therefore no student who receives an ESA will be held to any academic accountability, let alone the same standards as district and charter schools. The bill must now receive a committee hearing in the Senate. The summary will be updated as soon as possible.
Hope for Additional Funding Springs Eternal
The Legislature continues to debate budget bills at this time. If you’re serious about keeping up to the minute, you can watch live or follow along with AZEdNews. As of this writing, there were still Senators and likely some House members not willing to vote for the budget as it stands, including Sen. Paul Boyer who has made no secret of his desire for substantial K-12 funding this year. Comments from House members indicating they think the budget already spends too much sets the state for a deal with Democrats, which could include more dollars added to the base level, a poverty/opportunity weight, and some changes to the allocation of the planned $60M in district and charter additional assistance.
If a budget deal is inked tonight, we will provide you with an update as soon as the facts are known.