This Week in Education Legislation: The Last Hurrah (for Now!)
Happy Thursday! It’s been a busy several weeks here at ASBA as we’ve juggled several priority efforts and navigated the budget proposals; thank you for bearing with us during this short break in updates! This newsletter will likely be the last one covering major developments from the 57th Legislature’s First Regular Session, but don’t worry! We will continue to keep you informed during the interim if any major education updates come up. To help break down the final budget and what it means for schools, ASA (Arizona School Administrators), AASBO (Arizona Association of School Business Officials) and ASBA will be cohosting a webinar; details and registration information can be found below. As we wrap up the session and head into the holiday weekend, we wish you a safe and joyful Fourth of July. We’re grateful for your continued engagement, so read on for what may be the final legislative highlights of the session!
From Capitol to Classroom: Budget Wins
After weeks of tense negotiations and a looming government shutdown, Arizona lawmakers ultimately came to an agreement on the state budget just in time. While the process was rocky, marked by disagreements between chambers and delays in finalizing proposals, the result includes key investments in K-12 education. From inflationary adjustments to new funding for student support programs, here’s a breakdown of what made it into the final FY26 education budget that was signed into law on June 27th, 2025.
Budget Bills:
Increases formula funding by 2% for inflation
Sets the base level for FY26 at $5,113.26
Appropriates $6.82B in Basic State Aid
Includes $72M from the permanent state school fund and state trust lands
Appropriates $29M for a one-time supplement to additional assistance
$23.1M for District Additional Assistance, $5.9M for Charter Additional Assistance
Districts can budget this money in either their M&O fund or unrestricted capital outlay funds
Appropriates $37M to ADE as a Group B supplement using weighted student count for FRPL students (to eliminate copayments for children eligible for reduced price meals)
Appropriates $228K to SBE for increased staff to manage ESA appeals
Appropriates $500K to ADE for automated external defibrillator grants to public high schools with an athletic team or sports program for grants for the purchase or maintenance of automated external defibrillators.
Requires public high schools with an athletic team or sports program to provide an automated external defibrillator (AED) at each school campus and school-sponsored athletic event. The AED must be in an unlocked location, can be promptly retrieved, and is maintained in good working order.
A school district or charter school may accept gifts, grants, and donations for purchase and maintenance of AEDs.
Requires ADE to prioritize schools with free and reduced-price lunch eligibility of 50% or more
Appropriates $3.4M to ADE for Ninth Grade On Track Program
Establishes the High School Success Grant Program within ADE to provide grants to high schools for assisting ninth grade students to earn sufficient credits to be on track for on-time graduation.
Establishes a per student grant funding amount of $150 per ninth grade pupil
Caps total enrollment at 22,650 students in FY26.
Appropriates $400K to ADE for contracted third party vendor expenses for implementation of assessments in a virtual setting
Recalculates basic state aid for the following school districts in FY25 for the recalculation of district assessed valuation:
$435,400 for Hyder ESD
$789,200 for Antelope UHSD
$360,700 for STEDY
$109,300 for Bonita ESD
Makes changes to the small school adjustment, retroactive from June 30, 2025 to December 31, 2026. To be eligible, a school must:
Be in a county with population between 200,000-210,000
Have a K-8 student count between 125-150
Have a K-8 student count less than 125 in prior year
Continues to allow ADE to expend monies in FY25 from the Failing Schools Tutoring Fund for school improvement.
SCR 1041 and 1042
Waives the Aggregate Expenditure Limit for FY26 and FY27
HCR 2031
Submits a question for voter approval at the next general election on the continuation of Prop. 123
Amends the Arizona Constitution to prohibit the state from reducing the Permanent State School Fund’s annual distribution rate below 6.9% until FY36
HCR 2058
If the voters approve the language in HCR 2031 to increase the distribution rate of the Permanent State School Fund, requires school districts and charter schools to increase the base salary level of all “eligible teachers.”
Defines “eligible teachers” as an employee of a district or charter school who:
Is employed for a full school day or full class load as determined by ADE
Spends more than 75% of their time on non-administrative activities that provide instruction to students
OR:
Is employed as a special education teacher for a full school day or full class load as determined by ADE
Devotes more than 50% of their time to support student academic achievement
Does not include administrators or teachers who have been designated in either of the two lowest performance classifications
Allows a school district or charter school, in any budget year in which its estimated total current expenditures per pupil is below its total current expenditures per pupil calculated by ADE for FY26, to:
Reduce the base salary of eligible teachers below the base salary reported to ADE in FY26 by an amount that does not exceed the percentage reduction in the total current expenditures per pupil for the budget year compared to the total current expenditures per pupil for FY26
Apply the base salary reduction only to the current budget year
Requires ADE to administer the Teacher Pay Fund and outlines reporting requirements
As a reminder, unless otherwise specified, all bills that have been signed into law during the 2025 legislative session will go into effect on the general effective date: September 26, 2025.
Be sure to review any new requirements or implementation timelines associated with legislation impacting your district. If you're a Policy Services subscriber with ASBA, there’s no need to worry—ASBA will develop and update model policies based on new laws, so you can rest assured your district will remain in compliance with Arizona Revised Statutes.
You're Invited to the Annual 2025 Legislative Wrap-Up Webinar!
As part of an annual tradition, the Arizona Association of School Business Officials (AASBO), Arizona School Administrators (ASA), and Arizona School Boards Association (ASBA) are teaming up once again to co-host the Legislative Wrap-Up Webinar!
Join us for a comprehensive overview of key K-12 legislation from the 2025 session, along with a summary of the newly adopted state budget.
Date: Tuesday, July 22, 2025
Time: 10:30 AM – 11:30 AM
Location: Online (Click here to register)
The webinar will be recorded, so be sure to register even if you can’t attend live, you’ll automatically receive a link to the recording.
