5 QUESTIONS WE SEEK TO ANSWER TODAY

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2 5 QUESTIONS WE SEEK TO ANSWER TODAY 1. WHERE DOES ARIZONA RANK IN THE VARIOUS SCHOOL FUNDING CATEGORIES? 2. HAS IT ALWAYS BEEN THIS WAY? 3. WHAT DO THOSE RANKINGS MEAN/DO THEY MATTER? 4. WHY DO WE HEAR DIFFERENT NUMBERS FROM OTHER GROUPS THAT GIVE A DIFFERENT PERSPECTIVE AND HOW DO THEY COME UP WITH THEM? 5. WHAT CAN WE DO ABOUT IT?

3 1. WHERE DOES ARIZONA RANK IN THE VARIOUS SCHOOL FUNDING CATEGORIES?

4 Per Pupil Amounts for M&O Purposes From All Sources (U.S. Census, FY2013) ARIZONA: $8,599 NATIONAL AVG: $12,380 ARIZONA STATE RANK: 49

5 Arizona State K-12 Funding By Resource (% of money from a Particular Source Federal, Local and State (U.S. Census, FY2013) FEDERAL FUNDING: 14.6% (5 TH ) LOCAL FUNDING: 49.2% (18 TH ) STATE FUNDING: 36.2% (48 TH ) GROWTH IN RESOURCES FROM FEDERAL, LOCAL AND STATE SOURCES (ACTUAL NOT CONSTANT - DOLLARS) FEDERAL FUNDING SOURCES: UP % LOCAL FUNDING SOURCES: UP 76.99% STATE FUNDING SOURCES: UP 49.3%

6 Ranked by State Sources Alone, Arizona has fallen to 50 th in per pupil funding $3,018 PER PUPIL 53.8% OF NATIONAL AVG.

7 Education Week Quality Counts 2015: Spending

8 Adjusted Per-Pupil Expenditures (PPE) ANALYSIS COUNTS FOR REGIONAL COST DIFFERENCES INCLUDES ALL REVENUE SOURCES ARIZONA STATE AVERAGE: $8,101 NATIONAL AVERAGE: $11,735 ARIZONA RANK: 50 (OF 51)

9 Students Funded at or Above the National Average PERCENT OF STUDENTS IN DISTRICTS WITH PPE AT OR ABOVE U.S. AVERAGE ARIZONA STATE AVERAGE: 0.7% NATIONAL AVERAGE: 43.4% ARIZONA RANK: 51 (OF 51)

10 State Expenditures on K-12 Schooling as a Percent of State Taxable Resources ARIZONA STATE AVERAGE: 2.5% NATIONAL AVERAGE: 3.4% ARIZONA RANK: 47 (OF 51)

11 Funding Equity The Good News! (Or, The Good News?) EDUCATION WEEK, QUALITY COUNTS 2015

12 Wealth-Neutrality Score RELATIONSHIP BETWEEN DISTRICT FUNDING AND LOCAL PROPERTY WEALTH THE DEGREE TO WHICH STATE AND LOCAL REVENUE ARE RELATED TO PROPERTY WEALTH OF DISTRICTS STATE AVG: NATIONAL AVG.: ARIZONA STATE RANKING: 19

13 McLoone Index ACTUAL SPENDING AS PERCENT OF AMOUNT NEEDED TO BRING ALL STUDENTS TO MEDIAN LEVEL OF STATE STATE AVG.: 94.8% NATIONAL AVG.: 90.8% ARIZONA STATE RANKING: 4

14 Coefficient of Variation AMOUNT OF DISPARITY IN SPENDING ACROSS A STATE AMONG DISTRICTS STATE AVG.: NATIONAL AVG.: ARIZONA STATE RANKING: 15

15 Restricting Range DIFFERENCE IN PER-PUPIL SPENDING LEVELS AT THE 95 TH AND 5 TH PERCENTILES STATE AVG.: $2,614 NATIONAL AVG.: $4,559 ARIZONA STATE RANKING: 7

16 THE GOOD NEWS? EVIDENCE THAT IN A LOW TAX STATE SUCH AS ARIZONA - EQUITY COMES AT THE EXPENSE OF LOCAL CONTROL AND DEPRESSES OVERALL FUNDING

17 What About Capital Funding? MOST CAPITAL FUNDING NOW AT LOCAL LEVEL BUILDING RENEWAL FORMULA REPEALED IN 2014 FULL FUNDING OF FORMULA IN FY2014 WAS $260 MILLION; ACTUAL FUNDING WAS $14 MILLION FOR GRANT-BASED PROGRAM NO NEW SCHOOL CONSTRUCTION FUNDING PROVIDED BY STATE LAWSUIT BEING PREPARED

18 SO WHERE DOES ARIZONA RANK IN THE VARIOUS SCHOOL FUNDING CATEGORIES?

19 IN 2015, ARIZONA RANKS AT OR NEAR THE BOTTOM ON STATE FUNDING OF M&O K-12 EDUCATION IN 2015, ARIZONA HAS A FUNDING SYSTEM THAT IS AMONG THE TOP STATES IN EQUITY OF RESOURCES BUT THIS IS BASED ON ALL DISTRICTS HAVING LOW OVERALL FUNDING LACK OF STATE FUNDING OF CAPITAL IS RESULTING IN BOTH LOW FUNDING AND INEQUITY SINCE MOST CAPITAL FUNDING IS PAID FROM VOTER APPROVED BONDS WHICH ARE BASED ON LOCAL PROPERTY WEALTH AND LOCAL VOTER SUPPORT

20 2. HAS IT ALWAYS BEEN THIS WAY?

21 CHANGE IN RANKING AZ RANKED 34TH ABOVE 16 OTHER STATES (87.7% OF U.S. AVERAGE) AZ RANKED 48 TH ABOVE 2 OTHER STATES (69.5% OF U.S. AVERAGE) TO MOVE BACK TO 87.7% OF U.S. AVERAGE INCREASE EXPENDITURES TO $10,857 INCREASE OF $2,258 PER PUPIL

22 IN AZ ABOVE THESE STATES Alabama Arkansas Georgia Idaho# Kentucky Louisiana Mississippi Missouri New Mexico North Carolina North Dakota Oklahoma South Carolina South Dakota Tennessee Utah# #State AZ above in

23 Change In Per Pupil Public School Revenue K-12 Education FY FY 2013 FY 1992 Federal Sources State Sources Local Sources Total US $361 $2,661 $2,598 $5,621 Arizona $453 $2,086 $2,391 $4,931 AZ Rank AZ % of US Average 125.5% 78.4% 92.0% 87.7% FY 2013 Federal Sources State Sources Local Sources Total US $1,126 $5,650 $5,603 $12,380 Arizona $1,251 $3,116 $4,232 $8,599 AZ Rank AZ % of US Average 111.1% 55.1% 75.5% 69.5%

24 AZ K12 State Funding Rank Per Pupil vs. U.S. Average FY 1993 FY 2013 YEAR RANK $ AZ $ U.S. Average % AZ/U.S % % % % % % % % % %

25 AZ K12 State Funding Rank Per Pupil vs. U.S. Average continued FY 1993 FY 2013 YEAR RANK $ AZ $ U.S. Average % AZ/U.S % % % % % % % % % % %

26 Providing for Inflation Funding INFLATION PROVIDED INFLATION FUNDING LESS THAN A THIRD OF WHAT INFLATION WAS GREAT GROWTH IN STATE REVENUES DURING THIS TIME OTHER STATES INVESTED THOSE REVENUES IN EDUCATION WHILE ARIZONA DID NOT

27 School Reform Relationship to School Funding Decline

28 1995: ARIZONA PASSES MOST EXPANSIVE CHARTER SCHOOL LAW IN COUNTRY AS WELL AS OPEN ENROLLMENT AND SITE-BASED DECISION MAKING 1997: STUDENT TUITION TAX CREDIT FOR PRIVATE SCHOOLS 2006: SCHOOL VOUCHERS (RULED UNCONSTITUTIONAL IN 2009) 2011: EMPOWERMENT SCHOLARSHIP ACCOUNTS

29 THE PHILOSOPHY OF THE REFORMERS WITH ADDITIONAL SCHOOL CHOICE, THERE IS SCHOOL COMPETITION COMPETITION WILL DRIVE GREATER STUDENT ACHIEVEMENT WITHOUT MORE MONEY DON T PUT MONEY INTO A BROKEN SYSTEM PRIVATE ENTERPRISE IS MORE EFFICIENT THAN GOVERNMENT AND CAN DO MORE WITH LESS

30 Effect of Great Recession on Arizona s K-12 Funding (Since FY2009) CAPITAL OUTLAY REVENUE LIMIT (CORL, REPEALED STARTING FY2014): -$144M SOFT CAPITAL (REPEALED STARTING FY2014): -$676.4M DISTRICT ADDITIONAL ASSISTANCE (STARTED IN FY2014): -$239M ELIMINATION OF FULL DAY KINDERGARTEN: - $218.3M CAREER LADDER PHASE-OUT (NOT ALL DISTRICTS RECEIVED): -$70M (ONLY -$29M TO STATE) EXCESS UTILITIES: -$183M BUILDING RENEWAL: -$1.6B

31 OVERALL CUTS DURING GREAT RECESSION: $3.4B ACCORDING TO U.S. CENSUS, ARIZONA CUT K-12 EDUCATION MORE THAN ANY OTHER STATE IN THE COUNTRY AND ARIZONA WAS RANKED 47 TH IN FUNDING BEFORE THE GREAT RECESSION

32 Has It Always Been This Way? NO, IT HASN T ALWAYS BEEN THIS WAY. ARIZONA USED TO BE IN THE MIDDLE OF THE PACK AS FAR AS EDUCATION FUNDING BUT HAS FALLEN TO THE BOTTOM BECAUSE OF A DIMINISHING AMOUNT OF STATE SUPPORT SINCE THE EARLY- TO MID- 90 S AND CUTS DURING THE GREAT RECESSION

33 3. WHAT DO THOSE RANKINGS MEAN/DO THEY MATTER? SURVEY AFTER SURVEY SHOWS THAT PEOPLE CARE ABOUT EDUCATIONAL QUALITY AND PUBLIC ACCOUNTABILITY AND SEE FUNDING IN THAT CONTEXT. THEY WILL NOT SUPPORT MORE FUNDING FOR THE SAKE OF MORE FUNDING THEY WANT BANG FOR THE BUCK

34 Does more funding equal better student achievement? NEVER GOING TO BE A ONE-TO-ONE RATIO AND THERE WILL BE OUTLIERS (DC) BUT..MORE EVIDENCE THAN NOT, SHOWS YES THERE IS A CORRELATION OF TOP 10 STATES STUDENT ACHIEVEMENT AS MEASURED IN LATEST EDUCATION WEEK QUALITY COUNTS REPORT, ONLY THREE WERE IN BOTTOM HALF OF STATES IN FUNDING AVG. FUNDING RANKING OF TOP 10 ACHIEVING STATES WAS 18

35 EDUCATION WEEK QUALITY COUNTS TOP 10 STATES IN STUDENT ACHIEVEMENT (WITH FUNDING RANKING) 1. MA 83.7 (10) 2. MD 83.1 (6) 3. NJ 82.1 (5) 4. NH 78.8 (16) 5. VT 77.3 (8) 6. MN 76.7 (20) 7. FL 75.8 (37) 8. PA 75.6 (11) 9. WA 74.9 (29) 10. CO 74.2 (40) 38. AZ 66.6 (48)

36 Strong evidence that highly qualified teachers result in higher student achievement Strong evidence that salaries drive availability and quality of personnel 85-90% OF SCHOOL DISTRICT BUDGETS ARE IN EMPLOYEE SALARIES AND BENEFITS ARIZONA TEACHER SHORTAGE: RECORD NUMBER OF VACANCIES FOR SCHOOL YEAR AZ AVG. SALARY: $47,000 (U.S. $54,000; AZ RANKS 40); GAP IS WIDENING AZ AVG. STARTING SALARY: $32,000 SHORTAGE OF SCHOOL SUPERINTENDENTS, PRINCIPALS AND ASSISTANT PRINCIPALS AS WELL

37 Low funding means higher class sizes AZ CURRENTLY HAS 10 TH HIGHEST CLASS SIZES IN U.S. (NEA)

38 3. What do those rankings mean/do they matter? THEY MEAN THAT STUDENT ACHIEVEMENT IS NEGATIVELY AFFECTED BY LOW LEVELS OF FUNDING, RESULTING IN REDUCTION OF PROGRAMS AND QUALIFIED TEACHERS AND OTHER SCHOOL PERSONNEL TO EDUCATE THEM.

39 4. WHY DO WE HEAR DIFFERENT NUMBERS FROM OTHER GROUPS THAT GIVE A DIFFERENT PERSPECTIVE AND HOW DO THEY COME UP WITH THEM? OFTEN IT S A COMPARING-APPLES-TO-ORANGES PROBLEM OR DIFFERENT PERSPECTIVE

40 OFTEN PROPORTIONAL CAPITAL OR LOCAL FUNDING IS ADDED TO STATE PER PUPIL FUNDING AND THEN THAT NUMBER IS COMPARED TO NATIONAL FIGURES DON T INCLUDE THIS SAME ADDED FUNDING

41 Overall funding for K-12 is considered without breaking it out on a per pupil basis BECAUSE ARIZONA IS A GROWING STATE, THE AMOUNT OF MONEY GOING INTO THE SYSTEM IS INCREASING BUT NOT IN PROPORTION TO PER PUPIL SPENDING LEGISLATORS OFTEN SEE K-12 SPENDING AS A SINGLE LINE-ITEM IN THE BUDGET AND SEE IT GOING UP WHEN ON A PER PUPIL BASIS IT MAY BE GOING DOWN OR RELATIVELY FLAT

42 Example: Arizona Tax Research Association (ATRA) Report On K-12 General Fund Spending Increases Since 1992 Show Arizona Has Grown K-12 Spending the 9 th Most in the U.S. WHY? STUDENT GROWTH AZ #2 IN STUDENT GROWTH SINCE 1992 ARIZONA IN TOP 10 STATES IN PERCENTAGE OF POPULATION UNDER THE AGE OF 18 #13 IN PERCENTAGE OF POPULATION OVER 64 #49 IN PERCENTAGE OF POPULATION 18-64

43 OTHER COMMON APPROACHES SOMETIMES PER CAPITA FUNDING IS USED TO PRESENT A DIFFERENT PERSPECTIVE COST OF LIVING IS SOMETIMES CONSIDERED

44 4. Why do we hear different numbers from other groups that give a different perspective and how do they come up with them? STUDENT GROWTH, INCLUSION OF CAPITAL AND PER CAPITA METHODOLOGIES WHILE NOT ALWAYS DOING THE SAME THING FOR OTHER STATES PRESENTS POLICYMAKERS A SKEWED PERSPECTIVE ON ARIZONA SCHOOL FUNDING AND COMPLICATES GETTING OUT A CLEAR FACTUAL MESSAGE ABOUT THE RANKINGS AND WHAT THEY MEAN.

45 5. WHAT DO WE DO ABOUT IT? ADVOCATE, LITIGATE AND LEGISLATE!

46 ADVOCATE! DO IT SMART DANGER OF USING RANKINGS: $4 BILLION TO MOVE AZ TO NATIONAL AVERAGE DON T WANT POLICYMAKERS TO SAY WHY BOTHER?

47 ADVOCATE! KNOW HISTORY BEWARE OF POLLS PROP. 301 (2000), PROP. 100 (2010): SIMPLE PLAN + STRONG PUBLIC SUPPORT + BUSINESS COMMUNITY SUPPORT/NEUTRAL + GOVERNOR SUPPORT = BALLOT WIN ANY OF THE ABOVE AREN T THERE, THE OUTCOME HAS NOT BEEN GOOD (ACE INITIATIVE IN 1990, PROP. 204 IN 2012)

48 ADVOCATE! CREATE RELATIONSHIPS WITH THE PLAYERS ON THE FIELD NOW ADVOCATE WORK TO GET THE PLAYERS YOU WANT

49 LITIGATE! INFLATION CAPITAL LIMITS ON LITIGATION AS EFFECTIVE STRATEGY

50 LEGISLATE! KEEP IN MIND PROP. 108 STAY IN CONVERSATIONS ABOUT MORE FUNDING HAVE TO PLAY WITH THE PLAYERS YOU HAVE

51 TIME S UP! CTHOMAS@AZSBA.ORG JPALMER@AZSBA.ORG