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Funding for K-12 Education

Description: 

The Arizona Joint Legislative Budget Committee produces two reports on K-12 funding. In addition to state government monies, funding from local governments and the federal government also are published. One report is limited to funding for maintenance and operation (M&O: the compensation of employees and the purchase of supplies, materials, and contractual services). The other report is for total funding, including capital outlays (for the construction of buildings and for the purchase of land and equipment). Most capital outlays, which are driven by a growing population, do not benefit current students, so M&O is the more meaningful measure of education funding.

The funding data are reported for fiscal years; for example, fiscal year 2013 runs from July 1, 2012 through June 30, 2013. Each annual report includes a ten-year time series.

The funding figures were divided first by a measure of enrollment called “average daily membership,” and then by per capita personal income in order to adjust for inflation and per capita economic growth. Per capita personal income was calculated using the fiscal year average for personal income and the average of the population at the beginning and end of the fiscal year.

Data Source: 

The K-12 Maintenance & Operation (M&O) Funding report is produced by the Arizona Joint Legislative Budget Committee in July http://www.azleg.state.az.us/jlbc.htm. The enrollment figures also are taken from this report.

Personal income is estimated quarterly by state by the U. S. Department of Commerce, Bureau of Economic Analysis http://www.bea.gov/regional/index.htm. It is released about three months after the end of the quarter; revisions to estimates for prior quarters are made every quarter.

The calculation of per capita personal income for the fiscal year uses annual population estimates as of July 1. Through 1999, the source is the U. S. Department of Commerce, Census Bureau. Their time series of population estimates is most easily accessed from the BEA: http://www.bea.gov/regional/index.htm. Since 2000, the source is the Arizona Department of Administration, Office of Employment and Population Statistics: http://www.workforce.az.gov/population-estimates.aspx. Both sets of estimates are released in December.

Data Quality Comments: 

Because of differences by state in accounting systems, the JLBC data are not comparable to those of any other state. Inconsistencies and inaccuracies exist within the time series of enrollment in elementary and secondary education.

Some of the inputs to the calculation of personal income by state are estimated. Personal income estimates are subject to revision. Personal income is a comprehensive measure of the economy but has conceptual limitations when employed to adjust public revenues and expenditures.

iconTotal Funding for Elementary and Secondary Education Per Student Per $1,000 of Per Capita Personal Income, Arizona State Government

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Visualization Notes:

Total maintenance and operations funding from all sources per student rose slightly for the second consecutive year in fiscal year (FY) 2014 relative to the ability of the state’s residents to pay, but the figure still was 6 percent less than in FY 2007, just prior to the start of the recession. Other spending, which largely consists of capital outlays used to repair and build schools, again was unusually low in FY 2014.

iconMaintenance and Operations Funding by Source of Funding for Elementary and Secondary Education Per Student Per $1,000 of Per Capita Personal Income, Arizona State Government

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Visualization Notes:

The general fund was the primary source of maintenance and operations funding for K-12 education, accounting for 54 percent of the total in fiscal year (FY) 2014. Local government property taxes also provided substantial revenues (36 percent of the total in FY 2014). The permanent fund, which consists of receipts from state land sales and leases, provided less than 1 percent of the funding. Proposition 301, which is funded by the 0.6 percentage point increase in the sales tax rate that was approved by voters in November 2000, contributed less than 8 percent. The federal government paid for 1 percent.

Measured per student relative to the ability of the state’s residents to pay, general fund appropriations for maintenance and operations in FY 2014 was 22 percent less than the FY 2007 peak. Proposition 301 monies are closely tied to the economic cycle and began to rebound in FY 2012 following three years of declines, but in FY 2014 still were 18 percent lower than in FY 2007. Federal support in the last three years was the lowest since records began in 2000. In contrast, local funding from the property tax was 17 percent higher than in FY 2007.

Data Source

The K-12 Maintenance & Operation (M&O) Funding report is produced by the Arizona Joint Legislative Budget Committee in July http://www.azleg.state.az.us/jlbc.htm. The enrollment figures also are taken from this report.

Personal income is estimated quarterly by state by the U. S. Department of Commerce, Bureau of Economic Analysis http://www.bea.gov/regional/index.htm. It is released about three months after the end of the quarter; revisions to estimates for prior quarters are made every quarter.

The calculation of per capita personal income for the fiscal year uses annual population estimates as of July 1. Through 1999, the source is the U. S. Department of Commerce, Census Bureau. Their time series of population estimates is most easily accessed from the BEA: http://www.bea.gov/regional/index.htm. Since 2000, the source is the Arizona Department of Administration, Office of Employment and Population Statistics: http://www.workforce.az.gov/population-estimates.aspx. Both sets of estimates are released in December.