Assigned to K-12 ED & APPROP                                                                                                          AS ENACTED

ARIZONA STATE SENATE

Forty-seventh Legislature, Second Regular Session

FINAL AMENDED

FACT SHEET FOR S.B. 1205

schools; transportation RCL; limited increases

Purpose

            Increases the number of days used by school districts to calculate their Transportation Support Level (TSL) from 175 to 180 days and appropriates $5,500,000 from the state General Fund in FY 2006-2007 to the Arizona Department of Education to fund the TSL based on a 180-day school year.  Prohibits school districts from increasing their Transportation Revenue Control Limit (TRCL) if it is greater than 120 percent of their TSL.

Background

            In 1981, the Legislature passed school finance legislation intended to give more budgetary control to local school districts and eliminate funding disparities throughout the state. School districts employ several formulas to determine their maintenance and operations budgets. The two formulas currently in use for transportation funding are: a) TSL and b) TRCL.

            School districts calculate the TSL by multiplying their average daily bus route miles by the number of school days and a statutorily set support level amount. In FY 2005-2006, the support level amount is $1.74 or $2.15, depending on the mileage traveled for an eligible pupil. The support level amount increases by two percent each year. Other transportation related expenses, such as bus passes and tokens, are added to the total. The state and the school districts share in the costs of this program through the school finance formula.

            School districts calculate TRCL for their next budget year by first calculating the difference between their current budget year TSL amount and their new budget year TSL amount. The difference is then applied to the current year TRCL to calculate the next budget year amount. TRCL is held harmless for any decline in the TSL amount that can occur from year to year. In FY 2004-2005, TRCL totaled approximately $54 million. The revenues for TRCL are generated through a primary tax levy and are subsidized by the state through the Additional State Aid program (A.R.S. § 15-972).

            Based on FY 2004-2005 Joint Legislative Budget Committee estimates, passage of S.B. 1205 as introduced would have resulted in state General Fund savings of approximately            $1 million due to decreased state cost in the Additional State Aid program. However, as enacted, S.B. 1205 increases the number of days used by school districts to calculate their TSL and appropriates $5,500,000 from the state General Fund, which will reduce the savings to the state General Fund as originally anticipated.

Provisions

1. Prohibits, retroactive to May 16, 2006, school districts from increasing their TRCL if it is greater than 120 percent of the district’s TSL.

2. Increases the number of days used by school districts to calculate their TSL from 175 to 180 days.

3. Appropriates $5,500,000 from the state General Fund in FY 2006-2007 to the ADE to fund the TSL based on a 180-day school year.

4. Becomes effective on the general effective date, with a retroactive provision as noted.

Amendments Adopted by House of Representatives

1. Increases the number of days used by school districts to calculate their TSL.

2. Adds an appropriation.

Senate Action House Action

APPROP         2/7/06       DP     6-4-1-0                     ED                   3/8/06     DP        6-4-0-0

K-12 ED         1/25/06     DP     6-2-0-0                     APPROP (B) 3/28/06   DPA     9-3-0-3

3^rd Read           3/1/06                 17-11-2-0                 3^rd                    6/20/06                36-15-9-0

Final Read       6/20/06               16-12-2-0

Signed by the Governor 6/21/06

Chapter 361

Prepared by Senate Research

July 10, 2006

DN/BB/ac