SCR1032 - 572R - Senate Fact Sheet

Purpose

Subject to voter approval, statutorily requires each school district to dedicate at least 60 percent of the school district's operational spending to teacher pay. Outlines penalties for school districts that do not comply with the requirements relating to dedicating 60 percent of operational spending to teacher pay, including forfeiture of a school district's Classroom Site Fund (CSF) distributions.

Background

The CSF provides funding to public schools from the Permanent State School Fund and the additional 0.6 percent transaction privilege tax and excise tax for education. A public school may spend CSF monies on: 1) class size reduction; 2) teacher compensation, including a base pay and performance pay component; 3) teacher development and liability insurance premiums;
4) assessment intervention programs; 5) dropout prevention programs; and 6) student support services. Each public school must establish a local-level CSF to receive allocations from the
state-level CSF and receives CSF monies monthly in an amount not to exceed one-twelfth of the school's annual CSF appropriation (A.R.S. § 15-977).

The Office of the Auditor General (OAG) monitors school districts to determine the percentage of every dollar spent in the classroom by a school district. For the purposes of the OAG's School District Spending Analysis, operational spending includes instructional spending as well as spending for student support, instruction support, administration, plant operations, food service and transportation (A.R.S. § 41-1279.03; OAG).

There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1. Requires each school district to dedicate at least 60 percent of the school district's operational spending, as defined by the OAG, to teacher pay.

2. Requires a school district, beginning in FY 2028, that spends less than 60 percent of the school district's operational spending on teacher pay to increase the school district's portion of operational spending that is spent on teacher pay by at least 0.5 percent each year until the school district is in compliance.

3. Allows, if a school district increases the portion of the school district's operational spending on teacher pay by more than 0.5 percent per year, the school district to count the portion of the increase that exceeds 0.5 percent toward any increase that is required in a subsequent year.

4. Determines that, if a school district reduces the portion of the school district's operational spending on teacher pay:

a) the OAG may not consider the reduction when calculating the amount of the annual increase required for the school district; and

b) the school district may count only the portion of an increase in operational spending on teacher pay for a subsequent year that results in an increase above the portion of operational spending before the reduction.

5. Stipulates that, if the OAG determines that a school district is not complying with the requirements to dedicate 60 percent of operational spending to teacher pay or to increase operational spending on teacher pay by 0.5 percent each year and the school district receives monies from the CSF:

a) any unexpended and unencumbered monies distributed to the school district from the CSF revert back to the CSF;

b) the school district is ineligible to receive CSF monies until the OAG determines that the school district is in compliance; and

c) the staff of the Joint Legislative Budget Committee must include monies that revert to the CSF in the CSF carryforward and adjust the CSF per-pupil calculations to exclude the weighted student count for any school district that is ineligible due to noncompliance.

6. Allows the Superintendent of Public Instruction (SPI) to waive the requirements relating to the forfeiture of CSF monies for noncompliance if the duration of the waiver does not exceed one year.

7. Specifies that the SPI may not issue a waiver for a school district for more than two consecutive years.

8. States that the outlined requirements relating to dedicating 60 percent of operational spending on teacher pay and penalties for noncompliance with the requirements does not require this state or an agency or officer of the state to maintain the CSF or allocate monies for a CSF except as otherwise provided by the laws of Arizona.

9. Defines teacher as any individual who is classified as a teacher in the Uniform System of Financial Records.

10. Specifies that the definition of teacher pay includes the base salary, performance pay, other compensation and all employee benefits that a teacher receives and that are paid for by the school district.

11. Requires the Secretary of State to submit the proposition to the voters at the next general election.

12. Becomes effective if approved by the voters and on proclamation of the Governor.