Public school and community college finance in Arizona: a report to the Joint Select Committee on Tax Reform and School Finance of the Arizona Legislature

              PUBLIC SCHOOL AND COMMUNITY COLLEGE FINANCE I N ARIZONA

A Report to the

Joint Select Committee on Tax Reform and School Finance

of the Arizona Legislature

June 1979

Prepared by the

Research Staff of the Joint Select Committee

INTRODUCTION

This report presents overviews of public school finance and community college

finance i n Arizona. The report i t s e l f is divided i n t o three d i s t i n c t sections:

I. Overview of Public School Finance i n Arizona

11. Financing Capital Outlay

111. Overview of Community College Finance i n Arizona

The separate Financing Capital Outlay s e c t i o n is included i n the r e p o r t because

the s t a t e presently provides no support f o r c a p i t a l outlay. C a p i t a l o u t l a y f o r

school buildings is almost completely supported by l o c a l tax d o l l a r s and t h e r e f o r e ,

has a s i g n i f i c a n t impact on school d i s t r i c t tax r a t e s .

In order to present an o v e r a l l perspective of the magnitude of s t a t e involvement

i n the support of education the following t a b l e is presented.

S t a t e of Arizona Summary Chart of General Fund Appropriations For

Educational Purposes: F i s c a l Year 1979- 80 Operating Budget ($ 720,264,400)

eaf and Blind School

ornmunity College Board

Board of Regents

Arizona S t a t e University

University of Arizona

oard of Medical Student

* Total Appropriation from General Fund = $ 1,193,350,883

** Western I n t e r s t a t e Commission f o r Higher Education

As the chart above i n d i c a t e s , 60.4% of the General Fund Appropriations f o r

FY 1979- 80 were f o r educational purposes. Of t h i s 60.4%, 65.4% was f o r s t a t e aid

t o public schools and 5.3% f o r s t a t e aid t o community colleges. In addition t o

these general fund appropriations, $ 67,000,000 i n general fund monies was appropri-ated

f o r the homeowners property tax reduction program which is designed t o reduce

school d i s t r i c t taxes f o r homeowners.

The following table shows the extent of s t a t e involvement in education at the

public school level in FY 1977- 78. The s t a t e provided 41.92% of t o t a l revenue and

the local d i s t r i c t s provided 44.39% of t o t a l revenue. However, the s t a t e also

provided $ 40 million through the homeowner property tax reduction program. When

these funds are removed as revenue from t h e l o c a l l e v e l and placed as revenues

coming from the s t a t e , the s t a t e ' s contribution increases to 45.96% of t o t a l

revenue and the local l e v e l ' s share decreases to 40.35% of t o t a l revenue.

Sources of Revenue for Arizona Public Schools

in FY 1977- 78

* Includes $ 52,276,191 county levy amount for Teachers Retirement and OASI

** Total does not include cash balances

The following table indicates the state" iinvolvement with community college

financing. In FY 1977- 78 the s t a t e ' s portion of revenue was 32.76% and the local

d i s t r i c t was 44.00%.

Sources of Revenue for Arizona Community Colleges

in FY 1977- 78

Cash

State Local Federal* Tuition Other Balance Total

Revenue $ 35,993,897 $ 48,344,218 $ 704,704 $ 4,107,553 $ 4,723,833 $ 16,000,742 $ 1 09,874,947

Percent of

Total Revenue 32.76% 44.00% 0.64% 3.74% 4.30% 14.56% 100%

* These federal funds are expended through the current operating budget and in most cases they generate

FTSE; however, they do not include all of the federal funds received and expended.

OVERVIEW OF PUBLIC SCHOOL FINANCE I N ARIZONA

A Report t o the

J o i n t Select Committee on Tax Reform and School Finance

of the Arizona L e g i s l a t u r e

June 1979

OVERVIEW OF PUBLIC SCHOOL FINANCE I N ARIZONA

Table of Contents

Page

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

I . SCHOOLFINANCE- PRESENTSYSTEM . . . . . . . . . . . . . . . . . . .

A . Description of School Budget Areas . . . . . . . . . . . . . . . .

1 . General Maintenance and Operation . . . . . . . . . . . . a .

a . Description . . . . . . . . . . . . . . . . . . . . . . .

bc .. PHriesstoernyt: ScBhoaosli cFEindaunccaet iSoynsAteimd: . D. e f. i n. i t i. o n. s . .. .. .. .. .. .. ..

d . C a l c u l a t i o n o f S t a t e B a s i c A i d . . . . . . . . . . . . . .

e . BudgetLimit . . . . . . . . . . . . . . . . . . . . . . .

fg .. HBoumdgeeotw nOevrse' rrPidroe pEerletyc tTioaxn R. ed. u. cti. on. P. ro. gr. am. .. .. .. .. .. .. .. ..

2 . Special Education: Handicapped . . . . . . . . . . . . . . .

a . Description . . . . . . . . . . . . . . . . . . . . . . .

bc .. LHeangdiisclaaptpi vede MSitsutdoernyt s E. l i. g i. b l. e . f o. r . Se. rv. ic. es. .. .. .. .. .. .. .. .. d . D i s t r i b u t i o n of Handicapped Students . . . . . . . . . . .

e . Types of Special Education Serv. i. ces . . . . . . . . . . .

f . Funding of Special Ed~ acation . . . . . . . . . . . . . . .

g . Budget Limit . . . . . . . . . . . . . . . . . . . . . . .

3 . Other S t a t e Education Programs . . . . . . . . . . . . . . . .

a . Special English Training . . . . . . . . . . . . . . . . .

b . Gifted . . . . . . . . . . . . . . . . . . . . . . . . . .

4 . aS . pe cFieadl ePrraol jIemcpt sa c. t A. id.: . P.. L.. .81.- 8.74. .. .. .. .. .. .. .. .. .. .. .. .. ..

b . School Construction Assistance i n Federally Impacted

c Areas: P. L. 81- 815 . . . . . . . . . . . . . . .. .. .. .. .. . ( 1) T i t l e I -. Educationally Deprived: P. L. 89- 10

( 2) T i t l e I - Migrant . . . . . . . . . . . . . . . . . . .

d . ( 1) Vocational Education: P. L. 94- 482 . . . . . . . . . .

( 2) Vocational Education: S t a t e . . . . . . . . . . . . .

e . Comprehensive Employment and Training Act ( CETA):

P. L. 93- 203 . . . . . . . . . . . . . . . . . . . . . . .

f . Career Education: S t a t e . . . . . . . . . . . . . . . . .

g . ( 1) Bilingual Education: T i t l e V I I of the Elementary

and Secondary Education Act . . . . . . . . . . . . . .

( 2) Bilingual Education: S t a t e ( Special English

Training) . . . . . . . . . . . . . . . . . . . . . . .

h . Special Education - Handicapped: Education of a l l

Handicapped Children Act. P. L. 94- 142 . . . . . . . . . .

i . Indian Education: T i t l e IV. P. L. 92- 318 . . . . . . . . .

j . Johnson- O'Malley Educational Assistance: P. L. 93- 638 . .

5 . Transportation . . . . . . . . . . . . . . . . . . . . . . . .

a . Description . . . . . . . . . . . . . . . . . . . . . . .

b . History of S t a t e Transportation Aid . . . . . . . . . . .

c • Calculation of S t a t e Transportation Aid . . . . . . . . .

Table of Contents ( cont.)

Page

6 . C a p i t a l OutlayIDebt Service . . . . . . . . . . . . . . . . . 1- 55

a . Budgeted Capital Outlay . . . . . . . . . . . . . . . . . 1- 56

b . Capital Levy . . . . . . . . . . . . . . . . . . . . . . . 1- 57

c . Adjacent Ways . . . . . . . . . . . . . . . . . . . . . . 1- 58

d . Debt Service . . . . . . . . . . . . . . . . . . . . . . . 1- 58

7 . TeacherRetirement . . . . . . . . . . . . . . . . . . . . . . 1- 58

I1 CURRENT EXPENDITURE AND REVENUE LIMITATIONS PLACED UPON ARIZONA

SCHOOLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 61

A . Expenditure Limitation . . . . . . . . . . . . . . . . . . . . . . 1- 61

B . T a x R a t e L i m i t a t i o n . . . . . . . . . . . . . . . . . . . . . . . 1- 61

C . D e b t L i m i t a t i o n . . . . . . . . . . . . . . . . . . . . . . . . . 1- 61

D . Other Limitations . . . . . . . . . . . . . . . . . . . . . . . . 1- 68

111 . ANALYSIS OF CURRENT SCHOOL FINANCE SYSTEM: FY 1977- 78 . . . . . . . . 1- 61

A . Analysis of FY 1977- 78 Total Tax Rates . . . . . . . . . . . . . . 1- 66

B . Analysis of FY 1977- 78 General Maintenance and Operation

C . TAanxa lRyastiess oaf nFdY E1x9p7e7n- d78it uSrep eLceivael lEs d. uc. ati. on. T. ax. R. a. tes. .. .. .. .. .. .. .. .. 11-- 6698

D . Analysis of FY 1977- 78 Transportation Fund Tax Rates

and Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . 1- 71 E . . . . . . Analysis of FY 1977- 78 Budgeted Capital Outlay Tax Rates 1- 72 F . Analysis of FY 1977- 78 Capital Levy Tax Rates and Capacities . . . 1- 74

G . Analysis of FY 1977- 78 Debt Service Tax Rates . . . . . . . . . . 1- 75

I BASIC SCHOOL FINANCE ALTERNATIVES . . . . . . . . . . . . . . . . . . 1- 78

A . ProgramArea . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 . Minimum Foundation Program . . . . . . . . . . . . . . . . . .

2 . GuaranteedTaxBase . . . . . . . . . . . . . . . . . . . . .

3 . Percentage Equalizing . . . . . . . . . . . . . . . . . . . .

4 . D i s t r i c t Power Equalizing . . . . . . . . . . . . . . . . . .

5 . F u l l S t a t e A s s u m p t i o n . . . . . . . . . . . . . . . . . . . .

6 . Equivalance of the Shared Cost Formulas . . . . . . . . . . .

7 . Non- Equalizing General Aid Formulas: Minimum Aid or

F l a t Grant . . . . . . . . . . . . . . . . . . . . . . . . . .

B . TransportationArea . . . . . . . . . . . . . . . . . . . . . . .

C . F a c i l i t i e s A r e a . . . . . . . . . . . . . . . . . . . . . . . . .

1 . F u l l s t a t e Assumption . . . . . . . . . . . . . . . . . . . .

2 . S t a t e / L o c a l S h a r i n g . . . . . . . . . . . . . . . . . . . . .

3 . S t a t e F l a t Grant . . . . . . . . . . . . . . . . . . . . . . .

4 . S t a t e Equalizing Grant . . . . . . . . . . . . . . . . . . . .

5 . S t a t e Loans . . . . . . . . . . . . . . . . . . . . . . . . .

L i s t of Tables

Page

1. Actual School D i s t r i c t Expenditures f o r FY 1977- 78 by Budget Area . . . 1- 1

2. S t a t e Basic Support Level per AP) M f o r Elementary and High Schools . . 1- 4

3. Total Override Amounts from FY 1975- 76 through FY 1978- 79 by D i s t r i c t ;

Tax Rate Equivalent o f Override Amounts i n FY 1978- 79; N 1979- 80

Override Amounts by C i s t r i c t ; Total Override Amounts from FY 1975- 76

through FY 1979- 80 by D i s t r i c t . . . . . . . . . . . . . . . . . . . . 1- 14

4. D i s t r i c t s Which Had Override Elections Which Fai1e. d . . . . . . . . . . 1- 17

5. Appropriations f o r the Property Tax Reduction Program . . . . . . . . . 1- 18

6. D i s t r i b u t i o n of Students by Handicapping Condition, FY 1978- 79 ADM . . 1- 25

7. Type of Program I n which Handicapped Students were Served i n the

1 9 7 7 - 7 8 S c h o o l Y e a r . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 26

8. Percentage of School Age Children Served i n Special Education f o r

FY 1977- 78: Arizona vs. National Average . . . . . . . . . . . . . . . 1- 27

9. Arizona School D i s t r i c t s which Exc- ecded the 11% Special Education

Funding Limit f o r the 1977- 78 School Year . . . . . . . . . . . . . . . 1- 28

10. Weighted Excess Cost Level and Total Support. Level f o r Ba. ndicapped

S t u d e n t s f o r t h e 1 9 7 8 - 7 9 S c h o o l Y e a r . . . . . . . . . . . . . . . . . 1- 29

11. Comparison of ExpermrE- Lt~ tres f o r Special Education and Special Education

S t a t e Aid f o r FY 1974- 75 through FY 1978- 79 . . . . . . . . . . . . . . 1- 30

12. Changes i n the Special Education Budget Limit f o r Three Selected

School D i s t r i c t s Based Upon the Existlng Budget Limit Procedure f o r

Special Education . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 31

13. S t a t e Funds Expended f o r Special English Training Programs from

FY 1969- 70 through FY 1977- 78 . . . . . ., . . . . . . . . . . . . . . . 1- 33

14. S t a t e Funds Expended f o r Gifted Programs from FY 1972- 73 through

FY1977- 78 . a . . . . . e . e . . . . . . . * . * e . e . . . . . e . 1- 34

15. Federal Mandates t h a t Alfect a11 Students and Provide No Federal

Funding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 35

16. Federal Non- Educational Mandates t h a t Affect School D i s t r i c t s . . . . . 1- 36

17. Federal Expenditures and Number of Students Served i n Federal

Programs: FY 1977- 78 . . . . . . . . . . . . . . . . . . . . . . . . . 1- 49

18. Expenditures and S t a t e Aid f o r Transportation, FY 1974- 75 through

FY1977- 78 . . . . . . . m . . * . . . . . . . . . . . . . . . . . . . 1- 55

L i s t of Tables ( cont.)

Page

19- Total Expenditures f o r Budgeted Capital Outlay and Expenditures per

ADM, FY 1973- 74 through FY 1977- 78 . . . . . . . . . . . . . . . . . . 1- 56

20. Total Expenditures from Capital Levy Fund and Expenditures per ADM,

FY 1973- 74 through FY 1977- 78 . . . . . . . . . . . . . . . . . . . . . 1- 57

21. County School Costs f o r Teacher Retirement and OASI, FY 1970- 71

throughFY1977- 78 . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 60

22. County Tax Rates Needed t o Fund Teacher Retirement and OASI:

FY1977- 78 e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 60

23. L i m i t a t i o n s C u r r e n t l y Imposed Upon Arizona School D i s t r i c t s . . . . . . 1- 62

24. Range of Total Tax Rates by D i s t r i c t Type f o r T? Y 1977- 78 . . . . . . 1- 67

25. Relationship of P. L. 874 Monies and Tax Rates by Fund f o r Two

Selected D i s t r i c t s . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 67

26. Range of General Maintenance and Operation Tax Rates by D i s t r i c t

Type f o r FY 1977- 78 . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 68

27. Median Tax Rate and Range f o r Special Education by D i s t r i c t Type f o r

1 9 7 7 - 7 8 . . . . . . . * . . . . . . . . . . . * . . . . . . . * . . . . 1- 70

28. School D i s t r i c t s with Special Education Tax Rates i n Excess of $ 1.00

forFY1977- 78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 70

29. Average Cost per Bus M i l e and Average Cost per Student Transported by

D i s t r i c t T y p e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 71

30. School D i s t r i c t Tax Rates f o r Budgeted Capital Outlay by D i s t r i c t

Type f o r FY 1977- 78 . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 72

31. Tax Rates f o r Elementary ( Type 04) and High School ( Type 05) D i s t r i c t s

with Expenditures i n Excess of $ 175 per Pupil f o r Budgeted Capital

Outlay f o r FY 1977- 78 . . . . . . . . . . . . . . . . . . . . . . . . . 1- 73

32. Tax Rate Required t o Expend $ 100 i n Budgeted C a p i t a l Outlay p e r P u p i l

i n Selected Unified School D i s t r i c t s i n FY 1977- 78 . . . . . . . . . 1- 74

33. Capital Levy Tax Rates by D i s t r i c t Type f o r FY 1977- 78 . . . . . . . . 1- 75

34. Range of C a p i t a l Levy Capacity per ADM by D i s t r i c t Type . . . . . . . . 1- 75

35. Examples of High Tax Rates f o r Debt Service f o r FY 1977- 78 . . . . . . 1- 76

List of Tables ( cont.)

Page

36. Expenditures and Tax Rates for Debt Service i n Selected Unified

S c h o o l D i s t r i c t s for FY 1977- 78 . . . . . . . . . . . . . . . . . . . . 1- 77

37. Basic Equalization Formulas Used by States . . . . . . . . . . . . . . 1- 79

38. State Support for Capital Outlay and Debt Service . . . . . . . . . . . 1- 88

L i s t of Charts

Page

1. Impact of the Equalization Effect of the Current S t a t e Aid Formula 1- 7

2. Growth i n the Basic Support Level f o r an Elementary Classroom . . . a . 1- 10

3. Growth i n the Budget Cost Level ( Budget Limit) f o r an Elementary

Classroom whose BCL was i n Excess of the Basic Support Level . . . . . 1- 11

4. Growth i n the Budget Cost Level ( Budget Limit) f o r an Elementary

Classroom whose BCL was Less than t h e Basic Support Level . . . . . . . 1- 12

5. Seven Percent Budget Limit and the Effect of Overrides . . . . . . . . 1- 13

6 . Operation of Minimum Foundation Program . . . . . . . . . . . . . . . . 1- 80

7. Local Leeway Minimum Foundation Program . . . . . . . . . . . . . . . . 1- 81

8. Minimum Program Plus Local Leeway . . . . . . . . . . . . . . . . . . . 1- 81

9. Guaranteed Tax Base . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 82

10. D i s t r i c t Power Equalizing . . . . . . . . . . . . . . . . . . . . . . . 1- 86

L i s t of Appendices

Page

1. School D i s t r i c t Entitlements to Special Project Funds . . . . . . . . . 1- 92

2 . School D i s t r i c t Tax Rates: FY 1977- 78 . . . . . . . . . . . . . . . . . 1- 114

( a) Unified D i s t r i c t s ( Type 02) . . . . . . . . . . . . . . . . . . . . 1- 114

( b) Elementary D i s t r i c t s ( Type 03) . . . . . . . . . . . . . . . . . . . 1- 116

( c) Elementary Districts ( Type 04) . . . . . . . . . . . . . . . . . . . 1- 118

( dl High School D i s t r i c t s ( Type 05) . . . . . . . . . . . . . . . . . . 1- 121

3 . General Maintenance and Operation ( Fund 001): FY 1977- 78 . . . . . . . 1- 122

( a) Analysis of Tax Rates f o r Type 02 D i s t r i c t s . . . . . . . . . . . . 1- 122

( b) Analysis of Tax Rates for Type 03 D i s t r i c t s . . . . . . . . . . . . 1- 124

( c) Analysis of Tax Rates f o r Type 04 D i s t r i c t s . . . . . . . . . . a . 1- 126

( d) Analysis of Tax Rates for Type 05 D i s t r i c t s . . . . . . . . . . . . 1- 129

4 . Special Education ( Fund 002): FY 1977- 78 . . . . . . . . . . . . . . . 1- 130

( a) Analysis of Tax Rates for Type 02 D i s t r i c t s . . . . . . . . . . . . 1- 130

( b) Analysis of Tax Rates for Type 03 D i s t r i c t s . . . . . . . . . . . . 1- 132

( c) Analysis of Tax Rates for Type 04 D i s t r i c t s . . . . . . . . . . . . 1- 134

( d) Analysis of Tax Rates f o r Type 05 D i s t r i c t s . . . . . . . . . . . . 1- 137

5 . Transportation ( Fund 004): FY 1977- 78 . . . . . . . . . . . . . . . . 1- 138

( a) Analysis of Tax Rates for Type 02 D i s t r i c t s . . . . . . . . . . . . 1- 138

( b) Analysis of Tax Rates for Type 03 D i s t r i c t s . . . . . . . . . . . . 1- 140

( c) Analysis of Tax Rates for Type 04 D i s t r i c t s . . . . . . . . . . . . 1- 142

( d) Analysis of Tax Rates for Type 05 D i s t r i c t s . . . . . . . . . . . . 1- 144

6 . Budgeted Capital Outlay ( Fund 410): FY 1977- 78 . . . . . . . . . . . . 1- 145

( a) Analysis of Tax Rates for Type 02 D i s t r i c t s . . . . . . . . . . . . 1- 145

( b) Analysis of Tax Rates for Type 03 D i s t r i c t s . . . . . . . . . . . . 1- 147

( c) Analysis of Tax Rates for Type 04 D i s t r i c t s . . . . . . . . . . . . 1- 149

( d) Analysis of Tax Rates for Type 05 D i s t r i c t s . . . . . . . . . . . . 1- 151

7 . Capital Levy ( Fund 420): FY 1977- 78 . . . . . . . . . . . . . . . . . . 1- 15?

( a) Analysis of Tax Rates for Type 02 D i s t r i c t s . . . . . . . . . . . . 1- 152

( b) Analysis of Tax Rates for Type 03 D i s t r i c t s . . . . . . . . . . . . 1- 154

( c) Analysis of Tax Rates for Type 04 D i s t r i c t s . . . . . . . . . . . . 1- 156

( d) Analysis of Tax Rates for Type 05 D i s t r i c t s . . . . . . . . . . . . 1- 158

8 . D( ae) b t ASenravlyicseis ( Fouf nTd a5x0 R0) a: t esF Yf o1r9 T77y- p7e8 02 D i s t r i c t s .. .. .. .. .. .. .. .. .. .. .. .. 11-- 115599 ( b) Analysis of Tax Rates for Type 03 D i s t r i c t s . . . . . . . . . . . . 1- 161 ( c) Analysis of Tax Rates for Type 04 D i s t r i c t s . . . . . . . . . . . . 1- 163

( dl Analysis of Tax Rates for Type 05 D i s t r i c t s . . . . . . . . . . . . 1- 165

INTRODUCTION

The Overview of Public School Finance i n Arizona provides a foundation for under-standing

the system of funding public schools i n Arizona. The f i r s t section of the

overview describes each of the current areas of school d i s t r i c t expenditures:

General Maintenance and Operation ( basic education programs), Special Education

( Handicapped), Special P r o j e c t s ( S t a t e and Federal), Transportation, and Capital

Outlay/ Debt Service. In addition t o the expenditures which are made by a school

d i s t r i c t , the overview also describes expenditures which are made a t the county

level for teacher retirement.

The second section of the overview provides a review of the current expenditure and

revenue limitations which have been placed upon Arizona school d i s t r i c t s .

Section three presents an analysis of the current school finance system f o r the

following areas: General Maintanance and Operation, Special Education ( Handi-capped),

Transportation, Budgeted Capital Outlay, Capital Levy Fund and Debt

Service.

Finally, the fourth section of the overview presents a description of a l t e r n a t i v e

methods of financing public schools. Presented i n t h i s section are explanations of

the basic a l t e r n a t i v e s for funding education programs.

I. SCHOOL FINANCE -- PRESENT SYSTEM

A. D e s c r i ~ t i o no f School Budeet Areas

Rather than attempting t o describe Arizona's school finance system as a whole,

t h i s overview discusses each area of a school d i s t r i c t ' s budget s e p a r a t e l y .

Currently, a school d i s t r i c t ' s budget is divided i n t o e i g h t d i s t i n c t budget

areas. The following t a b l e presents a c t u a l school d i s t r i c t expenditures for FY

1977- 78 by budget area:

TABLE 1

Actual School D i s t r i c t Expenditures for FY 1977- 78

by Budget Area

5. Capital P r o j e c t s

c. Adjacent Ways

d. Bond Building

Budget areas 1 through 8 are contained within a school d i s t r i c t ' s budget and most

of these w i l l be discussed i n the overview which follows. The areas which are not

l a t e r d e t a i l e d a r e : Bond Building, Other C a p i t a l P r o j e c t s , Enterprise, and Other.

A b r i e f d e s c r i p t i o n of each follows:

Bond Building: This fund is used t o account f o r monies received from school

d i s t r i c t bond issues. The Debt Service Fund ( Fund 500) is used t o r e t i r e the

issued bonds. Therefore, i f both funds were viewed as expenditures, double

counting would r e s u l t . The fund which impacts on a d i s t r i c t ' s rax rate is the

Debt Service Fund, which is used t o r e t i r e bond issues. This fund is f u l l y

discussed l a t e r i n the overview.

Other C a p i t a l P r o j e c t s : This fund includes a l l other C a p i t a l Outlay trans-a

c t i o n s which a r e not included i n the o t h e r f o u r Capital Outlay funds. Basi-c

a l l y , t h i s fund includes any f e d e r a l monies received through the 815 program

( F a c i l i t i e s Construction Assistance i n areas impacted by f e d e r a l involvement),

monies received through the School F a c i l i t i e s Emergency Aid progran ( s t a t e

funded f o r FY 1974- 75), and monies received through p r i v a t e grants.

Enterprise Fund: This fund is used t o account f o r t h e a c q u i s i t i o n , operation,

and maintenance of school services which a r e e n t i r e l y o r predominantly s e l f -

supporting. Included i n t h i s fund a r e t h e Food S e r v i c e , C i v i c Center, and

Community Schools fund.

Other Fund: This fund accounts f o r funds which a r e not included i n any other

funds, such a s the P a y r o l l Clearing fund.

Section 9 of Table 1, Teacher Retirement and OASI, is not an area of a school

d i s t r i c t ' s budget. However, it is an expense d i r e c t l y associated with a

school d i s t r i c t and is thus included withi. n the overview. A d e s c r i p t i o n is

contained l a t e r within the overview.

The f i r s t budget area which is f u l l y described is General Maintenance and

Operation, which comprises a majority of a school d i s t r i c t ' s expenditures.

1. GENERAL MAINTENANCE AND OPERATION

a. Description

As Table 1 i n d i c a t e d , the General Maintenance and Operation budget

area comprises a majority of a school d i s t r i c t ' s expenditures ( 64.0%).

This budget area contains a l l school d i s t r i c t expenditures not included

i n other s p e c i f i c categories. This includes Administration, Instruc-t

i o n , and Operation; or put another way, t h e b a s i c education program.

S p e c i f i c a l l y , the following expenditure items a r e included:

S a l a r i e s -- C e r t i f i e d and C l a s s i f i e d

Employee Benefits

Sick Leave Payments

Supplies and Materials

U t i l i t i e s

Communications

Tuition

Other Expenses

Utilities Excess Cost

Lease Over One Year

Employee Benefits Excess Cost

The General Maintenance and Operation budget area is the o n l y a r e a of the

budget which was " equalized" as a r e s u l t of Senate B i l l 1001, which was

passed during the F i r s t Special Session of the Thirty- First L e g i s l a t u r e i n

1974. The School Finance Equalization System, e s t a b l i s h e d i n 1974, is

e s s e n t i a l l y the same school finance system which is i n e f f e c t today.

b. History: Basic Education Aid

The following s e c t i o n provides a brief h i s t o r y of the s t a t e b a s i c a i d

program which provided funds f o r the Maintenance and Operation budget

area and which was i n e f f e c t p r i o r t o FY 1967- 68, and from FY 1967- 68

t o FY 1974- 75. This s e c t i o n a l s o provides a b r i e f d e s c r i p t i o n of the

current program a s it has been i n e f f e c t since FY 1974- 75.

S t a t e Basic Aid P r i o r t o FY 1967- 68: Aid payments were made per

pupil on an Average Daily Attendance ( ADA) b a s i s t o a possible $ 200 per

ADA. The s t a t e contributed $ 170, the county $ 10, and i n a d d i t i o n t h e

counties a l s o s e t $ 20 per ADA i n an e q u a l i z a t i o n fund t o be d i s t r i b u t e d

to the poorer d i s t r i c t s i n the county.

S t a t e Basic Aid FY 1967- 68 t o FY 1974- 75: For elementary d i s t r i c t s ,

the s t a t e provided $ 182.50 per ADA, and the county provided $ 17.50 per

ADA. In a d d i t i o n , the s t a t e provided a n a d d i t i o n a l - $ 1 7 5 per ADA l e s s

the amount which could be raised by a $. lo tax r a t e i n each d i s t r i c t

whose assessed v a l u a t i o n p e r ADA was l e s s than the statewide average

f o r a l l elementary d i s t r i c t s . High school d i s t r i c t s received $ 182.50

per ADA from the s t a t e and $ 17.50 per ADA from the county. The s t a t e

provided an a d d i t i o n a l $ 300 per ADA l e s s the amount which could be

r a i s e d by a $. lo tax r a t e i n each d i s t r i c t whose assessed valuation

per ADA was l e s s than the statewide average f o r all. high school dis-t

r i c t s . Although t o t a l s t a t e basic aid i n FY 1973- 74 was approximately

$ 100,000,000, only $ 14,500,000 of t h i s amount was d i s t r i b u t e d through

the e q u a l i z a t i o n formula. S t a t e aid f o r both elementary and high

school d i s t r i c t s had t o be used f o r the maintenance and operation of

the school d i s t r i c t s . The l a s t major f e a t u r e of school finance during

t h i s pertod was the " 6% budget l i m i t . " Under the s t a t u t o r y provision

of t h e c o n t r o l school d i s t r i c t s were authorized t o increase the

o p e r a t i o n a l budget by an amount c a l c u l a t e d each year as a 6% increase

over the statewide average budgeted operational expenditures per ADA

f o r t h e p r i o r year.

S t a t e Basic Aid FY 1974- 75 t o Present: Senate B i l l 1001, passed

during the F i r s t Special Session of the Thirty- First L e g i s l a t u r e i n

1974, e s t a b l i s h e d a school finance system i n Arizona s i m i l a r to the

e q u a l i z a t i o n aid system of Minnesota, and was designed t o provide more

equity among the school d i s t r i c t s i n the s t a t e i n the tax e f f o r t s per

d o l l a r of assessed valuation required t o fund l o c a l education. The

Arizona funding approach s t a r t s from an " average" expenditure l e v e l

per classroom, o r s t a r t e d from t h e a c t u a l cost l e v e l f o r d i s t r i c t s

which were below t h e average expenditure l e v e l per classroom, and then

deducts a uniform l o c a l t a x e f f o r t per d o l l a r of assessed valuation t o

a r r i v e at t h e l e v e l of s t a t e aid. The " qualifying tax rate" or uniform

l o c a l e f f o r t is $ 1.30 per $ 100 of assessed valuation.

c. Present School Finance System: D e f i n i t i o n s

As the preceeding h i s t o r y i n d i c a t e d , the school finance system which

was i n e f f e c t p r i o r to the current finance system b a s i c a l l y provided a

fixed d o l l a r amount per student on an average d a i l y attendance b a s i s

with a small amount of e q u a l i z a t i o n aid.

The present school finance system i n Arizona is an e q u a l i z a t i o n aid

system and is designed t o provide more equity among the school dis-t

r i c t s i n the s t a t e i n t h e t a x e f f o r t s per d o l l a r of assessed valuation

required t o fund l o c a l education. The Arizona funding approach starts

from an " average" expenditure l e v e l per classroom and then deducts a

uniform l o c a l tax e f f o r t per d o l l a r of assessed valuation to a r r i v e a t

s t a t e a i d . The " qualifying tax rate" or uniform l o c a l e f f o r t is $ 1.30

per $ 100 of assessed valuation.

The following s e c t i o n s d e f i n e the three key terms which must be under-stood

i n order to understand the Arizona school finance system.

The S t a t e Basic Support Level: The s t a t e Basic Support Level ( BSL)

is the level of funding which the s t a t e guarantees t o school d i s t r i c t s

before applying the uniform l o c a l tax r a t e of $ 1.30 per $ 100 t o the

d i s t r i c t s ' a s s e s s e d v a l u a t i o n s . In N 1978- 79, the support l e v e l is

$ 1,044.90 per elementary student and $ 1,423.59 per high school stu-dent.

The FY 1979- 80 BSL w i l l be 7% higher than the 1978- 79 l e v e l .

The L e g i s l a t u r e had u n t i l March 1, 1979 t o prescribe a d i f f e r e n t

growth r a t e f o r N 1979- 80. As the L e g i s l a t u r e f a i l e d t o provide a

growth r a t e f o r the upcoming school y e a r , t h e growth r a t e from t h e cur-rent

year ( 7%) is used to a d j u s t t h e BSL. The Basic Support Level was

prescribed i n s t a t u t e f o r FY 1973- 74 and has grown a t 7% per year since

t h a t t i m e . The following t a b l e i l l u s t r a t e s the BSL per elementary and

high school ADM.

TABLE 2

S t a t e Basic Support Level per ADM

f o r Elementary and High Schools

The Budget Cost Level: In FY 1973- 74, a Budget Cost Level ( BCL) was

determined f o r each d i s t r i c t . The BCL is based on the revenue col-l

e c t i o n s of a d i s t r i c t i n FY 1973- 74 which roughly corresponded t o

expenditures i n most school d i s t r i c t s . The BCL has grown each year by

the same d o l l a r amount which the s t a t e BSL has grown, except when a

d i s t r i c t ' s bud- g et cost l e v e l was below the s t a t e BSL. ( This aspect of

the c u r r e n t e q u a l i z a t i o n aid system is discussed l a t e r i n t h i s s e c t i o n . )

The BCL is determined s e p a r a t e l y f o r common school d i s t r i c t s and high

school d i s t r i c t s . The BCL was used i n the determination of s t a t e aid

from FY 1974- 75 through FY 1977- 78. It a l s o forms the b a s i s f o r the

General Maintenance and Operation budget c o n t r o l imposed on school

d i s t r i c t s .

Qualifying Tax Rate: The Qualifying Tax Rate is t h e uniform l o c a l

tax e f f o r t per d o l l a r of assessed valuation required of a school

d i s t r i c t before it receives any s t a t e basic aid. The Qualifying Tax

Rate is used only f o r computational purposes i n the determination of a

d i s t r i c t ' s entitlement t o s t a t e basic aid and is $ 1.30 per $ 100

assessed valuation from common and high schools and $ 2.60 per $ 100

assessed valuation f o r unified schools. The qualifying tax r a t e is

only used t o compute the entitlement t o s t a t e a i d , and t h e a c t u a l levy

f o r a school d i s t r i c t i n a given year may be less than the qualifying

tax r a t e due t o the f a c t t h a t cash balances may be a v a i l a b l e t o

individual school d i s t r i c t s or an i n d i v i d u a l school d i s t r i c t may

choose t o spend below the allowable l e v e l .

d. Calculation of S t a t e Basic Aid

S t a t e aid is c a l c u l a t e d s e p a r a t e l y f o r common and high school d i s -

t r i c t s ; and the elementary and high school components of unified school

d i s t r i c t s a r e a l s o c a l c u l a t e d separately. The f i r s t s t e p i n the

c a l c u l a t i o n is t o multiply t h e Basic Support Level per ADM by the ADM

of the d i s t r i c t o r multiply t h e state Basic Support Level by the number

of s t a t e supported classrooms ( a s t a t e supported classroom is defined

as 24 ADM f o r high school and 26 ADM f o r elementary.)

The second step is t o s u b t r a c t the amount which would be raised by

applying the $ 1.30 qualifying tax r a t e to the d i s t r i c t ' s assessed

valuation. The r e s u l t is the d i s t r i c t ' s e n t i t l e m e n t t o s t a t e basic

aid. I f the c a l c u l a t e d levy amount is i n excess of the Basic Support

Level, then the school d i s t r i c t is not e n t i t l e d t o receive s t a t e a i d .

Thus, a d i s t r i c t with low assessed valuation w i l l receive more s t a t e

aid than a d i s t r i c t with high assessed v a l u a t i o n even though the

d i s t r i c t s a r e i n a l l o t h e r r e s p e c t s the same.

Examples of the Calculation of S t a t e Basic Aid

The following information is given f o r two h y p o t h e t i c a l common school

d i s t r i c t s .

D i s t r i c t A

Assessed Valuation ( A. V.)

Qualifying Tax Lev 1.30 per $ 100 A. V.

20 oog,; o8) - 260,000

($ 1.30 X

Basic Suport Level, 1978- 79, per ADM = 1,044.90

D i s t r i c t B

Assessed Valuation ( A. V.)

Qualifying Tax Levy = $ 1.30 per $ 100 A. V.

5 000 000

)

--

($ 1.30 X ' 65,000

Basic Support Level, 1978- 79 per ADM = 1,044.90

D i s t r i c t A has more assessed valuation than D i s t r i c t B. D i s t r i c t s A

and B each have 520 students.

The f i r s t s t e p i n the c a l c u l a t i o n of s t a t e aid is t o determine the

state Basic Support Level. For 11at:: i . l i ~ t r i c t . This is done by multi-plying

the Basic Support Level per ADM f o r the budget year by the ADM

i n each d i s t r i c t .

D i s t r i c t A

$ 1,044.90 xs20 = $ 543,348

D i s t r i c t B

$ 1,044.90 xS20 = $ 543,348

These amounts a r e the d i s t r i c t s ' Basic Support Levels f o r FY 1978- 79.

The second s t e p is t o s u b t r a c t the amount which would be raised by

applying the qualifying tax r a t e t o the school d i s t r i c t s ' assessed

valuations from t h e d i s t r i c t s ' Basic Support Levels. The r e s u l t is

each d i s t r i c t ' s entitlement to state basic aid.

D i s t r i c t A

( AV)

BSL - ( QTR) ( 100) = S t a t e Aid

D i s t r i c t B

BSL - ( QTR) 0 = S t a t e Aid

D i s t r i c t A's entitlement t o s t a t e b a s i c a i d is $ 283,348 and D i s t r i c t

B's entitlement t o s t a t e b a s i c a i d is $ 478,348, even though they serve

the same number of students. The only reason f o r t h i s d i f f e r e n c e is

the extreme d i f f e r e n c e i n the assessed valuations of the d i s t r i c t s .

However, i f both d i s t r i c t s chose t o spend a t the Basic Support Level,

both would only have t o levy a tax rate of $ 1.30. The following

example shows the impact of t h e e q u a l i z a t i o n e f f e c t of the current

s t a t e aid formula on a per pupil b a s i s .

Chart 1

Impact of the Equalization Effect

of the Current S t a t e Aid Formula

Tax Rate Necessary t o

Provide Expenditure

Level Equal t o the

As t h i s example shows, the amount of s t a t e a i d p e r pupil can vary based

upon the r e l a t i v e wealth of a school d i s t r i c t . However, with an equal

tax e f f o r t ($ 1.30) both School D i s t r i c t A and School D i s t r i c t B w i l l be

able t o expend $ 1,044.90 on each of t h e i r students.

e. Budget Limit

The General Maintenance and Operation ( M& O) budget area is c o n t r o l l e d

by the " 7% l i m i t a t i o n " . The 7% l i m i t a p p l i e s to only p a r t of the

budget area. Excluded from the budget l i m i t a r e U t i l i t i e s Excess Cost,

Lease Over One Year, and Employee Benefits Excess Cost.

The 7% l i m i t not only l i m i t s the General M& O budget area, but a l s o

l i m i t s the annual growth of the Basic Support Level ( BSL) which is a

c r u c i a l p a r t of the s t a t e funding mechanism. The l i m i t i n g e f f e c t of

the 7% growth rate comes from t h e f a c t t h a t a d i s t r i c t ' s Budget Cost

Level ( BCL), which controls t h e d i s t r i c t ' s budget l i m i t , is allowed t o

increase each year by t h e d o l l a r amount of growth i n the BSL.

For example, the BSL for elementary school d i s t r i c t s increased from

$ 25,390.12 i n FY 1977- 78 t o $ 27,167.43 i n FY 1978- 79, an increase of

7%. The d o l l a r amount of increase was $ 1,777.31. Assume t h a t a

d i s t r i c t had a BCL, or budget l i m i t , of $ 28,020 i n FY 1977- 78. In

FY 1978- 79, the d i s t r i c t ' s BCL, or budget l i m i t , would be determined

by adding t h e d o l l a r amount of increase i n the BSL f o r the two years

($ 1,777.31) t o the d i s t r i c t ' s FY 1977- 78 BCL ($ 28,020). The r e s u l t -

ing FY 1978- 79 BCL, or budget l i m i t , would thus be $ 29,797.31. The

BCL f o r the d i s t r i c t thus grew from $ 28,020 i n FY 1977- 78 t o

$ 29,797.31 i n FY 1978- 79. The percentage was 6%, not 7%.

Thus, for school d i s t r i c t s with BCL's g r e a t e r than the BSL, the

M& O budgets are limited to l e s s than 7% growth on a classroom or ADM

b a s i s . The 7% l i m i t applies d i r e c t l y t o the BSL and not the BCL.

The d o l l a r amount of increase in the BSL i s added t o the BCL.

The t o t a l d o l l a r l i m i t may increase or decrease depending on the

number of ADM and, i n turn, the number of classrooms; but on a per

classroom or per ADM b a s i s t h e l i m i t w i l l increase a t a maximum of

7%. This mechanism i s aimed a t equalizing the expenditures per

classroom or per ADM statewide, r e g a r d l e s s of a d i s t r i c t ' s wealth by

slowing down " high spending" d i s t r i c t s ' overtime. However, a dis-t

r i c t may s t i l l exceed the s t a t e imposed budget l i m i t increase

through a budget override e l e c t i o n .

The following c h a r t s i l l u s t r a t e the equalization e f f e c t of the 7%

budget l i m i t and t h e e f f e c t t h a t budget overrides have upon it.

Chart 2 depicts the growth i n the Basic Support Level for an elemen-t

a r y s t a t e supported classroom. The BSL for an elementary classroom

was s e t a t $ 19,370 i n FY 1973- 74. In FY 1974-- 75 the BSL grew by 7%

t o $ 20,726 ($ 19,370 x 0.07 = $ 1,356; $ 19,370 + $ 1,356 = $ 20,726). As

the growth r a t e has remained a t 7%, t h i s process is continued through

FY 1978- 79, as shown in Chart 2.

Chart 3 i l l u s t r a t e s the budget l i m i t of an elementary classroom i n

D i s t r i c t A which had a BCL i n FY 1973- 74 of $ 22,000. The BCL for the

classroom was i n excess of the Basic Support Level i n FY 1973- 74. As

s t a t e d previously, the BCL grows each year by the d o l l a r amount of

growth i n the BCL ( Chart 2 p r e s e n t s t h e d o l l a r amounts of growth).

Thus, i n FY 1974- 75, the BCL, or budget l i m i t , f o r t h e elementary

classroom was $ 23,356. This was determined by adding:

FY 1973- 74 BCL

- Dollar Growth i n BSL

FY 1974- 75 BCL

As shown in Chart 3, the BCI, for the elementary classroom grew only

6%. This addition procedure i s continued through FY 1978- 79 as shown

in Chart 3, with the r e s u l t t h a t the BCL grew a t 6% per year.

Chart 4 i l l u s t r a t e s the budget l i m i t of an elementary classroom i n

D i s t r i c t B which had a BCL i n FY 1973- 74 of $ 15,000. The BCL f o r

t h i s classroom was l e s s than the Basic Support Level i n FY 1973- 74.

For d i s t r i c t s which had a BCL less than the Basic Support Level i n

FY 1973- 74, a five- year Special Budget Increase was allowed. This

was an i n t e g r a l p a r t of the e q u a l i z a t i o n aspect of the Special Budget

Increase, by the end of the five- year period ( FY 1978- 79), no school

d i s t r i c t has a Budget Cost Level below the Basic Support Level.

Mechanically, a s i l l u s t r a t e d on Chart 4, the five- year Special Bud-get

Increase operated as follows:

The BCL i n N 1973- 74 f o r the classroom was $ 15,000, and t o a r r i v e

a t the FY 1974- 75 BCL f o r the classroom, four s t e p s were required.

1. The d o l l a r amount of increase i n the BSL was added t o the

N 1973- 74 BCL ($ 15,000 + $ 1,356 = $ 16,356).

2. The r e s u l t i n g amount was compared t o the FY 1974- 75 BSL t o

determine the d i f f e r e n c e ($ 20,726 - $ 16,356 = $ 4,370). Thus,

the BCL was s t i l l l e s s than the s t a t e BSL by $ 4,370.

3. The d i f f e r e n c e was divided by the number of years remaining

i n the five- year period ( FY 1974- 75 = 5 years; FY 1975- 76 = 4

years; FY 1976- 77 = 3 years; FY 1977- 78 = 2 years; N 1978- 79 =

1 year). As FY 1974- 75 was the f i r s t year the system was i n

operation, t h e df f f erence was divided by f i v e as t h e r e were f i v e

years remaining ($ 4,370 9 5 = $ 874).

4. The amount computed i n s t e p c was added t o the amount computed

i n step a ( the d o l l a r amount of growth i n the BSL added t o

FY 1973- 74 BCL equaling $ 16,356) t o a r r i v e at t h e BCL of the

classroom i n FY 1974- 75:

Chart 4 shows the procedure f o r a l l f i v e years f o r which the Special

Budget Increase was i n e f f e c t . From FY 1973- 74 t o FY 1974- 75, t h e BCL

grew 15%; from FY 1974- 75 t o FY 1975- 76, t h e BCL grew 13%; and t h i s

growth p a t t e r n continued u n t i l FY 1978- 79, when the BCL was equal t o

the BSL.

Chart 5 combines the information presented on t h e t h r e e preceding

c h a r t s . It i l l u s t r a t e s two h y p o t h e t i c a l elementary school classrooms

i n D i s t r i c t A and D i s t r i c t B and begins with the elementary BSL i n N

1973- 74 and shows the BSL increasing a t 7% per year ( Chart 2).

D i s t r i c t A had a BCL g r e a t e r than the BSL while D i s t r i c t B had a BCL

l e s s e r than the BSL. In order t o equalize the allowable expenditure

l e v e l s between the two d i s t r i c t s around the BSL, it was necessary t o

hold D i s t r i c t A's allowable expenditure l e v e l down, while at t h e same

t i m e allowing D i s t r i c t B ' s allowable expenditure l e v e l t o increase.

As discussed previously, D i s t r i c t A's allowable expenditure l e v e l was

limited by t h e d o l l a r amount of growth i n the BSL ( Chart 3). D i s -

trict B's allowable expenditure l e v e l was " brought up'' t o the BSL

through a Special Budget Increase, o r " five- year catch- up program"

( Chart 4).

CHART 2

Growth in the Basic Support Level for an Elementary Classroom

BSL

CHART 3

Growth in the Budget Cost Level ( Budget Limit) for an Elementary Classroom

whose BCL was in Excess of the Basic Support Level

District A

BCL

BSL

CHART 4

Growth in the Budget Cost Level ( Budget Limit) for an Elementary Classroom

whose BCL was Less than the Basic Support Level

BSL

District B

BCL

Special 20,726

Budget - 16,356 -

Increase 4,370

CHART 5

7% Budget Limit and the Effect of Overrides

District A

BCL

BSL

District B

BCL

To i l l u s t r a t e the e q u a l i z a t i o n e f f e c t , i n N 1973- 74, D i s t r i c t A's

BCL was approximately 47% g r e a t e r than D i s t r i c t B's. In N 1978- 79,

the d i f f e r e n c e is only lo%, not taking i n t o consideration the budget

override amount which is shown on Chart 5. The dotted l i n e on the

chart i l l u s t r a t e s t h e e f f e c t t h a t a $ 1,000 budget override by D i s -

t r i c t A had upon equalization. The $ 1,000 override is simply added

t o D i s t r i c t A's BCL each year with no growth allowed i n t h e amount.

Thus, with the override included, i n FY 1978- 79 D i s t r i c t A's allow-able

budget l i m i t was 13% g r e a t e r than D i s t r i c t B's. The override

produces a d i s e q u a l i z a t i o n e f f e c t with t h e r e s u l t t h a t t h e allowable

expenditure l e v e l s of the two d i s t r i c t s d i f f e r e d by 13% instead of

the 10% which would have occurred had the override not taken place.

f . Budget Override Elections

Budget override e l e c t i o n s have been held s i n c e FY 1975- 76. A budget

override allows a d i s t r i c t t o exceed the s t a t u t o r i l y imposed budget

l i m i t . A l l the override e l e c t i o n s which have passed t o date were f o r

d i s t r i c t s t o exceed the General Maintenance and Operation budget area

budget l i m i t ( the " 7%" l i m i t ) .

The following two t a b l e s present d i s t r i c t s which have had override

e l e c t i o n s . Table 3 shows the t o t a l amount of the overrides f o r each

d i s t r i c t from FY 1975- 76 ( the f i r s t year they were allowed) t o FY

1978- 79. The second column shows the tax r a t e equivalent f o r the t o t a l

override amounts based on the FY 1978- 79 assessed valuation of the

d i s t r i c t . The average override tax r a t e equivalent is $ 0.70.

TABLE 3

Total Override Amounts from FY 1975- 76 through FY 1978- 79 by D i s t r i c t ;

Tax Rate Equivalent of Override Amounts i n FY 1978- 79;

FY 1979- 80 Override Amounts by D i s t r i c t ;

Total Override Amounts from FY 1975- 76 through FY 1979- 80 by D i s t r i c t

Total

N 1975- 76 Overrides

through Tax Rate FY 1979- 80 FY 1975- 76

County - M 1978- 79 Equivalent Override through

D i s t r i c t Override Amts. FY 1978- 79 Amounts FY 1979- 80

Apache

Cochise

Willcox Unif . / I13 $ 80,000

Douglas Unif. / I27 273,272

Coconino

F l a g s t a f f Unif. / I1 474,420 0.3485

W i l l i a m s Unif. # 2 64,130 0.2068

Grand Canyon Unif. / I4 99,865 1.7494

Fredonia/ Moccasin 100,000 1.7770

Unif. / I6

Page Unif. / I8 937,617 0.6566

FY 1975- 76

through

FY 1978- 79

County- District Override Amts.

Gila

HaydenIWinkelman $ - 0-

Unif. f41

Graham

Total

Overrides

Tax Rate FY 1979- 80 FY 1975- 76

Equivalent Override through

FY 1978- 79 Amounts FY 1979- 80

Greenlee

Clifton Unif. I/ 3

Morenci Unif. I118 161,712

Maricopa

Phoenix E l . !/ 1

Riverside El. I/ 2

Tempe E l . I/ 3

Isaac E l . # 5

Washington El. I/ 6

Wilson El. I/ 7

Osborn E l . I/ 8

Creighton E l . I/ 14

Murphy E l . # 21

Balsz El. f31

Buckeye E l . 4/ 33

Madison E l . // 38

Glendale E l . 1/ 40

Avondale El. 844

Palo Verde E l . I149

Union E l . % 62

Roosevelt E l . IF66

Alhambra El. 868

Chandler Unif. 1/ 80

Cartwright E l . I/ 83

Buckeye UHS IF1

Gila Bend Unif. / I24

Mohave

Topock El. / I12 30,475

Lake Havasu E l . 1\ 25 75,000

Navajo

Snowflake Unif. // 5

P ima

Flowing Wells Unif. I18 399,967

Amphitheater Unif. 810 350,000

Ajo Unif. 1/ 15 173,879

FY 1975- 76

through

FY 1978- 79

County- District Override Amts.

Pinal

Casa Grande El. / I4 $ 169,996

Red Rock El. 115 24,738

Picacho El. 1/ 33 30,000

Ray Unif. 1113 - 0-

M/ SM Unif. / I8 600,000

Superior Unif . / I15 569,527

Santa Cruz

Sonoita El. 1\ 25

Y avap ai

Bagdad Unif . / I20 107,945

Ash Fork Unif . / I31 61,261

* Seligman Unif. / I40 125,146

- Yuma

Yuma El. / I1 779,029

Quartzsite El. W4 42,500

Hyder El. / I16 21,600

Mohawk Valley El. 1/ 17 55,000

Wenden El. / I19 14,634

Wellton El. / I24 62,000

Tax Rate

Equivalent

FY 1978- 79

Total

Overrides

N 1979- 80 N 1975- 76

Override through

Amounts FY 1979- 80

TOTAL $ 17,494,919 $ 1,460,000 $ 18,954,919

Average Override Tax $ 0.7000

Rate Equivalent

* Total Election Amount = $ 150,671.08; of the t o t a l $ 125,146.08 was f o r the override

and $ 25,525.00 was f o r a judgement.

Table 4 i n d i c a t e s t h e d i s t r i c t s which have h e l d o v e r r i d e e l e c t i o n s which have

f a i l e d . The t a b l e a l s o i n d i c a t e s whether or not the d i s t r i c t has ever had an

override pass. Since FY 1975- 76, 102 override e l e c t i o n s have been held of which 27

have f a i l e d . The 75 which have passed have allowed d i s t r i c t s t o exceed t h e i r

s t a t u t o r i l y imposed budget l i m i t s by $ 18,954,919.

TABLE 4

D i s t r i c t s Which Had Override Elections Which Failed

( P i n d i c a t e s t h a t the d i s t r i c t has had an override pass)

County- District

Apache

Cochise

Coconino

Gila

Graham

Greenlee

Maricopa

Phoenix El. ! I1

Isaac El. iI5

Washington El. # 6

Madison # 38

Glendale El. ! I40

Roosevelt El. / I66

Alhambra El. # 68

Scot t s d a l e Unif . iI4

Havasu El. # 25

son Unif. f 1

Sunnyside Unif. # 12

Ajo Unif. / I15

o t t Unif. ill

* Tucson Unif. ill and Prescott Unif. # I1 were n o t u n i f i e d i n FY 1975- 76 and held

s e p a r a t e e l e c t i o n s f o r elementary and high school.

PY 1975- 76 FY 1976- 77 FY 1977- 78 FY 1978- 79 FY 1979- 80

g. Homeowner Property Tax Reduction Program

Table 5 i l l u s t r a t e s the appropriations made f o r t h e property tax

reduction program.

TABLE 5

Appropriations f o r the Property Tax Reduction Program

FORMULA BASED UPON

* Less revenue from unorganized t e r r i t o r y ( estimate)

- 1973: The homeowner property tax reduction program o r i g i n a t e d i n

1973 as t h e l e g i s l a t i v e response t o s i g n i f i c a n t l y increased property

valuations due t o the i n i t i a t i o n of the Mass Appraisal System ( MAS).

In 1973, a l l tax r a t e s ( counties, c i t i e s , school d i s t r i c t s , e t c . )

were simply reduced by 25%.

1974- 1977: The F i r s t Special Session of the Thirty- First L e g i s l a t u r e

( 1973- 74), the school refinancing s e s s i o n , placed a new property

tax reduction formula i n t o law. The new formula was t i e d t o the new

method of school finance and was limited t o r e s i d e n t i a l property

contained i n organized school d i s t r i c t s . The property tax reduction

formula, i f it were funded a t f u l l computed e n t i t l e m e n t s , was

designed t o reduce a school d i s t r i c t ' s tax r a t e f o r general main-tenance

and operation purposes t o $ 0.10. Although s u b s t a n t i a l funds

were appropriated f o r the program, t h e program was never funded a t

the f u l l computed entitlement.

When the appropriation l e v e l was less than the computed entitlement

t o property tax reduction, each school d i s t r i c t ' s entitlement was

uniformly reduced u n t i l the appropriations f o r property tax reduction

were equal t o the scaled back entitlements. For example, i n 1976 the

t o t a l appropriation f o r secured property tax reduction was $ 33

m i l l i o n , of which $ 250,000 was held and then dispensed f o r adjust-ments

( e r r o r s i n the o r i g i n a l l y computed entitlements). Thus,

i n i t i a l l y t h e r e was $ 32.75 m i l l i o n a v a i l a b l e f o r secured property tax

reduction. The e n t i t l e m e n t s f a l l i n g out of t h e s t a t u t o r y formula f o r

secured property tax reduction, on the other hand, were i n excess of

$ 50 million. Consequently, a l l e n t i t l e m e n t s were reduced by approx-imately

35% t o reduce t o t a l secured property tax reduction t o $ 32.75

million. In 1977, t h e r e as $ 37.75 m i l l i o n a v a i l a b l e f o r secured

property tax reduction. However, computed e n t i t l e m e n t s were i n

excess of $ 55 million and so a l l e n t i t l e m e n t s were uniformly reduced

by approximately 31.5% t o reduce t o t a l secured property tax reduction

t o $ 37.75 million.

The property tax reduction program was keyed t o a d i s t r i c t ' s BCL,

BSL, and i n turn a school d i s t r i c t ' s s t a t e basic aid entitlement.

As previously mentioned, the reduction program was designed t o reduce

the d i s t r i c t ' s tax r a t e f o r general maintenance and operation pur-poses

to $ 0.10. As long as a d i s t r i c t ' s BCL was not more than 30%

g r e a t e r than the BSL, t h e d i s t r i c t ' s general M& O tax r a t e was t o be

reduced t o $ 0.10, i f the program had been f u l l y funded. The basic

s t e p s which were taken t o determine the reduction r a t e of a d i s t r i c t

were as follows:

( 1) Determine i f the BCL was l e s s than t h e BSL multiplied by 1.3

( 30% higher). I f it was less, the BCL was used. I f the BCL was

more than 30% higher than the BSL, it was limited t o the 30%

higher amount. A l l taxes a t t r i b u t e d t o the amount above 30%

were not e l i g i b l e f o r reduction.

( 2) S t a t e aid entitlement was subtracted from t h e BCL or " limited"

BCL determined i n ( 1).

( 3) The d i s t r i c t tax r a t e needed t o fund the r e s u l t determined i n

( 2) was computed.

( 4) $ 0.10 was subtracted from t h e tax rate determined i n ( 3) and

the r e s u l t was a d i s t r i c t ' s property tax reduction r a t e .

In e f f e c t , the property tax reduction program was designed t o

reduce a d i s t r i c t ' s tax rate f o r general maintenance and operation

purposes t o $ 0.10 provided t h a t the d i s t r i c t ' s BCL was not more than

30% g r e a t e r than the BSL. I f a d i s t r i c t ' s BCL was 30% g r e a t e r than

the BSL, t h e d i s t r i c t received no reduction f o r the tax r a t e neces-sary

t o r a i s e t h e amount i n excess of the 302 l i m i t .

Thus, the property tax reduction program was keyed d i r e c t l y t o the

state's school finance system and most s p e c i f i c a l l y t o the Budget

Cost Level. Therefore, i n order f o r the property tax reduction

program t o function as it was designed t o , t h e Budget Cost Level

had t o be a meaningful t e r m .

Analysis of the Property Tax Reduction Program i n 1974 through 1977.

As s t a t e d i n the d e s c r i p t i o n of the Budget Cost Level, the t e r m r e f e r s

to the revenue a d i s t r i c t received from s t a t e and l o c a l sources f o r

maintenance and operation i n FY 1973- 74. So, i n the b a s e y e a r ,

FY 1973- 74, the t e r m BCL included state and l o c a l revenue received

f o r everything but s p e c i a l p r o j e c t s , t r a n s p o r t a t i o n , c a p i t a l p r o j e c t s ,

and debt s e r v i c e .

However, i n FY 1973- 74 some d i s t r i c t s had l a r g e cash balances which

were included as revenues and thus the d i s t r i c t s ' BCL's were i n f l a -

ted r e l a t i v e t o t h e i r a c t u a l expenditure l e v e l s . Because of the

i n f l a t e d BCL's, some d i s t r i c t s had t h e i r e n t i r e d i s t r i c t tax r a t e

reduced t o $ 0.10 through the tax reduction formula. This was because

both the s t a t e basic aid entitlement and the property tax reduction

program were keyed t o t h e i n f l a t e d BCL. For example, i n FY 1973- 74

a d i s t r i c t may have a c t u a l l y needed $ 19,370 ( the BSL) t o operate a

classroom. However, when cash balances were included i n t h e com-putation

of the d i s t r i c t ' s BCL, the d i s t r i c t may have a r r i v e d a t a

BCL of $ 22,000. The tax reduction program was locked i n t o t h i s

$ 22,000 f i g u r e .

A h y p o t h e t i c a l school d i s t r i c t w i l l be used t o i l l u s t r a t e t h e impact

using t h e d i s t r i c t ' s a c t u a l BCL and assuming t h a t t h e d i s t r i c t ' s

a c t u a l needed revenue t o support a classroom is the same as the s t a t e

Basic Support Level. The key thing t o remember is t h a t both s t a t e

aid and the property tax reduction program were based on the assump-t

i o n t h a t the BCL was a n a c c u r a t e r e f l e c t i o n of spending and t h a t

d i s t r i c t s were a c t u a l l y spending t o t h i s l i m i t . The example is f o r

FY 1977- 78, t h e l a s t year which the program was s t r i c t l y t i e d t o

school finance data.

COMPUTED WITH BCL COMPUTED WITH ACTUAL EXPENDITURE LEVEL

( 1) E $ 2 8 , 0 2 0 = 1.1

BSL $ 25,390

( 2) $ 25,390 BSL - 13,000*

$ 12,390 S t a t e Aid

- EXP $ 25,390

BSL $ 25,390 = 1.0

$ 25,390 BSL - 13,000*

$ 12,390 S t a t e Aid

( 3) $ 28,020 BCL $ 25,390 Actual Expenditure Level - 12,390 S t a t e Aid - 12,390 S t a t e Aid

$ 15,630 Amount of Local Levy $ 13,000 Amount of Local Levy

( 4 ) $ 15,630 = $ 1.5630 tax r a t e $ 13,000

$ 1,000,000 + 100 $ 1,000,000 + 100

= $ 1.3000 tax r a t e

( 5) $ 1.5630 - 0.1000

$ 1.4630 Tax Reduction

- 0.1000

$ 1.2000 Tax Reduction

* 1,000,000 A. V. = amount raised by

100 qualifying tax r a t e

Thus, because of the method of computation i n the base year of the

d i s t r i c t ' s BCL, the d i s t r i c t was receiving more property tax reduc-t

i o n than the d i s t r i c t would have i f a c t u a l expenditures were used as

a b a s i s f o r computation.

Once again, both programs, school finance and property tax reduc-t

i o n s , assume t h a t d i s t r i c t s a r e a c t u a l l y budgeting and spending at

the Budget Cost Level. For d i s t r i c t s which had a Budget Cost Level

l e s s than the Basic Support Level, which did not spend t o t h e i r

computed BCL, the " excess" s t a t e aid received by the d i s t r i c t tended

to keep the d i s t r i c t ' s tax r a t e s lower than i f they had budgeted and

spent t o the maximum. This may have been d e s i r a b l e i n t h a t it

rewarded a d i s t r i c t which could operate a program without spending t o

the maximum allowed. For a l l d i s t r i c t s which spent below t h e i r BCL's

( whether the BCL was above or below t h e Basic Support Level) the

property tax reduction amount was overstat. ed as compared t o a c t u a l

spending, because the reduction program assumed t h a t the d i s t r i c t s

were spending t o t h e i r BCL's.

- 1978: The homeowner property tax reduction program was modified

f o r 1978. In 1978 the program was funded a t a l e v e l i n excess of

computed entitlements. The computed entitlement r a t e s were increased

by approximately 6%. The program continues t o reduce a homeowner's

school d i s t r i c t tax b i l l , but is no longer d i r e c t l y t i e d t o school

finance data. The program provided t h a t a homeowner would receive a

reduction at the g r e a t e r of the two following r a t e s :

1. 1977 School Tax Rate ( elementary and high school rates added)

less overrides x 0.35

2. 1977 Reduction Rate ( elementary and high school rates added) x

,-

1.156

The program was expanded t o cover homeowners l i v i n g outside of

organized school d i s t r i c t s . In the p a s t , t h e s e homeowners paid an

" in l i e u " school tax r a t e of $ 1.30, but were not e l i g i b l e f o r the

property tax reduction program. In 1978, these homeowners had the

" in l i e u " school tax rate reduced by approximately $ 1.00.

In 1978, school d i s t r i c t taxes and the " in lieu" school tax a r e

l e v i e d a g a i n s t an a d j u s t e d a s s e s s e d valuation determined by dividing

the a c t u a l assessed valuation by 1- 05. The reduction r a t e s were

applied t o t h e a c t u a l assessed valuation. Because of t h i s , t h e

school d i s t r i c t tax rate and the reduction rate a r e not d i r e c t l y

comparable as they a r e applied t o d i f f e r e n t valuations. A comparable

reduction r a t e t o the school d i s t r i c t rax r a t e can be computed. For

example, the homeowner who pays t h e " i n lieu" school tax rate of

$ 1.30 w i l l have a comparable reduction r a t e of $ 1.05.

- 1979: The homeowner property tax reduction program was continued

based upon the same rates as determined i n 1978. The program con-tinued

t o cover homeowners l i v i n g outside of organized school d i s -

t r i c t s . In addition s u f f i c i e n t funds were once again appropriated

t o ensure t h a t the entitlement rates computed i n 1978 would be

uniformly increased i n 1979.

2. SPECIAL EDUCATION: HANDICAPPED

The Special Education budget area provides f o r t h e funds which are

used by school d i s t r i c t s t o operate s p e c i a l education programs for

a l l e l i g i b l e handicapped and g i f t e d students. ( Because a d i f f e r e n t

funding mechanism i s used f o r g i f t e d s t u d e n t s , the g i f t e d program

w i l l be discussed i n Section C. Other S t a t e Education Programs.)

This budget area covers only the e x t r a or a d d i t i o n a l c o s t s f o r

s p e c i a l education. The expenditure items included within t h i s budget

area are the same as those contained i n the General Maintenance and

Operation budget area; i . e . , s a l a r i e s , b e n e f i t s , supplies and mate-r

i a l s , e t c . Capital Outlay and t r a n s p o r t a t i o n c o s t s for handicapped

and g i f t e d students are not included in t h i s budget area.

b. L e e i s l a t i v e Historv

Special education in Arizona public schools began i n 1929, when the

Arizona School for the Deaf and Blind was e s t a b l i s h e d . In 1961

l e g i s l a t i o n was passed c r e a t i n g a Division of Special Education i n

the Department of Education and ~ r 0 v i d i . na~ d d i t i o n a l funds per

average d a i l y attendance for each physically handicapped, educable

r e t a r d e d , and emotionally disturbed student. In 1971, funding was

provided for the g i f t e d , and in 1972 l e g i s l a t i o n was passed to

include children with s p e c i f i c learning d i s a b i l i t i e s . On May 14,

1973, a law was passed which mandated t h a t a l l school d i s t r i c t s

provide s p e c i a l education programs for the handicapped. This mandate

was t o , and d i d , become e f f e c t i v e during the 1976- 77 school year.

Since the passage of the Special Education Mandate i n 1973, much

concern has been r a i s e d by t h e L e g i s l a t u r e over s p e c i a l education.

The following is a l i s t i n g of l e g i s l a t i v e a c t i o n since the passage of

the Special Education Mandate.

1974 -- SB 1001: Legislation was passed authorizing county school

superintendents to e s t a b l i s h s p e c i a l education programs. Also

provided was s t a t e support for s p e c i a l education programs equal t o

90% of excess c o s t . " Excess cost" was defined as t h e a d d i t i o n a l cost

necessary t o educate a handicapped student above t h e c o s t of edu-c

a t i n g a non- handicapped student. ( Excess cost was not allowed t o

exceed the Basic Support Level per Average Daily Membership ( ADM) for

elementary and high school s t u d e n t s r e s p e c t i v e l y ) .

1975 -- HB 2416: L e g i s l a t i o n was passed providing t h a t s t a t e support

for s p e c i a l education programs not t o t a l more than the amount appro-p

r i a t e d . Growth r a t e s were e s t a b l i s h e d for t o t a l allowable excess

cost and t o t a l allowable number of students for s t a t e aid purposes.

Also, as an e q u a l i z a t i o n f a c t o r , a qualifying tax r a t e was estab-l

i s h e d which was equal t o the d i f f e r e n c e between the t o t a l allowable

excess cost and the appropriation. Budget c o n t r o l s for d i s t r i c t s '

s p e c i a l education programs beginning with FY 1977- 78 were added. The

growth i n a d i s t r i c t ' s budget was limited t o the percentage change i n

the t o t a l allowable number of students for s t a t e aid purposes plus

the percentage change m u l t i p l i e d by the annual growth r a t e ( 7% i n

previous y e a r s ) .

1977 -- HB 2023: L e g i s l a t i o n was passed which placed s e r i o u s l y

emotionally handicapped children under the Special Education mandate;

c l a r i f i e d d e f i n i t i o n s of handicapping conditions; c l a r i f i e d and

strengthened the evaluation and placement procedure t o be followed;

and provided a new method of funding by which " weights" a r e applied

t o the various handicapping conditions so t h a t t h e children i n the

more " severe and costly" handicapping c a t e g o r i e s receive more s t a t e

funding. Bilingual i n s t r u c t i o n was removed from t h e s p e c i a l educa-t

i o n budget. I n s t i t u t i o n a l voucher funds were e s t a b l i s h e d t o provide

f o r educational funding through the Department of Education f o r

handicapped children placed i n the Arizona S t a t e School f o r the Deaf

and Blind and Arizona Training Programs a t Coolidge, Phoenix, and

Tucson. The Department of Education was required t o a u d i t the

s p e c i a l education programs of school d i s t r i c t s .

1978 -- HB 2332: L e g i s l a t i o n was passed which removed the s p e c i a l educa-t

i o n budget l i m i t f o r d i s t r i c t s with an a c t u a l average d a i l y membership

of 500 or less.

-- BB 2426: L e g i s l a t i o n was passed which provided t h a t county

school superintendents must i s s u e c e r t i f i c a t e s of educational con-venience

f o r pupils t o a t t e n d school when t h e p u p i l s are placed i n a

r e s i d e n t i a l f a c i l i t y operated or supported by the Department of

Economic Security ( DES). The expenditures made by the d i s t r i c t which

were a t t r i b u t a b l e to t h e s e p u p i l s a r e exempt from t h e d i s t r i c t ' s

s p e c i a l education budget l i m i t i n the amount t h a t funds are received

f o r the pupils. In addition, t h e l e g i s l a t i o n provided t h a t d i s t r i c t s

may conduct j o i n t evaluations of handicapped pupils with DES i f the

pupils a r e receiving mental r e t a r d a t i o n programs or s e r v i c e s through

DES and f u r t h e r provided t h a t school d i s t r i c t s s h a l l e n r o l l handi-capped

p u p i l s who r e s i d e i n r e s i d e n t i a l f a c i l i t i e s operated or

supported by DES i f DES so requests.

c. Handicapped Students E l i g i b l e f o r Services

Under Arizona law, students who are from f i v e t o 21 years of age and

are handicapped t o such an extent t h a t they do not p r o f i t from t h e

regular school program and who need s p e c i a l education i n s t r u c t i o n ,

s p e c i a l support s e r v i c e s , o r both, a r e e l i g i b l e f o r placement i n a

s p e c i a l education program. The major d i s a b i l i t y c a t e g o r i e s are:

Mentally Retarded: Those c h i l d r e n w i t h s i g n i f i c a n t subaverage

general i n t e l l e c t u a l functioning which adversely aff e c t s educational

performance. Included i n t h i s category a r e children c l a s s i f i e d as

educable mentally handicapped ( W) and t r a i n a b l e mentally handi-capped

( TMH).

Seriously Emotionally Handicapped: Those c h i l d r e n with s e r i o u s

s o c i a l or behavioral problems so severe t h a t they require s p e c i a l

c l a s s e s or s p e c i a l s e r v i c e s .

Hearing and Visually Handicapped: Those c h i l d r e n whose hearing and

v i s i o n deviate from normal t o such a n e x t e n t t h a t s p e c i a l c l a s s e s or

s p e c i a l s e r v i c e s are required i n order f o r them t o be educated.

Homebound or Hospitalized: Those students who are unable to attend

school due to i l l n e s s , disease, accident, pregnancy, or handicapped

conditions. In order to be e l i g i b l e for placement in a homebound

program, a medical doctor must c e r t i f y that the student w i l l be

unable to attend regular c l a s s e s f o r a period of not l e s s than three

school months.

Physically Handicapped: Those children who have a physical handicap

or d i s a b i l i t y which impedes t h e i r educational progress in the regular - -

classroom without the support of special classes or special services.

Learning Disabled: Those children who exhibit a s i g n i f i c a n t dis-crepancy

between a b i l i t y and achievement when i n t e l l e c t u a l a b i l i t y ,

age, and previous educational experience in the regular classroom are

considered. Learning disabled does not include learning problems

which are due primarily to visual, hearing, speech, or motor handi-caps,

mental retardation, emotional disturbance, or environmental

disadvantage.

Speech Handicapped: Those children who have a communication disorder

such as s t u t t e r i n g o r impaired a r t i c u l a t i o n which c a l l s a t t e n t i o n to

the c h i l d ' s abnormal speech, i n t e r f e r e s with communication, or causes

the child to be maladjusted.

d. Distribution of Handicapped Students:

The State of Arizona currently has 10 categories of exceptionality in

special education. For the 1978- 79 school year the t o t a l special edu-cation

ADM accounted for 8.80% of the t o t a l s t a t e ADM. The number and

percentage for each special education category is shown in Table 6 .

TABLE 6

D i s t r i b u t i o n of Students by Handicapping Condition,

FY 1978- 79 ADM

Source: Arizona Special Education Census, ASEC 71, 6/ 79.

Category

Learning Disabled

Spreech Handicapped

Educable Mentally

Handicapped

Seriously Emotionally

Handicapped

Trainable Mentally

Handicapped

Homebound/ Hospitalized

Physically Handicapped

Hearing Handicapped

Multiple Handicapped

Visually Handicapped

Four c a t e g o r i e s of handicapping conditions account f o r over 90% of

the students served i n s p e c i a l education: learning disabled, speech

handicapped, educable mentally handicapped, and s e r i o u s l y emotionally

handicapped.

e. Types of Special Education Services

Percentage of A l l Students

0% 1% 2 % 3 % 4 % 5 %

I i I I

120,968 Students

I

14.28%

Two major i n s t r u c t i o n a l c l a s s i f i c a t i o n s , Resource Programs and

Self- contained Programs, a r e used i n Arizona. Table 7 lists t h e type

of s e r v i c e by category of exceptionality.

% 5%

I I

1 9,233 Students 11.88%

I

15,162 students1 1.05%

I

( 10.81% ( 3,977 Students)

I

1- 1 0.34%

0.13%

( 1,658 Students

I

( 628 Students)

I

[ 0.10% ( 499 Students)

I I / 0.09% ( 424 Students)

I I

0.08% ( 409 Students)

I I n 0.04% ( 198 Students)

I I

0% 1% 2% 3 % 4

TABLE 7

Type of Program i n Which Handicapping Students

were Served i n t h e 1977- 78 School Year

Key 1/////// 1 Resource Program

Physically Handicapped [ / / / / / / / / / / / / / / 6 9 % / / / / / //// / / / I /

Visually Handicapped ~ / / / / / / / / / / / / / / / / / / / / / / 9 6 % / / / / / / / / / / / / / / / / / / / / / 4% 1

Hearing Handicapped ~ / l l l l l l l l l l l l l l l l l l l / 8 s ~ / l l l l l l l l l l l l l l l / / / 1/ 2/% 1

Homebound/ Hospitalized

] / / / / / / / 4 1 % / / / / / / / / /

[ / / / / / / / / / / / / 5 4 % / / / / / / / / / / /

1- 1 Self - contained Program

Learning Disabled

Speech Handicapped

Total Handicapped

Source: Arizona Special Education Census, ASEC 71, 6/ 19/ 78

[ 6/ / / 1

~/////////////////////// 99.7%//////////// 0/./ 3%// 1 ///

1 / / / / / / / / / / / / / / / / / / / 7 7 % / / / / / / / / / / / / / / / / / / / 23% 1

0% 25% 50% 75% 100%

A

Resource Programs served approximately 80% of the t o t a l s p e c i a l

education students for the 1977- 78 school y e a r . In a Resource

Program, students are taken from the regular classroom on a scheduled

b a s i s and provided with s p e c i a l a s s i s t a n c e . This s p e c i a l a s s i s t a n c e

is provided e i t h e r i n small groups or i n d i v i d u a l l y .

Self- contained Programs are provided t o a small percentage o f handi-capped

students. Students p a r t i c i p a t e in these programs because

they cannot be educated s a t i s f a c t o r i l y i n a regular classroom, even

with the use of supplementary aids and s e r v i c e s , due t o the nature

and s e v e r i t y of t h e i r handicaps. Programs provided t o a c h i l d i n h i s

home or i n a h o s p i t a l when the student is unable t o a t t e n d school due

t o i l l n e s s , d i s e a s e , a c c i d e n t , o r other handicapping condition a l s o

f a l l under t h i s category.

I f a school d i s t r i c t cannot provide s a t i s f a c t o r y s p e c i a l education

s e r v i c e s through its own f a c i l i t i e s and personnel, t h e d i s t r i c t may

contract with another public school or an approved p r i v a t e s p e c i a l

education school f o r t h e services.

Table 8 lists the percentage of the school aged population served i n

s p e c i a l education by handicapping category f o r the 1977- 78 school

year.

TABLE 8

Percentage of School Age Children* Served i n

Special Education f o r FY 1977- 78: Arizona vs. National Average

peech Handicapped

e n t a l l y Retarded

motionally Disturbed

* Percentages based upon number of school aged students obtained from the U. S.

Department of Commerce, Bureau of t h e Census ( 541,000 f o r Arizona) I ** Based upon average between the number of s p e c i a l education students i n programs

on October 1, 1977 and February 1, 1978.

Source: Bureau of Education f o r the Handicapped, January 1979

The percentage of students served i n Arizona d i f f e r s from t h e percent

served n a t i o n a l l y by about one t h i r d of one percent ( 0.35%). However,

d i f f e r e n c e s do e x i s t by handicapping c o n d i t i o n w i t h Arizona being above

the n a t i o n a l percentage f o r l e a r n i n g d i s a b l e d and emotionally handi-capped

and below t h e n a t i o n a l l e v e l f o r speech handicapped, mentally '

retarded, homebound/ hospitalized, physically handicapped, and v i s u a l l y

handicapped.

The highest percentage of the school population served i n s p e c i a l

education, f o r school d i s t r i c t s with 500 or more t o t a l students, was

14.90% f o r the 1977- 78 school y e a r . Of the 232 school d i s t r i c t s i n the

s t a t e , 43 d i s t r i c t s had s p e c i a l education populations which exceeded

11%. However, 27 of these school d i s t r i c t s had 500 or less t o t a l

students. Table 9 lists those d i s t r i c t s which served more than 11% of

t h e i r students i n s p e c i a l education f o r FY 1977- 78 and which had more

than 500 students.

TABLE 9

Arizona School D i s t r i c t s which Exceeded the 11% Special

Education Funding Limit f o r FY 1977- 78 School Year

Bullhead City Elementary

Florence Unified

Sacaton Elementary

Creighton Elementary

Avondale Elementary

Superior Elementary

Lake Havasu Elementary

Camp Verde Unified

Bagdad Unif ied

Liberty Elementary

Phoenix Elementary

Casa Grande Elementary

Eloy Elementary

Laveen Elementary

Wilson Elementary

f . Fundinp of Special Education

For the 1971- 72 through the 1973- 74 school years, s t a t e aid f o r t h e

handicapped was d i s t r i b u t e d on a f l a t grant b a s i s . For the 1974- 75

school year, the L e g i s l a t u r e began a funding program which covered

90% of a school d i s t r i c t ' s a d d i t i o n a l cost ( excess cost) f o r the

operation of a s p e c i a l education program. This funding formula was

only i n e f f e c t f o r the 1974- 75 school y e a r . The 90% Excess Cost

Formula was replaced by an e q u a l i z a t i o n formula s i m i l a r t o the

General Maintenance and Operation Formula, beginning with the 1975- 76

school year. This formula remained u n t i l the 1977- 78 school y e a r .

Beginning with the 1977- 78 school year, a new weighted funding

formula was e s t a b l i s h e d .

The Current Weighted Funding Formula: Special education programs

f o r the handicapped a r e c u r r e n t l y funded using a weighted funding

formula. Under t h i s formula, handicapping conditions a r e placed i n t o

t h r e e d i f f e r e n t categories, o r weighted groups, representing the

appropriate excess costs involved i n educating each type of student.

The excess cost amounts a r e the same f o r students whether they are i n

elementary or high school. Special education s t u d e n t s r e c e i v e the

monies apportioned under t h i s method in addition t o t h e i r basic

education entitlements. Therefore, the t o t a l support l e v e l for a

handicapped student i s the Basic Support Level and the excess c o s t

support l e v e l combined. Table 10 shows the handicapping c o n d i t i o n s ,

weighted excess cost l e v e l s , and t o t a l support l e v e l for each cate-gory,

for the 1978- 79 school y e a r .

TABLE 10

Weighted Excess Cost Level and Total Support Level

for Handicapped Students for the 1978- 79 School Year

I * Excess c o s t l e v e l is i d e n t i c a l f o r elementary and high school s t u d e n t s .

To compute s t a t e a i d , a school d i s t r i c t m u l t i p l i e s the number of

s t u d e n t s w i t h i n each category by t h e a p p r o p r i a t e excess c o s t f i g u r e .

A portion of t h i s excess cost amount i s r a i s e d by l o c a l funds through

a q u a l i f y i n g tax r a t e s i m i l a r to the funding mechanism for s t a t e

basic aid. For the 1978- 79 school year, the q u a l i f y i n g tax r a t e for

s p e c i a l education i s $ 0.1998 per $ 100 of a s s e s s e d v a l u a t i o n . This

q u a l i f y i n g tax r a t e may vary from year to year depending on the l e v e l

of the s t a t e appropriation. By s t a t u t e , a t o t a l allowable excess

cost has been e s t a b l i s h e d for a l l school d i s t r i c t s . For example,

for the 1978- 79 school year the t o t a l allowable excess cost was

$ 49,575,240 and the s t a t e apropriated $ 25,200,000. The l i m i t s for

p r i o r years were: 1975- 76, $ 30,000,000; 1976- 77, $ 39,600,000; and

1977- 78, $ 46,332,000. If the excess cost for a l l school d i s t r i c t s in

the s t a t e exceeds the s t a t u t o r i l y e s t a b l i s h e d l i m i t , each d i s t r i c t ' s

computed excess cost is p r o p o r t i o n a l l y reduced. To fund the d i f f e r -

ence between the two amount ($ 24,375,240 FY 1978- 79) a q u a l i f y i n g t a x

r a t e was determined by dividing the $ 24,375,240 by the assessed

valuation t o a l l d i s t r i c t s providing s p e c i a l education programs. If

the amount of s t a t e aid appropriated changes, so does the q u a l i f y i n g

t a x r a t e change. This provision i s a major d i f f e r e n c e from the

funding mechanism, where the q u a l i f y i n g tax r a t e is s e t a t $ 1.30 f o r

s t a t e basic a i d .

Two s e t s of l i m i t s e x i s t i n the excess cost aid formula. F i r s t , a

school d i s t r i c t may only count up t o 11% of t h e i r t o t a l school

population for s p e c i a l education excess cost aid. Secondly, the

t o t a l excess cost in the s t a t e may not exceed $ 49,575,240 for the

1978- 79 school year. School d i s t r i c t s with 500 o r l e s s students i n

the regular program are exempt from the 11% l i m i t .

Adjustment for Small School D i s t r i c t s : Small d i s t r i c t s with small

enrollments find t h e c o s t of educating handicapped c h i l d r e n higher.

This is due t o f a c t o r s such as lower pupil- teacher r a t i o s . To cover

these higher c o s t s , school d i s t r i c t s with a t o t a l enrollment in t h e

regular program of 101 t o 500 students can increase t h e i r allowable

excess cost for s p e c i a l education by 15% and school d i s t r i c t s with a

t o t a l enrollment of 100 o r l e s s can increase such excess cost by 30%.

S t a t e Aid and Special Education Expenditures: Local d i s t r i c t expen-d

i t u r e s and s t a t e aid f o r s p e c i a l education has increased dramat-i

c a l l y i n r e c e n t y e a r s . Table 11 presents t h e r e l a t i o n s h i p of t o t a l

s p e c i a l education expenditures to s t a t e aid from 1974- 75 t o 1978- 79.

TABLE 11

Comparison of Expenditures for Special Education and

Special Education S t a t e Aid for FY 1974- 75 through FY 1978- 79

Millions of Dollars School Year

- Key - - - T Soptaelc iSapl eEcdiualc aEtidounc aEtixocne sEs xCpoesntd iStut aretse Aid . . . Local E f f o r t

* Gifted expenditures a r e a l s o indicated in t h i s t o t a l .

** Estimate for FY 1978- 79 based upon p r i o r years expenditure p a t t e r n s .

g. Special Education Budget Limit

Beginning with the 1977- 78 school year s p e c i a l education expenditures

were placed under a budget l i m i t . Under t h i s budget l i m i t expen-d

i t u r e s f o r s p e c i a l education a r e allowed t o increase by 7% p e r p u p i l

p e r y e a r . For example, a school d i s t r i c t with 100 handicapped

students, and a per pupil expenditure l e v e l of $ 1000 f o r the 1976- 77

school year, was allowed t o increase the per pupil amount by $ 70 ( 7%)

f o r the 1977- 78 school year. Assuming t h a t the d i s t r i c t would a l s o

have 100 students i n the 1977- 78 school year expenditures i n the dis-t

r i c t would increase from $ 100,000 ($ 1,000 X 100) f o r N 1976- 77 t o

$ 107,000 ($ 1,070 X 100) f o r N 1977- 78. The l i m i t is a l s o effected

by changes i n the number of s p e c i a l education students with l e s s stu-dents

meaning a decrease i n capacity and a d d i t i o n a l s p e c i a l education

students causing an increase i n capacity. However, the maximum num-ber

of handicapped students t h a t can be counted f o r budget capacity

is 11% of the school d i s t r i c t ' s t o t a l ADM. A school d i s t r i c t with

1,000 students could have up t o 110 students count f o r budget capac-i

t y purposes.

The s p e c i a l education budget l i m i t has some major d i f f e r e n c e s from

the budget l i m i t f o r regular education. In s p e c i a l education each

school d i s t r i c t e s t a b l i s h e d a l i m i t based upon the s p e c i a l education

budget adopted f o r the 1976- 77 school year. Each d i s t r i c t ' s budget

has increased by 7% on a per pupil b a s i s since t h a t time. Examples

of what has happened i n t h r e e school d i s t r i c t s follows:

TABLE 12

Changes i n the Special Education Budget Limit f o r Three

Selected School D i s t r i c t s Based Upon t h e Existing

Budget Linit Procedure f o r Special Education

This system, i n c o n t r a s t t o the system f o r r e g u l a r education, has no

provisions t o r e s t r a i n high expenditure school d i s t r i c t s or t o provide

any type of r e l i e f f o r those school d i s t r i c t s which were very low

spending when t h e budget l i m i t became e f f e c t i v e . I n a d d i t i o n ,

students are counted f o r budget capacity purposes on an unweighted

b a s i s . For example, a d i s t r i c t adding one speech handicapped student

would gain the same increase i n capacity as a school d i s t r i c t adding

a multiple handicapped student.

School d i s t r i c t s with less than 500 students i n the regular education + Z

program a r e exempt from t h e budget l i m i t .

3. OTHER STATE EDUCATION PROGRAMS

a. Special English Training

In 1969, l e g i s l a t i o n was passed which provided for Special English

c l a s s e s i n kindergarten through grade t h r e e . The a l l o c a t i o n of

funds for t h i s program was $ 25 per ADM. For the f i r s t year o f the

program, the L e g i s l a t u r e a l l o c a t e d $ 100,000. P a r t i c i p a t i o n under

t h i s s t a t u t e was limited t o one year p e r p u p i l .

In 1973, l e g i s l a t i o n was passed which increased t h e a l l o c a t i o n of

funds to $ 50 per ADM. This l e g i s l a t i o n a l s o allowed students up

t o four years of p a r t i c i p a t i o n and made grades four through e i g h t

e l i g i b l e for a s s i s t a n c e . Table 13 shows the s t a t e funds expended and

ADM f o r Special English Programs from the 1969- 70 school year through

the 1977- 78 school year.

b. Gifted

In 1971, l e g i s l a t i o n was passed providing s t a t e support of educa-t

i o n a l programs for t h e g i f t e d . The s t a t e reimburses public school

d i s t r i c t s a t a r a t e of $ 50 for each i d e n t i f i e d c h i l d enrolled i n an

approved program f o r g i f t e d o r t a l e n t e d students. The l e v e l of s t a t e

support per pupil has remained constant.

To be e l i g i b l e for placement in a g i f t e d program the student s h a l l

demonstrate achievement and/ or p o t e n t i a l a b i l i t y i n one or more of the

following areas:

( 1) Creative or productive performance;

( 2) Specific academic a p t i t u d e -- 95 p e r c e n t i l e or above on standard-ized

achievement t e s t i n one or more s u b j e c t a r e a s ; or

( 3) General i n t e l l e c t u a l a b i l i t y -- I. Q. 130 or above, based on an

individualized t e s t i n g program.

No more than three percent of a school d i s t r i c t ' s student population

may be counted f o r g i f t e d s t a t e aid.

During the 1972- 73 school year, only f o u r school d i s t r i c t s p a r t i c -

ipated i n the s t a t e supported g i f t e d program. For the 1978- 79 school

year, the number of p a r t i c i p a t i n g school d i s t r i c t s has increased t o

71. The number of students in s t a t e supported g i f t e d programs grew

from 590 students in 1972- 73 t o almost 10,000 students i n 1977- 78.

Table 14 shows the s t a t e funds expended and the number of c h i l d r e n

served in g i f t e d programs since 1972- 73.

TABLE 13

State Funds Expended for Special English Training Programs

From FY 1969- 70 through FY 1977- 78

State Funds

$ 878,386

$ 832,827 17,567

$ 791,351 ,

$ 253,598

5,072

ADM

$ 100,000 $ 100,000

2,000

ADM

$ 96,172

4A'D23M4 1 3,846

I ADM

$ 62,616

2,504

ADM

TABLE 14

S t a t e Funds Expended f o r G i f t e d Programs from

N 1972- 73 through FY 1977- 78

S t a t e Funds

, $ 499 100 $ 450,000 , 9,000 Students

Students

Students

Source: S p e c i a l Education Services - G i f t e d Programs, Arizona Department of

Education, F a l l 1978

4. SPECIAL PROJECTS

This s e c t i o n provides a b r i e f d e s c r i p t i o n of both state and f e d e r a l programs f o r

which the funding l e v e l exceeded one m i l l i o n d o l l a r s i n FY 1977- 78. P r i o r t o

d e s c r i b i n g t h e s e programs, f e d e r a l mandates w i l l be b r i e f l y d i s c u s s e d . Table 15

i n d i c a t e s f e d e r a l mandates t h a t a f f e c t a l l s t u d e n t s b u t which provide no f e d e r a l

funding .

TABLE 15

Federal Mandates and Court Decisions t h a t Affect

A l l Students and Provide No Federal Funding

T i t l e IX of the Education To ensure nondiscrimination on the b a s i s of sex i n

Amendments Act 1972 educational programs and a c t i v i t i e s . Each agency

must appoint a T i t l e I X o f f i c e r and conduct a s e l f -

evaluation.

P. L. 94- 482 Vocational Requires s t a t e agencies and l o c a l d i s t r i c t s to e l i -

Amendments of 1976 minate sex bias in educational curriculum, a c t i v i -

t i e s and programs.

Section 503 and 504, The To make a l l school programs and a c t i v i t i e s t o handi-

Vocational R e h a b i l i t a t i o n capped students. Each d i s t r i c t must appoint a 504

Act of 1973 o f f i c e r .

Age Discrimination Act P r o h i b i t s d i s c r i m i n a t i o n on t h e b a s i s of age i n

of 1975 educational programs and a c t i v i t i e s . Each d i s t r i c t

must appoint an age d i s c r i m i n a t i o n o f f i c e r .

Fami ly Education Rights Requires every d i s t r i c t to annually inform students

and Privacy Act ( Buckley and patrons of t h e i r r i g h t s t o access to student

Amendment ) records. Buckley f u r t h e r r e q u i r e s grievance pro-cedures

t o be made a v a i l a b l e .

Baker vs. Owen Supreme Court decision t h a t r e q u i r e s a l l d i s t r i c t s

t o o f f e r minimum due process procedures including

due n o t i c e , r i g h t t o speak i n own defence, and

o t h e r s b e f o r e a d m i n i s t e r i n g corporal punishment.

Goss vs. Lopez

Law vs. Nichols

Wollman v s . Walters

Supreme Court decision t h a t r e q u i r e s a l l d i s t r i c t s

t o o f f e r minimum due process procedures to s t u d e n t s .

Supreme Court decision t h a t r e q u i r e s each d i s t r i c t t o

survey a l l students t o determine Home Language and

then prepare i n s t r u c t i o n for students in the

appropriate language.

Supreme Court d e c i s i o n r e q u i r e s a l l schools t o pro-v

i d e e v a l u a t i o n , t e s t i n g , and other forms of a s s i s -

tance to nonpublic schools.

I n a d d i t i o n t o these Federal mandates which d i r e c t l y address school d i s t r i c t s and

s t u d e n t s a t t e n d i n g public schools t h e r e a r e a l s o federal non- educational mandates

t h a t a f f e c t school d i s t r i c t s . These are l i s t e d below i n Table 16.

TABLE 16

Federal Non- Educational Mandates t h a t

Affect School D i s t r i c t s

T i t l e V I and V I I of the To overcome past discriminatory h i r i n g p r a c t i c e s

1964 C i v i l Rights Act by requiring school d i s t r i c t s t o t a k e a f f i r m a t i v e

a c t i o n t o h i r e minority group members.

Occupational Safety and A l l employees are required t o meet Federal s a f e t y

Health Act standards i n employees working environment. Fail-ure

t o meet t h o s e s t a n d a r d s w i l l r e s u l t i n f i n e s .

Office of C i v i l Rights To assess school d i s t r i c t s l e v e l on noncompliance

Data Collection with a l l Federal! mandates.

As mentioned previously t h i s s e c t i o n provides a b r i e f d e s c r i p t i o n of both

s t a t e and f e d e r a l programs f o r which the funding l e v e l exceeded one million

d o l l a r s i n FY 1977- 78. ( Table 17, at the end of t h i s s e c t i o n provides a

comprehensive list of f e d e r a l programs, expenditures, and number of students

served i n FY 1977- 78.) The following terms w i l l be used throughout the s e c t i o n

i n the d e s c r i p t i o n of f e d e r a l s p e c i a l p r o j e c t s :

-- Matching requirement means a school d i s t r i c t o r t h e s t a t e must provide a

c e r t a i n amount of funds t o qualify f o r f e d e r a l funds. The percentage

required f o r matching may vary with the program.

-- Maintenance of e f f o r t means a required l e v e l of funding e i t h e r i n the

aggregate or on a per- pupil b a s i s which a d i s t r i c t must maintain i n order

t o continue t o receive f e d e r a l funds.

-- Coordination with s t a t e / l o c a l f e d e r a l programs means the f e d e r a l regula-t

i o n requires the s t a t e or l o c a l school d i s t r i c t s t o coordinate the fed-eral

program with s t a t e or l o c a l programs i n the same area.

Appendix 1 lists f o r most of the s p e c i a l p r o j e c t s discussed i n t h i s s e c t i o n

the entitlement of each d i s t r i c t i n FY 1977- 78. Three of the s p e c i a l p r o j e c t s

discussed i n t h i s s e c t i o n provide funds t o a small number of d i s t r i c t s and

these d i s t r i c t s a r e l i s t e d i n the a p p r o p r i a t e a r e a .

a. Federal Impact Aid: P. L. 81- 874

Federal Impact Aid, commonly r e f e r r e d t o as 874, provides funds t o school

d i s t r i c t s which have had t h e i r tax bases reduced because of exempted

federally- owned property o r which have had t h e i r school attendances sub-s

t a n t i a l l y increased due t o f e d e r a l a c t i v i t i e s . During FY 1977- 78, school

d i s t r i c t s ' e n t i t l e m e n t s t o 874 monies t o t a l l e d approximately $ 23.6 million.

There a r e no s t a t e or l o c a l funds expended t o receive 874 monies. The

entitlement by d i s t r i c t is l i s t e d i n Appendix 1.

Federal Impact Aid is not t r u l y a s p e c i a l p r o j e c t i n the sense t h a t fund-ing

is not provided f o r a c e r t a i n purpose. Impact Aid can be used by

a school d i s t r i c t in the following budget c a t e g o r i e s : General M& O

( Fund 001) , Special ducat ion ( Fund 002), Transport a t ion ( Fund 0041, and

Budgeted Capital Outlay ( Fund 410). P. L. 81- 874 funds are not considered

when a school d i s t r i c t determines its budget l i m i t based on t h e Budget Cost

Level. The estimated revenues t o be received through 874 are simply

added to the BCL t o determine the d i s t r i c t ' s aggregate budget l i m i t . A

d e s c r i p t i o n of the impact of 874 funds on d i s t r i c t s ' t a x r a t e s and

expenditures i s discussed in Section 111, Analysis of Current School

Finance System: EY 1977- 78.

Although there are numerous conditions under which a d i s t r i c t may be

e l i g i b l e for 874 funding, the following conditions are the main areas

under which school d i s t r i c t s q u a l i f y . For Arizona, e l i g i b i l i t y has been

e s t a b l i s h e d for the second condition l i s t e d .

-- The tax base of the d i s t r i c t has been reduced as the r e s u l t of the

a c q u i s i t i o n of r e a l property by the f e d e r a l government since 1938.

The a c q u i s i t i o n must c o n s t i t u t e 10% or more of the assessed valuation

of the d i s t r i c t a t the time of a c q u i s i t i o n . In a d d i t i o n , the acqui-s

i t i o n must have placed a s u b s t a n t i a l and continuing f i n a n c i a l burden

on the d i s t r i c t .

-- The combined Average Daily Attendance ( ADA) of e l i g i b l e children i s

3% of the t o t a l ADA of the d i s t r i c t , and i s a t l e a s t 10 ADA, o r 400

ADA, which i s the l e a s t . The c r i t e r i a which the parents of a F h i l d

must meet t o make t h e c h i l d e l i g i b l e for funding are:

( 1) working on and l i v l n g on t h e f e d e r a l land

( 2) working on and l i v i n g o f f t h e f e d e r a l land

( 3) working off and l i v i n g off t h e f e d e r a l land

The 3% requirement does not have to be met during the two f i s c a l years

which follow the year i n which the d i s t r i c t met the requirement and

was e n t i t l e d to payment. However, any payment to a d i s t r i c t which no

longer meets t h i s requirement cannot exceed 50% of the entitlement

during the year i n which the d i s t r i c t was q u a l i f i e d .

-- The d i s t r i c t ' s ADA of e l i g i b l e children i s l e s s than 90% of the pre-ceding

year and t h e r e has been a c e s s a t i o n of f e d e r a l a c t i v i t i e s within

the d i s t r i c t ; provided t h a t the decrease in ADA o r c e s s a t i o n of f e d e r a l

a c t i v i t y r e s u l t e d i n a decrease of e l i g i b l e ADA t o 3% o r more of t h e

t o t a l current y e a r ' s ADA and is a t l e a s t 10 ADA. The amount of the

d i s t r i c t ' s entitlement f o r t h e f i s c a l year and for t h e 3 succeeding

f i s c a l years w i l l not be l e s s than 90% of the d i s t r i c t ' s entitlement

f o r t h e preceding year.

I n a d d i t i o n school d i s t r i c t s may be e l i g i b l e for a d d i t i o n a l a s s i s t a n c e .

Arizona school d i s t r i c t s c u r r e n t l y a r e e l i g i b l e under the condition l i s t e d

below. Although t h e r e a r e s e v e r a l o t h e r conditions under which a d d i t i o n a l

funding can be received, school d i s t r i c t s i n Arizona are not c u r r e n t l y

e l i g i b l e .

-- D i s t r i c t s which provide programs designed t o meet the s p e c i a l educa-t

i o n a l and r e l a t e d needs of handicapped students and whose parents

a r e on a c t i v e duty i n the uniformed services may claim such children

f o r 150% of the entitlement f o r e l i g i b l e children.

The r u l e s and r e g u l a t i o n s promulgated t o implement 874, provide a mechanism

whereby s t a t e funds can be supplanted by f e d e r a l 874 funds. Basically the

mechanism operates as follows: ( 1) rank school d i s t r i c t expenditures a f t e r

grouping by grade l e v e l served, ( 2) determine the expenditure l e v e l a t the

5th and 95th p e r c e n t i l e of the t o t a l ADM and ( 3) i f the percentage d i f f e r -

ence at the two p e r c e n t i l e l e v e l s is 25% or less expenditures are deemed

t o have been equalized. A t t h i s point s t a t e funds can be supplanted by

f e d e r a l 874 funds.

b. School Construction Assistance i n Federally Impacted Area: P. L. 81- 815

P. L. 81- 815 is s i m i l a r t o 874 i n t h a t it too is not a s p e c i a l p r o j e c t

i n t h e same sense as other f e d e r a l programs. The 815 program provides

a s s i s t a n c e f o r construction of school f a c i l i t i e s i n school d i s t r i c t s

where s u b s t a n t i a l increases i n school membership are a r e s u l t of f e d e r a l

a c t i v i t y o r where reconstruction of f a c i l i t i e s is necessary because of a

n a t u r a l d i s a s t e r . Also l i k e 874, no state or l o c a l monies need t o be

expended i n order t o receive 815 funding.

During the last four years, school d i s t r i c t s i n Arizona have received the

following appropriations f o r the 815 program:

However, beginning with FY 1977- 78, Arizona was a l l o c a t e d through the BIA,

approximately $ 12 m i l l i o n t o be received by two school d i s t r i c t s . Although

no funds were received i n FY 1977- 78, the two school d i s t r i c t s w i l l receive

the funds over the following 3 t o 4 year period. The two d i s t r i c t s are

Parker Elementary ( which has received approximately $ 298,000 t o date during

FY 1978- 79 and Alchesay Unified).

Like the 874 program, t h e r e a r e numerous e l i g i b i l i t y c r i t e r i a which a dis-t

r i c t can m e e t i n order t o qualify f o r 815 funding. The purposes of the

5 c a t e g o r i e s of f e d e r a l impact recognized by the a c t a r e as follows:

-- f o r increases i n numbers of children who r e s i d e on f e d e r a l property

s i t u a t e d i n whole or i n p a r t i n the same s t a t e as a school d i s t r i c t

o r w i t h i n reasonable commuting distance of the d i s t r i c t .

-- f o r increases i n numbers of children who r e s i d e with a parent employed

on f e d e r a l property s i t u a t e d i n whole or i n p a r t i n the same s t a t e as

a school d i s t r i c t o r w i t h i n reasonable commuting d i s t a n c e of the dis-t

r i c t , or have a parent on a c t i v e duty i n the uniformed s e r v i c e s .

-- for increased in number of children whose membership r e s u l t s from

a c t i v i t i e s of the United S t a t e s c a r r i e d on e i t h e r d i r e c t l y or through

a contractor .

-- for membership residing on Indian lands and which has not formed or

w i l l not form the b a s i s f o r payment under other provisions of the Act.

-- for inadequately housed children in f i n a n c i a l l y d i s t r e s s e d school dis-t

r i c t s where federal property c o n s t i t u t e s a substantial part of the

school d i s t r i c t .

The only school d i s t r i c t s in Arizona which currently qualify for 815 funding

qualify under the category concerning schools on Indian lands. To qualify

the d i s t r i c t s have met - a l l of the following conditions:

-- the estimated number of children who w i l l reside on the Indian lands

as of the close of the increase period for which application i s f i l e d ,

has not and w i l l not form t h e b a s i s f o r payment under other provisions

of the act and ( a) the t o t a l number of such children i s at least 15 and

w i l l comprise a t l e a s t 1/ 3 of the t o t a l number of children in the dis-t

r i c t or ( b) the Indian land on which the children reside is a t l e a s t

113 of the t o t a l area of the school d i s t r i c t or ( 3 ) the applicant

d i s t r i c t i s providing a free public education for at l e a s t 100 children

who reside on Indian lands outside s f the applicant school d i s t r i c t .

-- the immunity of such lands from taxation has created a s u b s t a n t i a l and

continuing impairment of the d i s t r i c t ' s a b i l i t y to finance needed

school f a c i l i t i e s ( t h i s i s waived when the d i s t r i c t i s educating 100

children who reside on Indian land outside the d i s t r i c t ) .

-- the applicant school d i s t r i c t i. s making a reasonable tax e f f o r t and i s

exercising due diligence in availing i t s e l f of s t a t e and other financial

assistance a v a i l a b l e f o r i t s purpose.

-- the applicant d i s t r i c t does not have s u f f i c i e n t funds from a l l other

sources to provide the needed minimum f a c i l i t y for a t l e a s t 95% of

the t o t a l membership estimated as of the second year following the

period for which application i s f i l e d .

Although many of the school d i s t r i c t s which are located e n t i r e l y on Indian

lands are e l i g i b l e for 815 funding, the actual appropriation for t h i s

program can best be described as sporadic over the l a s t several years.

D i s t r i c t s have had applications for 815 funds approved, but the appropri-a

t i o n l e v e l for the program has not been s u f f i c i e n t to meet the needs.

c . ( l ) T i t l e I- Educationally Deprived: P. L. 89- 10

The purpose of the funding under t h i s t i t l e i s to improve the i n s t r u c t i o n a l

programs to meet the needs of educationally disadvantaged students in low

income areas. Educationally deprived r e f e r s to those children who have

need f o r s p e c i a l educational assistance in order that t h e i r level of

educational attainment may be raised to that appropriate for children

t h e i r age.

Low income, as used i n determining T i t l e I fund a l l o c a t i o n , r e f e r s t o the

federal government's o f f i c i a l s t a t i s t i c a l measure of poverty as used i n

compiling the 1970 decennial census. This measure, known as the Orshensky

Index, d e f i n e s poverty l e v e l s according to family s i z e , number of c h i l -

dren, age and sex of head of household and whether the residence i s farm

or nonfarm. Census counts of children ages 5 through 17 from " poor"

f a m i l i e s as defined by t h i s poverty matrix are used as t h e primary b a s i s

for computing T i t l e I funds a l l o c a t i o n .

For FY 1977- 78, Arizona was a l l o c a t e d $ 17,686,137 under T i t l e I- Education-a

l l y Deprived. Each d i s t r i c t ' s entitlement is presented i n Appendix 1.

Matching Requirement -- There i s no matching requirement for T i t l e I-Educationally

Deprived, which means t h a t no s t a t e of l o c a l funds need to be

s p e c i f i c a l l y expended i n order to receive T i t l e I monies.

Maintenance of E f f o r t -- Section 126( a) of P. L. 95- 561 r e q u i r e s T i t l e I

p a r t i c i p a t i n g school d i s t r i c t s t o maintain the same l e v e l of expenditures

from s t a t e and l o c a l sources f o r t h e provision of free public education in

each of the two years immediately preceding t h e year f o r which a p p l i c a t i o n

for T i t l e I funds is made. Arizona a c t u a l l y checks for compliance between

the 3rd and 2nd years preceding the grant year because d a t a f o r the 1st

preceding year is not a v a i l a b l e a t the time T i t l e I a p p l i c a t i o n s a r e

submitted.

Expenditures d a t a used for checking compliance i n t h i s area i s from the

d i s t r i c t ' s General Operating Fund, Special Education Fund and Transpor-t

a t i o n Fund, exclusive of expenditures for c a p i t a l o u t l a y but including

c o s t s of textbook purchases. School d i s t r i c t s can meet t h i s requirement

on a per- pupil b a s i s or on t h e b a s i s of expenditures i n t o t a l .

Coordination with State/ Locally Funded Programs -- T i t l e I- Educationally

Deprived does not r e q u i r e coordination with other programs.

( 2 ) T i t l e I- Migrant

The purpose of the T i t l e I- Migrant program is t o provide i n s t r u c t i o n a l ,

h e a l t h and n u t r i t i o n a l s e r v i c e s t o children of migratory a g r i c u l t u r a l

workers and o f migratory fishermen. Services may be provided to a c h i l d

under the Migrant Child Education program only a f t e r the l o c a l school

d i s t r i c t has determined t h a t the c h i l d i s e i t h e r a c u r r e n t l y or formerly

migratory c h i l d as defined below.

Currently migratory c h i l d means a c h i l d : ( a ) whose parent or guardian i s

a migratory a g r i c u l t u r a l worker or a migratory f i s h e r ; and ( b) who has

moved within the past twelve months from one school d i s t r i c t to another or

i n a s t a t e t h a t i s comprised of a s i n g l e school d i s t r i c t , has moved from

one school a d m i n i s t r a t i v e a r e a to another to enable the c h i l d , the c h i l d ' s

guardian, o r a member of the c h i l d ' s immediate family to obtain temporary

or season employment in an a g r i c u l t u r a l o r f i s h i n g a c t i v i t y . This d e f i -

n i t i o n includes a c h i l d who has been e l i g i b l e t o be served under t h e

requirements in the preceding sentence, and who, without the parent or

guardian, has continued to migrate annually t o enable him or her t o secure

temporary or seasonal employment in an a g r i c u l t u r a l o r f i s h i n g a c t i v i t y .

An " a g r i c u l t u r a l a c t i v i t y " means ( a) any a c t i v i t y d i r e c t l y r e l a t e d t o the

production or processing of crops, d a i r y products, poultry or l i v e s t o c k

for i n i t i a l commercial s a l e or as a p r i n c i p a l means o f personal subsis-tence;

( b) any a c t i v i t y d i r e c t l y r e l a t e d t o t h e c u l t i v a t i o n o r harvesting

of t r e e s ; or ( c ) any a c t i v i t y d i r e c t l y r e l a t e d to f i s h farms.

" Fishing a c t i v i t y " means any a c t i v i t y d i r e c t l y r e l a t e d t o t h e catching or

processing of f i s h or s h e l l f i s h for i n i t i a l commercial s a l e o r a s p r i n c i p a l

means of personal subsistence.

" Formerly migratory child" means a c h i l d who: ( a ) was e l i g i b l e t o be

counted and served as a c u r r e n t l y migratory c h i l d within the past f i v e

y e a r s , b u t i s not now a c u r r e n t l y migratory c h i l d ; ( b) l i v e s in an area

served by T i t l e I- Migrant education p r o j e c t ; and ( c) has the concurrence

of h i s or her parent or guardian to continue t o be considered a migra-t

o r y c h i l d .

There is a t o t a l of s i x years of program e l i g i b i l i t y , a one- year s t a t u s

as a " currently migratory child" and up to f i v e a d d i t i o n a l years as

a " formerly migratory c h i l d " .

For the school year 1977- 78 Arizona's a l l o c a t i o n of T i t l e I- Migrant

funds t o t a l l e d $ 3,010,360, of which $ 2,680,750 went to school d i s t r i c t s .

Thirty seven elementary and secondary school p a r t i c i p a t e d i n the program as

well a s one u n i v e r s i t y . Approximately 10,000 students counted for funding

purposes.

Matching Requirement -- There i s no matching requirement for T i t l e I-Migrant.

Maintenance of Effort -- The r e g u l a t i o n s r e q u i r e t h a t each d i s t r i c t make

a v a i l a b l e to each migrant c h i l d a l l f e d e r a l l y , s t a t e and l o c a l l y funded

programs offered in the d i s t r i c t . Migrant funds supplement o t h e r f e d e r a l ,

s t a t e and l o c a l l y funded programs i n which migrant children p a r t i c i p a t e .

Coordination with State/ Locally Funded Programs -- T i t l e I- Migrant r e q u i r e s

c o o r d i n a t i o n w i t h sta t e / l o c ~ l l yf unded programs.

1 Vocational Education: - P -. L. 94- 482

The federal vocational education program provides funds ($ 6,684,043 i n

FY 1977- 78 of which $ 1,237,017 went to school d i s t r i c t s ) t o a s s i s t d i s t r i c t s

i n updating and expanding e x i s t i n g vocational education programs or t o

provide a s s i s t a n c e when l o c a l funds are inadequate to maintain the e x i s t i n g

v o c a t i o n a l e d u c a t i o n a l program.

To q u a l i f y f o r funds, the s t a t e must have a " State Board of Vocational

Education" t o a c t as t h e r e p r e s e n t a t i v e of the s t a t e and t o be s o l e l y

responsible for the a d m i n i s t r a t i o n of the v o c a t i o n a l e d u c a t i o n program.

In Arizona, the S t a t e Board of Education functions in t h i s capacity.

Matching Requirements -- S t a t e and l o c a l funds together must be equal t o

the federal a- p- p ro- p riation. The t o t a l s t a t e funds expended t o receive federal

vocational education d o l l a r s were approximately $ 3.7 m i l l i o n . Local funds

provided the remainder.

Maintenance of E f f o r t -- The law r e q u i r e s t h a t each d i s t r i c t maintain a

l e v e l of funding i n t o t a l d o l l a r s equal t o , or not l e s s than 5% l e s s , than

t h e i r previous y e a r ' s funding l e v e l .

Coordination with State/ Locally Funded Programs -- The f e d e r a l r e g u l a t i o n s

r e q u i r e coordination with s t a t e , l o c a l l y and o t h e r f e d e r a l l y funded pro-grams

such as CETA.

( 2) Vocational Education: S t a t e

The s t a t e vocational education program designates courses in a g r i c u l t u r e ,

mining, manual t r a i n i n g , domestic science and other vocational p r o j e c t s

for students. For FY 1977- 78 the s t a t e appropriated $ 3,704,000 for voca-t

i o n a l education. Of t h i s amount, school d i s t r i c t s received approximately

$ 1,575,000. The remaining s t a t e funds were used ( among other things) f o r

area vocational c e n t e r s , adult vocational education, cooperative education,

v o c a t i o n a l r e s e a r c h and teacher t r a i n i n g . In a d d i t i o n , $ 593,300 was

appropriated to t h e S t a t e Department of Education for administration of

vocational education.

S t a t e money is combined with federal a s s i s t a n c e money and is a l l o c a t e d on a

competet ive b a s i s .

e. Comprehensive Employment and Training ( CETA): P. L. 93- 203

The CETA program seeks q u a l i f i e d a p p l i c a n t s from minority groups and

a s s i s t s them i n entering apprenticeship programs. It promotes the

development of apprenticeship programs in cooperation with i n d u s t r i e s i n

the r e s p e c t i v e s k i l l e d c r a f t s or t r a d e s . Approximately 4,500 students

were served by CETA programs in FY 1977- 78. The expenditure for the CETA

program for the year was $ 2,462,641. ( This does not include CETA c o n t r a c t o r s

or administration.)

Matching Requirements -- There i s no requirement for school d i s t r i c t s to

match federal funds i n order t o o b t a i n these funds.

Maintenance of E f f o r t -- There is no maintenance of e f f o r t for school

d i s t r i c t , because tK< re i s no d i s t r i c t money going i n t o the maintenance of

the CETA programs. There may be a l i t t l e money, however, going i n t o the

a d m i n i s t r a t i v e c o s t of having CETA employees.

Coordination with State/ Locally Funded Programs -- Such coordination is

n o t r e q u i r e d by t h e f e d e r a l r e g u l a t i o n s , but it s t a t e s t h a t coordination

ought t o e x i s t .

Approximately $ 6 m i l l i o n of the CETA money for Arizona i s linked in some

manner with federal or s t a t e Vocational Education programs. In Maricopa

and Pima Counties and the City of Phoenix, the educational s e r v i c e s for

the CETA programs are provided through the local school d i s t r i c t s . By

law, T i t l e 20 ( CETA) r e q u i r e s t h a t 6% o f t h e CETA money must go to the

S t a t e Educational Agency Vocational Education Board to support the prin-c

i p a l sponsor of a CETA- Vocational program.

f . Career Education: S t a t e

The state- funded Career Education program provides students with the

opportunity to be oriented to the world of employment. Orientation i s

provided through classwork, apprenticeships, and on- the- job work experi-ence.

Appropriated funds may be a1 located for:

- Increasing high school c a r e e r education enrollment.

- Making career t e s t i n g and counseling a v a i l a b l e t o each common and high

school pupil.

- Obtaining, preparing, and maintaining reading m a t e r i a l , f i l m s , t a p e s ,

and other equipment for the purpose of giving each c h i l d an o r i e n t a t i o n

t o the world of work through common school c l a s s e s and a v a i l a b i l i t y t o

common and high school pupils.

- Retraining common school teachers and counselors for t h e c a r e e r orien-t

a t i o n of pupils to the world of work.

- Providing for teachers and a curriculum for common school d i s t r i c t s

i n s t i t u t i n g a course in o r i e n t a t i o n to the world of work for grades

7, 8, and 9.

- Providing a d d i t i o n a l teacher- coordinators to implement and coordinate

on- the- job work experience for a d d i t i o n a l ptlpil- trainees and, i f necessary,

provide t r a n s p o r t a t i o n for such pupils.

- Employing persons to c o o r d i n a t e a p p r e n t i c e s h i p - r e l a t e d t r a i n i n g for

r e g i s t e r e d apprenticeship programs.

- Providing each county with the means to conduct workshops for a l l common

and high school d i s t r i c t s within the county.

- S t a t e career a s s i s t a n c e s h a l l a l s o provide for an organized statewide

program of ~ u b l i ci nformat ion and cornmunit y involvement for parents in

t h e m e r i t s of c a r e e r education.

The following i s a l i s t of Career Education funding a l l o c a t i o n s for

FY 1977- 78:

County/ School D i s t r i c t

Apache

Coch i s e

Benson UHS 119

Cocon ino

F l a g s t a f f Unif. // I

Page Unif . 4/ 8

Tuba City Unif. 1/ 15

Fredonia/ Mocassin Unif. H6

Grand Canyon Unif. A4

Gila

Gr ah am

Greenlee

Maricopa

Dysart Unif. 1/ 89

Agua F r i a UHS 11216

Roosevelt Elem. 1/ 66

Mesa Unif. // 4

Phoenix IJHS 11210

Tempe UHS 11213

Glendale UHS 1/ 205

Paradise Valley Unif. 4/ 69

Buckeye UHS # 201

S c o t t s d a l e Unif. 4/ 48

Mohave

Colorado City Elem. 1/ 14

Bullhead City Elem. / I15

Pima

Marana HS 1/ 106

Tucson Unif. 111

Flowing Wells Unif. 118

Amphitheater Unif. 1/ 10

Pinal

Casa Grande UHS 1/ 82

Apache Junction Unif. 1/ 43

Coolidge Unif. 4/ 21

Santa Cruz

Nogales Unif. 411

Patagonia UHS 1/ 20

Yavapai

Yuma

Yuma UHS 1/ 70

Somerton Elem. // I1

Yuma Elem. # 1

Gadsden Elem. 1/ 32

Tot a1

Amount*

~ ounty/ Consortium Amount *

Apache- Nava j o $ 213,357

Career- Bound ( Scottsdale,

Paradise Valley, Cave Creek) 214,571

CETAS ( Tempe Area) 127,352

Central Maricopa 367,365

Coconino 142,531

Cochise 200,978

Mohave 117,720

P ima 623,544

Pinal 117,028

Santa Cruz 69,844

San Tan ( Southeast Maricopa County) 82,574

Tri- County ( Graham, Greenlee, Gila) 160,857

WACOP ( Western Maricopa County) 336,930

Yavapai 95,058

Y uma 113,891

Total

U n i v e r s i t i e s Amount

Northern Arizona University $ 22,855

University of Arizona 33,905

Arizona S t a t e University 65,260

Total $ 122,020

(* All f i g u r e s rounded t o the nearest d o l l a r ) .

In t o t a l i n FY 1977- 78, $ 3.8 million was expended f o r career education

i n grades K- 12 and 389,177 students were served.

( 1 Bil ingual Education: T i t l e V I I of the Elementary and Secondary

Education Act

T i t l e V I I of ESEA a s s i s t s i n meeting the educational needs of children

whose n a t i v e language is other than English. The f e d e r a l a s s i s t a n c e is

limited t o the establishment of new programs or the expansion of e x i s t i n g

programs. P r e s e n t l y , a d i s t r i c t can receive funds under T i t l e V I I f o r a

period of t h r e e years. The goal of T i t l e VII- Bilingual Education funds is

t o provide f i n a n c i a l a s s i s t a n c e t o d i s t r i c t s t o get t h e i r programs estab-l

i s h e d and organized and then have the d i s t r i c t assume the f i n a n c i a l

r e s p o n s i b i l i t y f o r t h e program a f t e r t h e f e d e r a l money is no longer

a v a i l a b l e . It is n o t p o s s i b l e t o determine t h e extent of l o c a l monies, i f

any, which go i n t o the f e d e r a l b i l i n g u a l program.

D i s t r i c t s compete n a t i o n a l l y f o r funding under approximately 500 grants.

The average grant is approximately $ 130,000. In FY 1977- 78, grants were

received by 25 school d i s t r i c t s i n Arizona. There were approximately

12,000 c h i l d r e n served by the $ 3,211,169 a l l o c a t i o n . Of t h i s a l l o c a t e d

amount, $ 2,761,895 went to the school d i s t r i c t s and the remainder went to

students i n p r i v a t e and Indian schools. The f e d e r a l r e g u l a t i o n s t a t e s t h a t

the federal a s s i s t a n c e w i l l not exceed 113 of the p e r p u p i l expenditure of

the d i s t r i c t receiving a s s i s t a n c e . D i s t r i c t s must be taking advantage of

a l l s t a t e funding t h a t is a v a i l a b l e t o the d i s t r i c t .

( 2) Bilingual Education: S t a t e ( Special English Tra-- i ning)

As mentioned in Section 3, Other S t a t e Education Programs, the s t a t e

b i l i n g u a l education program for FY 1977- 78 was funded a t $ 50 per ADM.

Students in grades K- 3 receive p r i o r i t y in funding p r i o r t o those i n

grades 4 through 8. The t o t a l s t a t e appropriation for FY 1977- 78 was

$ 1 m i l l i o n , which a t $ 50 per ADM meant t h a t i n t o approximately 20,000

students would be served. In a c t u a l i t y in FY 1977- 78, $ 878,389 was

a l l o c a t e d t o school d i s t r i c t s .

The program is designed to be supplemental to the f e d e r a l b i l i n g u a l and

regular educational program. D i s t r i c t s may provide t h e program f o r pupils

not t o exceed an accumulated period o f f o u r years per pupil.

B a s i c a l l y , t h e f e d e r a l b i l i n g u a l program o f f e r s i n s t r u c t i o n in the s t u -

dents f i r s t language while the s t a t e program i s designed to a s s i s t stu-dents

i n learning English.

h. Special Education- Handicapped: Education for A l l Handicapped Children

Act, P. L. 94- 142

Federal funding for the education of handicapped students is provided t o

Arizona under t h e provision of P. L. 94- 142. This law s p e c i f i e s a number

of a c t i v i t i e s t h a t schools must engage i n to ensure t h a t handicapped

c h i l d r e n receive a f r e e , a p p r o p r i a t e p u b l i c education. For example, it

r e q u i r e s s p e c i a l i s t s to e v a l u a t e t h e needs of the c h i l d and determine the

most a p p r o p r i a t e e d u c a t i o n a l environment for the c h i l d ; it r e q u i r e s t h a t

an i n d i v i d u a l i z e d educational program be developed for each c h i l d i d e n t i -

f i e d a s needing s p e c i a l education or r e l a t e d s e r v i c e s ; i t r e q u i r e s schools

to n o t i f y p a r e n t s , to include them i n the decision- making process and io

provide them with an opportunity for a hearing i f they are d i s s a t i s f i e d

with the decision. Currently, s t a t e law and r e g u l a t i o n s for educating

handicapped children are almost i d e n t i c a l with P. L. 94- 142.

The l e v e l of funding under P. L. 94- 142 has increased dramatically. For

example, i n FY 1977- 78, Arizona's a l l o c a t i o n was $ 2.5 m i l l i o n , of which

$ 1.8 m i l l i o n was d i s t r i b u t e d to school d i s t r i c t s during the f i s c a l year,

and the estimated a l l o c a t i o n for FY 1979- 80 i s in excess of $ 9 m i l l i o n .

The s t a t e funds expended in FY 1977- 78 for s p e c i a l education t o t a l l e d $ 24.6

m i l l i o n and l o c a l funds t o t a l l e d $ 35.1 m i l l i o n .

Matching Reauirement

Currently, no matching requirement e x i s t s under P. L. 94- 142. However,

funds under t h i s program can only be used for the excess cost of s p e c i a l

education programs. To meet t h i s requirement, a school d i s t r i c t must

spend as much on a handicapped c h i l d as i s spent on a non- handicapped

c h i l d before using P. L. 94- 142 funds.

Maintenance of E f f o r t

Under P. L. 94- 142, a school d i s t r i c t must maintain its l e v e l of expendi-tures

from s t a t e and l o c a l sources. Also, a school d i s t r i c t may not use

P. L. 94- 142 funds to replace a cost t h a t was previously met with s t a t e and

l o c a l funds. However, a provision e x i s t s i n P. L. 94- 142 t h a t allows a

s t a t e t o waive the supplementing requirement of P. L. 94- 142. In order t o

be approved f o r a waiver, a s t a t e must provide c l e a r and convincing evi-dence

t h a t a l l handicapped children have a v a i l a b l e to them a f r e e appro-p

r i a t e education. Currently, only Massachusetts h a s a p p l i e d f o r t h i s

waiver and t h e i r request was denied by the United S t a t e s Office of Education.

I'

i. Indian Education Act: T i t l e I V , P. L. 92- 318

Indian Education, T i t l e I V , provides support to school d i s t r i c t s t o a s s i s t

them i n developing and e s t a b l i s h i n g educational s e r v i c e s and programs

s p e c i f i c a l l y designed t o improve educational o p p o r t u n i t i e s f o r Indian

children.

Grants may be used f o r remedial or compensatory i n s t r u c t i o n , counseling,

t e s t i n g s e r v i c e s , s p e c i a l education and pre- school programs.

Grants may a l s o be authorized t o i n s t i t u t i o n s of higher education t o pre-pare

persons t o serve Indian children as teachers, a i d e s , s o c i a l workers

and a n c i l l a r y educational personnel.

School d i s t r i c t s apply d i r e c t l y t a HEW f o r a s s i s t a n c e . Allocation is

based on the need of those I n d i a n s t u d e n t s . To be counted as an Indian

student, t h a t person must be a member of a recognized t r i b e or a decendent

of people who were enrolled members of a t r i b e . In order t o b e a n enrolled

member, the person must prove t h a t he or she is 114 or more degree Indian

blood. In FY 1977- 78, T i t l e I V provided $ 3,137,227 i n funds which served

29,950 students.

Matching Requirement -- There is no matching requirement i n the Indian

Education Act.

Maintenance of E f f o r t -- The Indian Education Act requires d i s t r i c t s to

maintain the same l e v e l of funding as they had i n the previous y e a r .

Federal funds may not be used t o supplant s t a t e or l o c a l funds.

Coordination with State/ Locally Funded Program -- The Indian Education Act

does not r e q u i r e coordination with s t a t e / l o c a l l y funded programs.

j. Johnson- O'Malley Educational Assistance: P. L. 93- 638

Johnson- O'Malley, commonly r e f e r r e d t o as JOM, assists i n upgrading Indian

education by assuring adequate educational o p p o r t u n i t i e s f o r Indian c h i l -

dren attending public or t r i b a l schools. In FY 1977- 78, Arizona received

$ 543,677 i n supplemental JOM funds which served 6,800 students i n 27 school

d i s t r i c t s . These supplemental funds by d i s t r i c t a r e shown i n Appendix 1.

In addition $ 473,042 i n supplement~ l JOM was received f o r s e v e r a l p r o j e c t s

which served 2,360 students. The p r o j e c t s and number of e l i g i b i e JOM

students a r e l i s t e d below.

Project JOM Funding E l i g i b l e JOM Students

Ak- Chin Indian Community

Ft. McDowell

GRIC - Blackwater

GRIC - Casa Grande H . S .

GRIC - Coolidge Unif. S. D. ! I21

GRIC - Gila Crossing

CRIG - Carl Hayden H . S .

Hopi Tribe

Hopi Tribe ( H. B. C.)

Hualapai Tribe

San Lucy D i s t r i c t

San Xavier

Yavapai- Apache Camp Verde

Yavapai- Prescott

Yavapai- Tonto Apache Payson

Subtotal $ 333,089.50 1,760

Central Child Dev. Center

F l a g s t a f f Indian Center

Kee N'Bah

Phoenix Indian Center

Tucson Indian Center

Subtotal $ 139,9- 5- 2 .07 - 603

TOTAL

Operational money ( or basic JOM, as it is r e f e r r e d t o ) may be expended only

on I n d i a n s t u d e n t s and only a f t e r a l l s t a t e and l o c a l funds f o r the p a r t i c -

u l a r program a r e expended. Funds under t h i s p a r t may only be expended i n

those areas of the budget which a r e included i n the c a l c u l a t i o n of per

p u p i l c o s t s . Basic JOM funds began t o be phased out over a 3- year period

beginning with FY 1975- 76, although some d i s t r i c t s received a waiver during

t h i s t i m e period t o continue t o use JOM funds as b a s i c