NCPA - National Center for Policy Analysis


April 13, 2009

Like most states, Arizona finances its public schools through the application of complex formulas, some of which depend on enrollment and some of which rely upon categories of spending.  One result of this many-layered approach is an inability to easily determine how much money is tied to a single student in a single district or how school and district balance sheets are affected as students move around the state.  In times like these, when education dollars are increasingly scarce, it is imperative that parents, educators, and policymakers understand what we are paying for and getting in return, says Susan Aud, a senior fellow with the Goldwater Institute.

An analysis of Arizona's education funding formulas shows many areas that need improvement:

  • Arizona school districts received an average of $9,563 in total revenue per pupil during the 2006-07 school year; that sum is drawn from numerous sources and formulas.
  • On average, $6,000 per student of education funding comes from the state and follows the student in the move to a new district; the state could give parents discretion over $5,000 in state funding with minimal impact to the state budget.
  • Per-student funding at the district level would actually increase if 10 percent of parents took advantage of the $5,000 voucher to opt out of Arizona public schools.
  • Accountability and transparency in the financing of education would be improved by allowing tax dollars to follow students.

Arizona could greatly improve transparency by exempting students from the dense funding formula/categorical system currently in use.  By creating portability of just the state portion of public education funding, Arizona could greatly increase the ability of parents to determine how and where their children should be educated, says Aud.

Source: Susan Aud, "Student-Based Funding: How to Make Arizona Public Education Finance More Transparent and Accountable," Goldwater Institute, Policy Brief No. 09-01, April 1, 2009.


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