Arizona is an equalized state with a complex per pupil funding formula. That statement alone is typically enough to intimidate people into believing that either it will be too difficult or take too long to understand how School Districts are funded. However, you can gain a conceptual understanding of how School Finance works in a matter of minutes. It will take several hours to fully understand specific details about the funding formulas but depending on your level of interest it can be well worth the investment.
For more information on public school funding in Arizona, see the Arizona School Finance Summary Manual.
School Districts receive funding from a Per Pupil Formula as well as voter-approved initiatives such as Bonds and Overrides.
The Per Pupil Formula
This formula provides funding for Operating Costs, Transportation and Capital needs. It is the minimal amount needed, as determined by the State, to deliver a Free and Appropriate Public Education. The funding generated for each student varies based on their grade level and special education needs. On average, each student generates approximately $5,000 of funding. The funding generated by the formula is provided by the property taxes of the District and, if the District qualifies, a portion is funded by State Aid. The Assessed Value (property values) of the District is what determines how much of the funding will be provided by the State and how much will come from a Local Levy (the Primary Tax Rate on your property tax bill). The State's money is last in and first out meaning that increased enrollment results in increased State Aid and decreased enrollment results in decreased State Aid.
A District that wishes to provide a High-Quality Education can do so with Local Support of Budget Overrides. The amount a District can request from its community is limited by the portion of the Per Pupil Formula called the Revenue Control Limit. A Maintenance and Operations override may not exceed 15% of the Revenue Control Limit. A District Additional Assistance override may not exceed 10% of the Revenue Control Limit.
Bonds are used to maintain facilities and provide pupil transportation vehicles. Bond Funding has become critical over the past several years as the State continues to reduce Capital Budgets for School Districts. A District's ability to sell Bonds is based on the Authorization that they receive from their voters and it is also tied to their Assessed Values (property values).