Fiscal Note
BILL # SB 1181 TITLE: Arizona online; instructional time model
SPONSOR: Bennett STATUS: As Introduced
PREPARED BY: Patrick Moran
Description
SB 1181 would allow Arizona online instruction (AOI) schools to use the funding formula for local education agencies
(LEAs) with an instructional time model (ITM).
Estimated Impact
We estimate that funding AOI programs under an ITM as authorized by the bill would increase Basic State Aid costs by at
least $7.2 million annually. This assumes unweighted Average Daily Membership (ADM) of 41,000 for full-time AOI
programs and 2,249 for part-time AOI programs (same as FY 2022). The actual cost could be higher or lower if actual
student counts are different from these assumptions.
The bill could also generate increases in ADM due to the bill's elimination of daily logs for AOI programs, which may result
in some time spent on academic tasks that is currently excluded from ADM calculations being included. The additional
fiscal impact is difficult to determine due to lack of data.
ADE has not yet provided an estimate of the impact of the bill.
Analysis
Current law stipulates that the Base Support Level component of the K-12 Basic State Aid formula be funded at a 95%
factor for students enrolled in full-time AOI programs and 85% for students enrolled in a part-time program. AOI
programs are not currently authorized to adopt an Instructional Time Model (ITM), which allows brick-and-mortar schools
to provide up to 40% of total instructional time in a remote setting without any impact to their funding. Any ITM program
with remote instruction that exceeds the 40% threshold is funded at 95% of the Base Support Level for the portion of
their student count that exceeds 40%.
The bill stipulates that AOI programs be funded in the same manner as an ITM. At AOI schools, 100% of instruction occurs
in a remote setting. As a result, the Base Support Level would be calculated at 100% for the first 40% of total instructional
time and 95% for the remaining 60% of total instructional time, which effectively equates to funding at 97%. Funding at
97% for AOI students would be a 2 percentage point increase relative to current law for full-time AOI programs and a 12
percentage point increase relative to current law for part-time AOI programs.
ADE reported in the Superintendent's Annual Financial Report that AOI programs generated total unweighted ADM of
43,249 in FY 2022, including 41,000 in full-time AOI programs and 2,249 in part-time programs. We estimate that under
an ITM full-time AOI pupils would receive an average per pupil increase of $135 and part-time pupils would receive an
average increase of $775. The resulting annual fiscal impact would be $7.2 million beginning in FY 2024 based on FY 2022
enrollment levels.
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There could be additional impacts if the bill results in AOI programs generating increased ADM due to the elimination of
daily logs. Under current law, calculations of ADM generated for students enrolled in AOI programs are based on a daily
log for each pupil that reports the number of minutes spent on certain academic tasks. ADE has previously indicated that
AOI programs may automatically track time spent on academic tasks through online platforms, which means that time
spent on academic tasks outside of the platform (e.g., studying, working on a project, etc.) may not always be reported
for ADM calculations.
Under the bill, daily logs would be eliminated. If the bill is interpreted to include time spent on direct instruction, project-
based learning, independent learning, and mastery-based learning as authorized under an ITM, there would likely be
increases in AOI ADM because some academic tasks that are not currently reported for ADM purposes, as noted above,
would be reported under the bill. We lack data on what share of AOI academic tasks are currently being unreported for
ADM purposes. In general, every 1% increase in AOI ADM that would occur under the bill could result in a fiscal impact of
approximately $3.5 million, above the $7.2 million impact from the BSL increases discussed above.
2/16/23