Assigned to FIN FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
FACT SHEET FOR S.B. 1473
K-12; school funding; revisions
Purpose
Establishes a state student funding formula (SSF formula) which must be used to calculate
charter school equalization assistance. Outlines procedures for an eligible school district to elect
to use the SSF formula and prescribes the calculation of tax rates for a school district that uses the
SSF formula.
Background
The school finance formula entitles school districts to funding in an amount known as the
equalization base, which is equal to the sum of the base support level (BSL), transportation support
level (TSL) and district additional assistance (DAA). The BSL is calculated by multiplying the
statutory per-student base level amount by the district's weighted student count, multiplied by the
teacher experience index (TEI). The TEI increases a school district's BSL by 2.25 percent for each
year by which the district's average certified teacher experience exceeds the state average (A.R.S.
§§ 15-941 and 15-943).
The equalization base for a school district is first funded by local property tax revenues
collected from the qualifying tax rate (QTR) levy and then by the state General Fund (state GF).
Basic State Aid (BSA) is the amount of state GF monies necessary for a school district to receive
the full equalization base amount after accounting for the assumed QTR revenues (A.R.S.
§ 15-971).
A charter school's equalization base is equal to the sum of the BSL and charter additional
assistance (CAA). The BSL calculation for charter schools excludes the TEI increase. Charter
school formula costs are funded only by the state GF (A.R.S. § 15-185).
If requiring charter schools to use the prescribed SSF formula and authorizing certain
school districts to opt into the SSF formula results in a change in BSA obligations, there may be a
fiscal impact to the state GF associated with this legislation.
Provisions
SSF Formula
1. Establishes the SSF formula to be calculated by adding a school district's or charter school's
BSL to the prescribed state additional assistance (SAA) amounts.
2. Sets the SAA per student count amounts at:
a) $2,025.29 for preschool programs for children with disabilities, kindergarten programs and
grades 1 through 8; and
b) $2,360.44 for grades 9 through 12. FACT SHEET
S.B. 1473
Page 2
Charter Schools
3. Determines that charter school equalization assistance must be calculated according to the SSF
formula, rather than by adding BSL and CAA.
4. Removes the specified per-student CAA amounts of:
a) $2,090.10 for preschool programs for children with disabilities, kindergarten programs and
grades 1 through 8; and
b) $2,435.97 for grades 9 through 12.
5. Removes the requirement that a charter school that was a district school in the prior year and
has a sponsor that is not a school district to reduce the charter school's BSL by an amount equal
to the BSL and CAA received in the current year for pupils who were enrolled in the traditional
public school in the prior year.
School Districts
6. Determines that equalization assistance for a school district that elects to use the SSF includes
SAA, rather than DAA.
7. Authorizes a school district that provides instruction to students in any combination of
kindergarten programs and grades 1 through 12 to use the SSF formula to determine the school
district's district support level, if the school district does not have an override in place, has a
support level ratio that exceeds 50 percent and:
a) does not owe any debt service payments on a Class A or Class B Bond; or
b) has four or fewer remaining fiscal years in which the school district is scheduled to make
payments on a Class A or Class B Bond.
8. Specifies that a school district's support level ratio is calculated by dividing the quotient of a
school district's equalization assistance amount and the school district's primary assessed
valuation by one-tenth of the QTR amount for a school district that uses the SSF formula.
9. Authorizes the governing board of an eligible school district for which the estimated total
school district primary property tax rate will be less than or equal to the prior year rate to:
a) vote at a governing board meeting to use the SSF formula; or
b) call an election to submit to the voters the question of whether the school district should
use the SSF formula.
10. Authorizes the governing board of an eligible school district for which the estimated total
school district primary property tax rate will be greater than the prior year rate to call an
election to submit to the voters the question of whether the school district should use the SSF
formula.
11. Requires the question submitted to the voters to describe the tax rate associated with using the
SSF formula and the estimated cost of that tax rate for the owner of a single-family home
valued at $200,000. FACT SHEET
S.B. 1473
Page 3
12. Requires a school district authorized to use the SSF formula by a vote of the electors or the
school district governing board (governing board) to use the SSF formula, and not the standard
formula, beginning the next fiscal year following the authorization.
13. Precludes a school district using the SSF formula from:
a) receiving DAA;
b) applying for or receiving funding from the Division of School Facilities or the School
Facilities Oversight Board, except for funding for new school facilities; and
c) using any other source of property tax-generated funding, including funding generated
through bonds or overrides or for desegregation costs, the transportation revenue control
limit, small schools adjustments, tuition loss or improving adjacent ways.
14. Requires each school district that elects to use the SSF to subtract from the school district's
equalization assistance amount an amount equal to the total amount of monies the school
district receives from a federal or state agency that is intended to offset property tax revenue
not received from federal lands.
15. Directs a governing board that decides by a majority vote to revert to the standard formula to
determine the question by calling an election.
16. Requires, for a governing board that calls an election on the question of whether to use the SSF
formula or the question of whether to revert to the standard formula, that the question be
submitted to a vote at an election that is held:
a) on the first Tuesday after the first Monday in November; and
b) in the same manner as other school district elections.
17. Authorizes a school district in which a majority of the qualified electors who vote on the
question vote to no longer use the SSF formula to use all other available funding authorized
by law in the fiscal year following the election.
18. Prohibits a school district from submitting the question for an override or Class A or Class B
Bond in the same election as a question to opt out of the SSF formula.
19. Defines district support level, for a school district that elects to use the SSF formula, as the
BSL.
20. Defines revenue control limit, for a school district that elects to use the SSF formula, as the
base revenue control limit.
21. Specifies that school district, for the purposes of the authorization to elect to use the SSF
formula, does not include a career technical education district.
Taxation
22. Sets the tax year 2024 QTR for a school district that uses the SSF formula at:
a) $1.9116 for a high school district or a common school district within a high school district
that does not offer instruction in high school subjects; and
b) $3.8232 for a unified school district, common school district not within a high school
district or a common school district within a high school district that offers instruction in
high school subjects. FACT SHEET
S.B. 1473
Page 4
23. Specifies that, for a school district that uses the SSF formula and is ineligible for equalization
assistance, the minimum qualifying tax rate (MQTR) calculation is based on the applicable
QTR for a school district that uses the SSF formula.
24. Requires the county school superintendent, at the time of levying the MQTR, to levy, for a
school that uses the SSF formula:
a) a rate that would result in a levy that equals the amount not captured by the QTR as a result
of property subject to the government property lease excise tax;
b) following the county school superintendent's recommendation and county board of
supervisors' (county BOS) approval and if the school district is ineligible for state aid, a
rate that would result in a levy that equals any legal amount not levied in the current year
as a result of underestimated average daily membership or as a result of a judgement by
the court of a property's full cash value; and
c) on the county school superintendent's recommendation and county BOS approval before
adoption of property tax rates, a rate that would result in a levy equal to any separate state
cash deficit from the prior fiscal year resulting from an anticipated or actual deviation in
the property tax roll, including resolutions or judgments according to property tax appeals
and correcting property tax errors.
Miscellaneous
25. Requires an empowerment scholarship account student to be funded in an amount equal to 90
percent of the amount that would be calculated for that student under the SSF formula, rather
than 90 percent of the BSL and additional assistance for that student if the student were
attending a charter school.
26. Makes technical and conforming changes.
27. Becomes effective on the general effective date.
Prepared by Senate Research
February 13, 2025
MH/ci