ARIZONA STATE SENATE
Phoenix, Arizona
small and rural school
districts
Purpose:
Eases, through formula
modifications, the restrictions placed on small and very small school districts
for exceeding their general budget limits.
Background:
Currently, statute allows
school districts with 125 or fewer elementary students and/or 100 or fewer high
school students (very small school districts) to adopt a budget in excess of
the district’s general budget limit without an override election. This is referred to as the small school
adjustment. A very small school
district in which student count exceeds the 125 and/or 100 statutory cap may,
in the first year of exceeding the cap, continue to adopt a budget in excess of
the general budget limit without an override election, if the increase does not
exceed that allowed under the special budget override formula applied to small
school districts. This is a formula
applied to school districts with fewer than 154 pupils in grades K-8 and/or
fewer than 176 high school students (small school districts), which caps the
budget increase that these districts may obtain in an override election.
If, after the first year of
exceeding the student count limit, a very small school district continues to
exceed the limit, the district may continue to adopt a budget greater than its
general budget limit without an override election, provided the excess is not
greater than $50,000.
H.B. 2183 modifies the formulas
regulating the budget increases allowed for small and very small school
districts with or without an override election. Under H.B. 2183, a very small school district is allowed to
indefinitely adjust its budget over its statutory limit without an override
election, based upon a new formula that phases out the adjustment when the
district’s student count reaches 205 pupils in grades K-8 or 200 high school
students. With respect to the budget
increase allowed under an override election, the formula is modified to allow a
small unified school district to receive an additional 10 percent of its
revenue control limit (RCL) for grade levels that do not meet the small student
count. Currently, the formula is only applied to grade levels (divided into elementary
or secondary) that meet the criteria.
The Joint Legislative Budget
Committee (JLBC) staff has estimated the fiscal impact of this legislation to
the state general fund at $24,000 over the biennium. This is attributed to the increased costs under additional state
aid. The JLBC staff also estimates that
local property tax levies in selected school districts will increase by
approximately $1 million over the biennium.
1. Authorizes a small unified school district that qualifies for the special budget override provisions to exceed its general budget limit, pursuant to the override, by the formula amount plus 10 percent of the RCL for grade levels that do not meet the small district eligibility criteria. Currently, only the formula amount, which is applied to grade levels (elementary or secondary) that meet the criteria, is authorized.
Budget Limits without Override Elections
2. Replaces the formula that is applied to a very small school district that subsequently exceeds the very small district student count limit, and which is used to calculate the maximum amount by which the school district may exceed its general budget limit without an override election.
3. Applies the new formula to very small school districts that are eligible for the small school adjustment in any year after FY 1998-1999.
4. Authorizes use of the new formula in all successive years that a very small school district exceeds the statutory student count caps. The current formula is applied to the first year only, and subsequent year budget increases are capped at $50,000 over the general budget limit. Clarifies that the $50,000 excess budget limit cap continues to apply to school districts that qualified for the small school adjustment prior to FY 1999-2000.
5. Phases down, within the formula, eligibility for the excess budget authorization as very small school districts approach 205 pupils in grades K-8 and 200 high school students. Eliminates eligibility when these counts are reached.
6. Subjects the phase-down formula to an election and stipulates the maximum number of years that the formula can be approved for at the election is 5 years.
7. Adjusts down the property tax formula to the secondary property tax for constitutional purposes.
8. Prohibits the school district from going for a school district budget override under A.R.S. 15-481 if the school district has a phase-down formula override.
9. Makes clarifying and conforming changes.
10. Provides for a general effective date.
Amendments Adopted by Committee
1.
Subjects
the phase-down formula to an election and stipulates the maximum number of
years that the formula can be approved for at the election is 5 years.
2.
Adjusts
down the property tax formula to the secondary property tax for constitutional
purposes.
3. Prohibits the school district from going for a school district budget override under A.R.S. 15-481 if the school district has a phase-down formula override.
4.
Clarifies
that the $50,000 excess budget limit cap continues to apply to school districts
that qualified for the small school adjustment prior to FY 1999-2000.
House Action Senate Action
ED 2/5/01 DP 7-0-0-3 ED 3/29/01 DPA 7-0-1
WM 2/20/01 DP 9-0-0-1 APPROP 4/4/01 W/D
3rd Read 3/12/01 33-17-10
Prepared by Senate Staff
April 18, 2001