Assigned to K-12 ED & APPROP                                                                                                   FOR COMMITTEE

ARIZONA STATE SENATE

Forty-seventh Legislature, Second Regular Session

FACT SHEET FOR S.B. 1205

schools; transportation RCL; limited increases

Purpose

            Stipulates that school districts may not increase their Transportation Revenue Control Limit if it is greater than 120 percent of the district’s Transportation Support Level.

Background

            In 1981, the Legislature passed school finance legislation intended to give more budgetary control to local school districts and eliminate funding disparities throughout the state. School districts employ several formulas to determine their maintenance and operations budgets. The two formulas currently in use for transportation funding are: a) Transportation Support Level (TSL) and b) Transportation Revenue Control Limit (TRCL).

            School districts calculate the TSL by multiplying their average daily bus route miles by the number of school days and a statutorily set support level amount. In FY 2005-2006, the support level amount is $1.74 or $2.15, depending on the mileage traveled for an eligible pupil. The support level amount increases by two percent each year. Other transportation related expenses, such as bus passes and tokens, are added to the total. The state and the school districts share in the costs of this program through the school finance formula.

            School districts calculate TRCL for their next budget year by first calculating the percentage growth difference between their current budget year TSL amount and their new budget year TSL amount. This percentage growth amount is then applied to the current year TRCL to calculate the next budget year amount. TRCL is held harmless for any decline in the TSL amount that can occur from year to year. In FY 2004-2005, TRCL totaled approximately $54 million. The revenues for TRCL are generated through a primary tax levy and are subsidized by the state through the Additional State Aid program (A.R.S. § 15-972).

            Based on FY 2004-2005 Joint Legislative Budget Committee estimates, passage of S.B. 1205 will result in state General Fund savings of $1 million due to decreased state costs in the Additional State Aid program (“Homeowners Rebate and one percent cap”).

Provisions

1. Prohibits school districts from increasing their TRCL if it is greater than 120 percent of the district’s TSL.

2. Becomes effective on the general effective date, retroactive to May 15, 2006.

Prepared by Senate Research

January 23, 2006

DN/BB/jas