E-Mail messages to PUSD Employees from former Supt. Kevin Kapp RE: AZ Budget Crisis (in reverse chronological order)

Budget Update

State budget crisis and its impact on PUSD

As concerned citizens, it is imperative we stay informed on the budget process and how it affects our students. Please bookmark this page, as it is updated frequently.

Page updated 04/19/10

Public education in Arizona took a massive financial hit recently as lawmakers worked to balance a budget with a $1.6 billion deficit for the remainder of the 2008-09 fiscal year.

All Arizona school districts were informed in January 2009 that the state legislature was requiring a reduction in all 2008-09 budgets so the state could balance its current year budget. The statewide reduction for 2008-09 is $98 million with an additional 10% reduction in Soft Capital. The legislation also allows school districts flexibility to use any remaining Soft Capital funds in 2008-09 to offset the budget reduction in the school district's Maintenance and Operations (M&O) budgets.

The legislature is now tackling the 2009-10 state budget, which may total as much as $891 million in additional cuts to K-12 public educaton funding. These massive reductions will greatly affect all school district education budgets. Districts throughout the state are being asked by the legislature to plan for cuts that could amount to up to 18-20% of their total budgets because the state budget deficit could exceed $3 billion. To view the K-12 proposed legislative budget cuts to education for 2009-2010 school year, go to www.azleg.gov/jlbc/10chairmenoptions/79.pdf.

What this means for PUSD

PUSD's budget reduction for the current 2008-09 school year is approximately $500,000. To make up for this reduction, the governing board approved using $500,000 of Employee Benefit Trust (EBT) reserve funds to fund health insurance costs for eligible PUSD staff for the necessary months remaining in the 2008-2009 fiscal year to offset the PUSD Maintenance and Operations (M&O) budget reduction.

PUSD's EBT health insurance reserve fund currently has a balance of $2,122,818. These reserves are PUSD's reserves and are not part of the newly-formed Yavapai Unified Employee Benefit Trust (YUEBT) health insurance program. An amount of $214,000 from this reserve fund is utilized yearly to offset a health insurance rate increase from several years ago. In 2007, the EBT reserve fund accrued $140,830 in interest. Utilization of PUSD's EBT reserve fund for this year's PUSD budget reduction has allowed PUSD to avoid implementing an immediate Reduction in Force.

We expect to be hit even harder next year with the state shortfall to be more than twice this year's amount. PUSD is expecting to make between 2 and 3 million dollars in cuts for next year.

Arizona Education Funding Facts

K-12 Education Per Pupil Funding:

-In 2006-07, Arizona spent $6,248 per pupil, just over $3,000 less than the national avaerage of $9,963.

-From 1986-87 through 2006-07, Arizona's percentage change in expenditure per pupil has been -0.96%, while nationally it was 36.56%. This means AZ actually spent less in 2007 ($6,248) than it did in 1987 ($6,309) when you adjust for inflation.

Source: American Legislative Exchange Counceil (ALEC) Report Card on American Education, 2006-07 figures. EPE Research Center, Education Week, 2009 figures.

How school finance works in Arizona

Arizona ranks 49th in the nation when it comes to per pupil funding. School funding is based on a complicated statutory formula set by the Legislature. The amount schools receive per student is based on the 100th day Average Daily Membership (ADM) or average number of students enrolled each day.

One aspect of the formula is the Base Support Level which guarantees $3,333 per student. The Legislature has added only minimal inflationary funding of $2,000 since its inception over 20 years ago. This formula does not provide adequate funding for instructional areas such as gifted services, special education, and English Language Learner programs, programs that obviously require more resources. Nor does it provide money for the many unfunded mandates school districts must meet.

This lengthy formula results in Arizona public schools receiving roughly $4,542 per student from the state, ranking us 49th in the nation. That $4,542 makes up the Maintenance and Operations and Capital funds which are directed toward teacher salaries, transportation, and operating our school buildings among a host of other areas.

PHS renovations and bond funds

In 2004, the Prescott community passed an $18.7 million bond for PUSD capital projects. The funds from the bond can only be used for capital building projects and cannot be used for any other purpose, including the upcoming budget cuts from the state of Arizona.

The Prescott High School renovations (Phase III projects) currently in progress are funded through the voter-approved bond.

The state of Arizona’s projected cuts are to PUSD’s Maintenance and Operation (M&O) funding which is not a part of the capital bond.

What you can do

Contact your Legislators. Voice your suggestions to your Legislators. Legislators serving the PUSD area are:

District 1
Senator Steve Pierce (R) spierce@azleg.gov

602-926-5584

Representative Andy Tobin (R) atobin@azleg.gov
602-926-5172

Representative Lucy Mason (R) lmason@azleg.gov 602-926-5874

Visit the legislature's website at www.azleg.gov

Contact the Governor's Office.
Jan Brewer, Governor (602) 542-4331 or (800) 253-0883

Visit the Governor's website at http://azgovernor.gov.