1. Dr. Chuck Essigs Arizona Association of School Business Officials

2.  FY 2011$550 million  FY 2012$1.0 billion  FY 2013$600 million  FY 2014$1.1 billion

3.  Estimated revenue in FY2014 of $8.46 billion  Vs. actual revenue in: FY2005 of $7.72 billion FY2006 of $9.26 billion FY2007 of $9.62 billion  9 years before revenues will be back above the FY2005 level

4.  One cent sales tax ends in FY2014 - $1 billion  K-12 rollover - $1 billion (estimate)  Suspended funding formulas - $1 billion  Increased cost to State from AV decline

5.  Capital Outlay (CORL)**$ 98.864.800  Soft Capital$188,120,700  New Utilities (Repealed)$100,000,000  Charter School Add’l Assistance$ 17,656,000  Building Renewal$241,593,600 $646,235,100 *No estimate for New School Construction ** Included both $63,864,800 and $35,000,000 Edu. Jobs Related Cut.

6.  “Jobs” Bill – K-12 Specific Items  Reduces the Class 1 (business) assessment ratio from 20% to 18%, in ½ percentage point increments per year, beginning in Fiscal Year 2014 (FY14) and ending in Fiscal Year 2017 (FY17)  Reduces Class 2 (agricultural and vacant land) from 16% to 15% beginning in Fiscal Year 2017  Increases the homeowner’s rebate for FY14 through FY17 by the amount needed to offset the assessment ratio change effects  TABOR  Various bills and referenda were proposed  Would limit general fund revenues to the previous year’s budget plus population growth and inflation---Legislation Passed

8.  State Funding Reduced by estimated $101.2 Million  Districts and Charters Budget Capacity Reduced by estimated 101.2 Million  Districts Could Use Edu. Jobs Funds to Cover Reduction (1/2 of Total Edu. Jobs Funding Available)  Budget Revision Not Required

9.  Base Level stays at $3,267.72/ No Increases  Inflation Increase of 0.9%  Transportation $0.02 Mile Increase  Addition Assistance for Charters ▪ K-8 Increase of $14.47 to $1,621.97 ▪ 9-12 Increase of $16.86 to $1,890.38

10.  Soft Capital Cut by $188.1 Million – Most Likely a Greater than 90% Reduction  CORL Cut #1 by $63.9 Million  CORL #2 Cut by an Additional $35 Million – Edu. Jobs Issue

11.  Additional Assistance Cut by $17.7 Million (Average $135 per student)

12.  For districts with fewer than 1100 students, Soft Capital and CORL cuts cannot total more than $5 million statewide

13.  Base Level Adjustment  4% FY2012  3% FY2013  2% FY2014  1% FY2015  Qualifying Tax Rate  $0.10 K-8 and 9-12 districts  $0.20 K-12 Districts

14.  New School Formula – Suspended  Building Renewal Formula - Suspended

15.  Prohibits JTED’s from Receiving State Funding for 9 th Grade Students  Spending on 9 th Grade Students Still Allowed (HB2237)

16.  Actual Utility Funding Formula Eliminated  Teacher Performance Pay Program (ARS15-977) Eliminated/Not Teacher Comp

17.  Changes Current 50/50 Split to Employee Pays 53% and Employer Pays 47%  Estimated Rate Beginning July 1, 2011  Employee would be 10.75%, now will be at 11.40%  Employer would be 10.75%, now will be at 10.10%

18.  Employee goes from 9.85% to 11.40%  Employer goes from 9.85% to 10.10%  Employee up 1.55%  Employer up 0.25%

19. SalaryEmployeeEmployer $20,000$130 increase$130 decrease $40,000$260 increase$260 decrease $80,000$520 increase$520 decrease Amount district saves will result in reduced state aid and budget capacity. Charters are also impacted.

20.  Started In FY2002  Highest year FY2008 $397 per weighted student  Districts had been allowed to spend to estimate  For FY2010 cumulative shortfall of $195  Starting in FY2011 state had to adjust for shortfall

21. YearBudget CapacityTotal AvailableDifference FY2002$272.42$272.15 FY2003$239.47$239.32 FY2004$230.00 0 FY2005$242.00 0 FY2006$353.00$320.43 FY2007$333.00$333.07$0.07 FY2008$401.00$397.10 FY2009$390.00$259.45 FY2010$244.00$216.00 Total$2704.89$2497.17 Ave.$300.54$277.46

22.  Estimated Cash amount $219  Adjusted for shortfall $219-$124.99 = $94  Legislature may set amount at $120 (SB1263)

23.  Allocation from ARS 15-979 (per weighted student) $120* per weighted student  Unexpended budget balance from FY2011  The net interest earned during FY2011 *with SB1263

24.  Additional teacher compensation money from sources other than Classroom Site Fund for FY2012.  Not considered supplanting for FY2013 calculation.

25.  Current QTR $2.9594 Unified / $1.4797 Elementary and High School  Proposed (FY2012) $3.5364 Unified / $1.782 Elementary and High School  State Equalization Rate Current is $0.3564 proposed (FY2012) is $0.4259

26.  Alternate Contribution Rate (ACR)  Require employers beginning July 1, 2012 to pay an ACR (Est. 7%+)  Required for employees who are retired including direct/leasing/contracted (less than 20 hours too)

27.  Normal Retirement Age  Before July 1, 2011 80 points still available  After July 1, 2011 ▪ Age 55/ 30 years of service ▪ Age 60/ 25 years of service ▪ Age 62/ 10 years of service ▪ Age 65

28.  Service Purchase  10 years to quality vs. 5 years  Purchase only up to 5 years of service  Require members to forfeit time in old system to purchase it

29.  HB 2002 (school district monies; associations; elections)  As amended, this bill would prohibit school districts from paying for membership in an association that attempts to influence an election.

30.  Reduces time frame for closing schools  Classroom Site Fund - $120 and supplanting for FY2012  Override calculation relief continues for FY2012 – Base level and Full Day K  Changes performance pay for Superintendents – Excludes benefits and sets amount up to 20%  Flexibility on disposal of equipment, furnishings and supplies

31. Removed From Bill-For FY2012 and 2013 allows unrestricted capital to be used for any capital or operational expense (excludes SFB and override funds) Also Removed-For FY2012 and 2013 permits carryover in excess of 4%

32.  Allows warrants drawn on the County Treasurer to be processed through an electronic system  Increases bonding capacity /Approved prior to April 15,2011 5% to 10% and 10% to 20%  Allows for elections to change list of projects and time period to issue extended from 6 to 10 years

33.  [Maybe] Soft Capital could be used for operational expenses -Permanent Change  Unspent contributions for a program that has been discontinued or has not been used for 2 consecutive fiscal years may be used for any extracurricular purpose  Unencumbered monies  50% may be used for short-term items such as technology, textbooks, library resources, instructional aids, pupil transportation vehicles and furniture and equipment in Fy2012 and FY2012 (Does not apply to funds received after FY2010)

36. AZ

37. YearAZU.S. AverageAZ Percent of U.S. Average 1969-70$674$75189.7% 1979-80$1865$208887.3% 1989-90$3717$464380.1% 1995-1996$4476$568978.7% 1999-2000$5030$641272.8% 2006-07$7610$1004175.7% 2007-08$7608$1025974.2% Source: National Center for Education Statistics (NCES)

38.  1969-70 AZ ranked 29 th above 21 other states  2007-08 AZ ranked 48 th above 2 other states  To move back to 89.7% of U.S. Average  Increase expenditures to $9202 (2007-08)  Increase of $1594 per pupil

39. Arkansas Georgia Idaho* Indiana Kentucky Louisiana Maine Mississippi Missouri New Hampshire New Mexico North Carolina North Dakota Oklahoma South Carolina South Dakota Tennessee Utah* Virginia West Virginia * States AZ was above in 2007-08

40. AreaNationalAZDifferenceAZ % of National Total$10,297$7,814 75.9% Classroom$6,262$4,481 71.6% Student Support$556$577$21103.8% Food Service$390$373 95.6% Plant Operations$1,003$881 87.8% Instructional Support$539$436 81.4% Transportation$438$346 79% Administration$1,109$720 64.9% Source: Arizona School District Spending (Classroom Dollars) Fiscal Year 2010, Office of the Arizona Auditor General

41. AreaNationalAZ Total$10,297$7,814 Classroom$6,262$4,481 Student Support$556$577 Instructional Support$539$436 Plant Operations$1,003$881 Subtotal$8,360$6,375 % of Total81.2%81.6% Source: Arizona School District Spending (Classroom Dollars) Fiscal Year 2010, Office of the Arizona Auditor General

43.  SB 1286 (2010, 2 nd Regular Session)  Labeling changed from word labels to letter grades  Adds the labeling of school districts in the aggregate  New formula:  50% of the school and district profile must be based on academic performance measures ▪ ½ = all students academic gain ▪ ½ = lowest quartile academic gain

44.  SB 1040 (2010, 2 nd Regular Session)  Requires the State Board of Education, on or before December 15, 2011, to adopt and maintain a model framework for a teacher and principal evaluation instrument  Must include quantitative data on student academic progress that accounts for 33% and not more than 50%  Must include best practices for professional development and evaluator training  Requires school districts and charter schools to annually evaluate individual teachers and principals beginning in school year 2012-2013  Teacher and Principal Evaluation Task Force  Expedited process  Will provide a framework to districts  March State Board of Education Study Session and scheduled for Final Adoption in April  Various organizations will be charged with implementation assistance

45.  HB 2731 (2010, 2 nd Regular Session)  Creates the Grand Canyon Diploma to enable high school students to choose different educational pathways.  HB 2732 (2010, 2 nd Regular Session)  Establishes the Task Force on Reading Assessment to report by January 15 th, 2011  Requires that a student not be promoted from the 3 rd grade if the student obtains a score on the reading portion of the AIMS test, or a successor test, that demonstrates that the student is reading far below the 3 rd grade level  Requires the State Board of Education (SBE) to develop intervention and remedial strategies ▪ Requires school districts to offer at least one of the intervention and remedial strategies developed by the SBE