1. FY2010 Budget and 2009 Legislative Session Update July 15, 2009 Janice Palmer Arizona School Boards Association Jeremy Calles Arizona Department of Education Chuck Essigs Arizona Association of School Business Officials

2. Agenda A. Review of 2009 Legislative Session Janice Palmer B. Major Financial Components from 2009 Legislative Session Chuck Essigs C. 2010 Budget Process and Procedures Jeremy Calles

3. Financial Components / SB1196 Repeals requirement for teacher to maintain a Classroom Register (teacher required to “take and maintain classroom attendance”) Repeals requirement for teacher to maintain a Classroom Register (teacher required to “take and maintain classroom attendance”) Provides clarification for some special education definitions (no change in weights) Provides clarification for some special education definitions (no change in weights)

4. Financial Components / SB1196 Technology Assisted Project Based Instruction (TAPBI) now called Arizona Online Instruction (AOI) Technology Assisted Project Based Instruction (TAPBI) now called Arizona Online Instruction (AOI) Limit on number (7 district and 7 charter) is removed Limit on number (7 district and 7 charter) is removed State Board of Education and State Board for Charter Schools shall jointly develop standards for approval State Board of Education and State Board for Charter Schools shall jointly develop standards for approval Each new school shall provide instruction on a probationary status until clear demonstration of actual improvement of academic performance of students Each new school shall provide instruction on a probationary status until clear demonstration of actual improvement of academic performance of students

5. Financial Components / SB1196 Full-time student funded at 95% of Base Support Level and funding for CORL, Soft Capital and Additional Assistance same as for regular students Full-time student funded at 95% of Base Support Level and funding for CORL, Soft Capital and Additional Assistance same as for regular students Part-time student funded at 85% of Base Support Level and CORL, Soft Capital and Additional Assistance same as regular student Part-time student funded at 85% of Base Support Level and CORL, Soft Capital and Additional Assistance same as regular student Total student count cannot exceed 1.0 Total student count cannot exceed 1.0

6. Financial Components / SB1196 ADE shall notify State Board of Education if expenditures by school district exceed allowable budget (automatic hearing deleted) ADE shall notify State Board of Education if expenditures by school district exceed allowable budget (automatic hearing deleted) Penalty is reduction in budget capacity for the year subsequent to the year the allowable budget was exceeded Penalty is reduction in budget capacity for the year subsequent to the year the allowable budget was exceeded In the past, state aid was also reduced – now state aid reduced only if state aid calculation did not conform with the law In the past, state aid was also reduced – now state aid reduced only if state aid calculation did not conform with the law

7. Financial Components / SB1196 Unless otherwise prescribed by law, districts and charter schools shall begin to report new data elements on July 1 of the year that follows the effective date of the change in the law Unless otherwise prescribed by law, districts and charter schools shall begin to report new data elements on July 1 of the year that follows the effective date of the change in the law

8. Financial Components / SB1196 If governing board offers post- employment benefits, they can set up an other post-employment benefits fund or an other post-employment benefit trust account, or both If governing board offers post- employment benefits, they can set up an other post-employment benefits fund or an other post-employment benefit trust account, or both

9. Financial Components / SB1196 If after notification from the SFB, a district does not object in writing, the SFB may access public utility records of power, water, natural gas, telephone and broadband usage If after notification from the SFB, a district does not object in writing, the SFB may access public utility records of power, water, natural gas, telephone and broadband usage SFB must include in its response to a district’s application for emergency deficiencies funding, any investigative study or information requirement along with an estimated timeline SFB must include in its response to a district’s application for emergency deficiencies funding, any investigative study or information requirement along with an estimated timeline

10. Financial Components / SB1196 ASRS may establish and operate a supplemental employee deferral plan for public employees (includes district employees) other than state employees ASRS may establish and operate a supplemental employee deferral plan for public employees (includes district employees) other than state employees

11. Financial Components / SB1196 Allows a school district that has been approved by SFB for a new facility for 2009-10, but that will not receive SFB funding due to the new school construction moratorium, to lease state trust lands for use as school site and to be reimbursed by SFB Allows a school district that has been approved by SFB for a new facility for 2009-10, but that will not receive SFB funding due to the new school construction moratorium, to lease state trust lands for use as school site and to be reimbursed by SFB

12. Instructional Improvement Fund FY2009$41.07 per student History YearAmount (millions) YearAmount (millions) FY2009$43.4 FY2008$47.8 FY2007$46.1 FY2006$40.0 FY2005$31.4 FY2004$16.3

13. Classroom Site Fund YearAmount (millions) YearAmount (millions) FY2009$332.1 (est.) FY2008$502.1 FY2007$447.8 FY2006$379.8 FY2005$296.1 FY2004$265.3 FY2003$298.4 FY2002$205.4

14. Classroom Site Fund Included in SB1187 (Vetoed by Governor) March 30 th – 301 estimate March 30 th – 301 estimate New language “adjusted for any prior year carryforward or shortfall” New language “adjusted for any prior year carryforward or shortfall” Impact would have hit in FY2011 Impact would have hit in FY2011

15. Classroom Site Fund Original FY2009 estimate $390 Original FY2009 estimate $390 Revised FY2009 estimate $328 Revised FY2009 estimate $328 Actual FY2009 amount $259.45 Actual FY2009 amount $259.45 Difference original estimate to actual $390 - $259.45 = $130.55

16. Budget Provisions from HB2002 (3 rd Special Session) Additional Assistance for charters Additional Assistance for charters K – 8 increased to $1,588.44 9 - 12 increased to $1,851.30

17. HB2002 2009-10 Base Level $3,267.72 (2% increase after 2008-09 cuts) 2009-10 Base Level $3,267.72 (2% increase after 2008-09 cuts) Original 2008-09 Base Level $3,291.42 Original 2008-09 Base Level $3,291.42 State support level per route mile increased by 2% ($1.85 to $1.89 and $2.27 to $2.32) State support level per route mile increased by 2% ($1.85 to $1.89 and $2.27 to $2.32)

18. HB2002 Early K (less than 5 on September 1) repeaters not eligible for state aid Early K (less than 5 on September 1) repeaters not eligible for state aid Does not apply to K students “who were enrolled in a kindergarten program before the effective date of this act” Does not apply to K students “who were enrolled in a kindergarten program before the effective date of this act”

19. HB2002 Until October 1, 2009, budget for Career Ladder is not permitted to exceed amount budgeted for Career Ladder in 2008-09 Until October 1, 2009, budget for Career Ladder is not permitted to exceed amount budgeted for Career Ladder in 2008-09 Until October 1, 2009, budget for desegregation is not permitted to exceed amount budgeted for desegregation expenses in 2008-09 Until October 1, 2009, budget for desegregation is not permitted to exceed amount budgeted for desegregation expenses in 2008-09

20. HB2002 Until October 1, 2009, districts cannot use the new utility funding formula (A.R.S.15-910.04) Until October 1, 2009, districts cannot use the new utility funding formula (A.R.S.15-910.04) Districts not required to submit a utility funding plan for 2009-10 Districts not required to submit a utility funding plan for 2009-10

21. HB2002 Until October 1, 2009, ADE is to reduce Soft Capital by $175 million for basic state aid districts Until October 1, 2009, ADE is to reduce Soft Capital by $175 million for basic state aid districts Until October 1, 2009, ADE is to reduce Soft Capital budget capacity by a like amount for non-state aid districts Until October 1, 2009, ADE is to reduce Soft Capital budget capacity by a like amount for non-state aid districts