Database Sheds Light on Ariz. School Funding

Published June 1, 2006

An April 19 analysis from the Goldwater Institute and Milton & Rose D. Friedman Foundation examines updated financial data from the Arizona Department of Education’s (ADE) multiple accounting systems and describes the changes that have occurred in public school funding in the state between the 2002-03 and 2003-04 fiscal years.

The result is a comprehensive student funding database, available on the Goldwater Institute Web site (, and an accompanying analysis, “Opening the Books: 2006 Annual Report on Arizona Public School Finance.”

The data show per-pupil funding for public schools in the state is much higher than has been reported by other sources.

The online K-12 Funding Index gives Arizonans unprecedented access to the most accurate financial data available for all 218 regular Arizona public school districts. The index breaks down revenue for both fiscal years into per-student amounts–making it easy to identify how, and how much, funding has changed from one year to the next in each school district.

The analysis, which relies exclusively on ADE financial reports, found a total increase of $248 million in formula funding in fiscal year 2004. The average per-student formula funding ranged between $4,000 and $4,400, depending on grade level. Those figures represent an increase of almost $100 over fiscal year 2003.

High Costs

In addition to formula funding from state and local revenue, districts also receive an average of $3,965 per student in non-formula funding, which includes local, county, non-equalized state, and federal revenue. Most published reports often ignore non-equalized funding. Thus, the average total spending for an Arizona public school student is between $8,000 and $8,500–far more than people might think.

State legislators lauded the new tool.

“It is great that the taxpayers now have the ability to see the amount of money that is spent by each school district in Arizona,” said state Sen. Ron Gould (R-Lake Havasu City), vice chairman of the Arizona Senate K-12 Education committee.

Goldwater Institute President Darcy Olsen agreed but said the new tool doesn’t solve the state’s school funding problems.

“Transparency is a first step toward accountability. Unfortunately, we find increased funding has not led to improved student academic achievement,” Olsen said.

Conflicting Reports

K-12 education spending accounts for sizeable portions of general fund budgets in most states, and Arizona is no exception. At $4.5 billion, public education expenditures account for about half the state’s general-fund spending. Given the complexity of public school finance, however, few people really know where all that money goes.

For example, in its June 2005 Rankings & Estimates report, the National Education Association (NEA) said Arizona spends $5,222 per student, while Education Week‘s January 2006 Quality Counts ranking claimed the state spends $6,331. And, in March 2006, the U.S. Census Bureau ranked Arizona 49th nationwide for spending, at $6,036 per pupil.

Meanwhile, financial and student enrollment data from the state superintendent’s Annual Financial Report 2004 indicate statewide per-student funding averages $8,400 in Arizona–close to the U.S. Department of Education’s national average of $8,900.

With so many conflicting figures, it has been difficult to know what’s being spent to educate a student in one of Arizona’s public schools. The state itself does not synthesize the ADE’s multiple accounting systems.

Adequate Funding

The Goldwater Institute’s updated K-12 Funding Index allows policymakers to calculate the fiscal impact on school districts and the state if students are given education grants to attend private schools. For instance, if 5 percent of public school students in Arizona (roughly 40,000 children) transferred to private schools using elementary education grants worth $3,500 and high school education grants worth $4,500–both less than the average state formula funding per student–the net savings to the state and local districts would have been $37 million in fiscal year 2004, $5 million more than the estimated savings for fiscal year 2003.

A June 2004 Educational Testing Service poll found nearly half of all Americans think per-student funding averages less than $5,000. Once respondents were told the U.S. spending average is closer to $9,000, 62 percent said that amount “should be enough.”

But some Arizona public school interest groups would prefer parents and taxpayers didn’t have such easy access to information about how much money public schools are getting. In response to the 2005 report, last January the Arizona Association of School Business Officials sent a letter to state legislators, complaining that presenting in one place all fiscal year revenue data as reported by the ADE “is confusing, misleading, and not right.” The lobbyists praised the ADE for having “the knowledge and insight not to present” financial data this way.

Robert Enlow, executive director of the Milton & Rose D. Friedman Foundation, a national school choice organization, disagreed.

“We believe Arizonans need to know exactly how much is spent to educate children,” Enlow said. “You can’t make an informed decision on what to buy if you don’t know how much it costs.”

Vicki Murray, Ph.D. ([email protected]) is an independent education policy researcher based in Paradise Valley, Arizona. She is the former director of the Center for Educational Opportunity at the Goldwater Institute in Phoenix, and co-author of Opening the Books: 2006 Annual Report on Arizona Public School Finance.

For more information …

Opening the Books: 2006 Annual Report on Arizona Public School Finance,