Page 16 - School Finance Manual 2018-19

Where Formula Dollars Come From 16

The money to support the Revenue Control Limit The State Board of Education is charged with distributing
and District Additional Assistance, as set forth in the state aid (equalization assistance) from the state aid enti-
preceding sections, are obtained from two main sources tlement for school districts. A.R.S. §15-973 provides the
- state equalization assistance and property taxes. following schedule for state aid distributions to school
districts:
State Equalization Assistance
On the first business day of:
The school finance formula attempts to ensure that each
district has equitable budget capacity compared to others August 1/12 of the total amount is distributed
in the state. Equalization assistance helps to ensure that September 1/12 of the total amount is distributed
the revenues available for district budgets are shared October 1/12 of the total amount is distributed
equitably as described in A.R.S. §15-971. Equalization November 1/12 of the total amount is distributed
assistance is the amount of money that the state provides December 1/12 of the total amount is distributed
to school districts over and above the levy amount raised
with the uniform Qualifying Tax Rate (QTR). If the local January 1/12 of the total amount is distributed
tax rate necessary to fund the RCL/DSL, CORL and allo- February 1/12 of the total amount is distributed
cation formulas is equal to or lower than the Qualifying March 1/12 of the total amount is distributed
Tax Rate, no state equalization assistance is given. If April 1/12 of the total amount is distributed
the tax rate necessary to fund the formulas is greater May 1/12 of the total amount is distributed
than the Qualifying Tax Rate, state equalization assis-
tance is provided in order to keep this portion of local June 1/12 of the total amount is distributed
property taxes uniform throughout Arizona. The amount
of equalization assistance provided varies inversely with On the last business day of:
a district’s per weighted student assessed property valu- June 1/12 of the total amount is distributed
ation. As the district assessed valuation per student goes
up, the equalization assistance goes down. The state If a school district has cash flow problems, it can apply to
equalization aid formula can be described as follows: the Superintendent of Public Instruction for early payments
on the schedule shown above. Advance payments will be
1. Equalization base is the sum of the lesser of the RCL made if state funds are available and if approved by the State
or DSL, District Additional Assistance Allocation and Treasurer, the Director of the Department of Administra-
District Type 03 tuition-out charge (if applicable). tion and the Superintendent of Public Instruction. In no
event is a school district allowed to receive more than
2. District Preliminary Assessed Valuation (A.V.) - three-fourths of its total apportionment before May 1 of
Including valuation of in-lieu contributions. the fiscal year.

3. Qualifying Tax Rate (QTR) for 2018-19 is $19,679
for elementary level students and high school students.
Unified and Type 03 elementary districts must separately
determine equalization based on PSD-8 student count
and 9-12 student count.

4. Qualifying Levy is the district’s Primary Assessed
Valuation divided by 100 multiplied by the Qualifying
Tax Rate.

5. Equalization Assistance is the Equalization Base
minus the Qualifying Levy.

Arizona Association of School Business Officials | School Finance Summary Manual