Page 16 - School Finance Manual 2021-22

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. In reality district’s’ will receive
- state equalization assistance and property taxes. 1/12th of 2/3rds of the state aid payments each month
and the additional 1/3rd lump sum payment is rolled over
State Equalization Assistance in July of the subsequent fiscal year. A.R.S. §15-973
provides the following schedule for state aid distributions
The school finance formula attempts to ensure that each to school districts:
district has equitable budget capacity compared to others
in the state. Equalization assistance helps to ensure that On the first business day of:
the revenues available for district budgets are shared
equitably as described in A.R.S. §15-971. Equalization August 1/12 of the total amount is distributed
assistance is the amount of money that the state provides September 1/12 of the total amount is distributed
to school districts over and above the levy amount raised October 1/12 of the total amount is distributed
with the uniform Qualifying Tax Rate (QTR). If the local November 1/12 of the total amount is distributed
tax rate necessary to fund the RCL/DSL, CORL and allo- December 1/12 of the total amount is distributed
cation formulas is equal to or lower than the Qualifying
Tax Rate, no state equalization assistance is given. If January 1/12 of the total amount is distributed
the tax rate necessary to fund the formulas is greater February 1/12 of the total amount is distributed
than the Qualifying Tax Rate, state equalization assis- March 1/12 of the total amount is distributed
tance is provided in order to keep this portion of local April 1/12 of the total amount is distributed
property taxes uniform throughout Arizona. The amount May 1/12 of the total amount is distributed
of equalization assistance provided varies inversely with
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 On the last business day of:
equalization aid formula can be described as follows: June 1/12 of the total amount is distributed

1. Equalization base is the sum of the lesser of the RCL If a school district has cash flow problems, it can apply to
or DSL, District Additional Assistance Allocation and the Superintendent of Public Instruction for early payments
District Type 03 tuition-out charge (if applicable). on the schedule shown above. Advance payments will be
made if state funds are available and if approved by the State
2. District Preliminary Assessed Valuation (A.V.) - Treasurer, the Director of the Department of Administra-
Including valuation of in-lieu contributions. tion and the Superintendent of Public Instruction. In no
event is a school district allowed to receive more than
3. Qualifying Tax Rate (QTR) for 2021-22 is $1.7694 three-fourths of its total apportionment before May 1 of
for elementary level students and high school students. the fiscal year.
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