Abstract

In April 2010, Getting AHEAD leadership (Making Opportunity Affordable [MOA] Arizona) engaged MGT of America, Inc. to develop a new higher education funding model for the State of Arizona. The project was divided into three phases, and this report for Phase 1 provides several preliminary funding model options for stakeholder discussion. MGT interviewed members of community college Governing Boards and the Arizona Board of Regents (ABOR), college and university presidents and staff, State legislative leadership, gubernatorial and legislative staff, members of the business community, and other key higher education stakeholders. In addition to gathering input from stakeholders, MGT reviewed other states' models related to funding formulas and incentive or performance funding leading to increased numbers of college and university “completers.” MGT reviewed ABOR's articulated 2020 Vision goals, community college strategic plans and mission statements, relevant statutes, and Constitutional provisions related to the colleges and universities. MGT consultants regularly met with members of the Getting AHEAD Higher Education Finance Committee. The community colleges' primary property tax levies are established by their elected governing boards within constitutional and statutory constraints. State law provides for annual financial assistance to community colleges, subject to the annual appropriations process.

Table of Contents

Abstract1

Introduction3

Arizona Constitutional Provisions, Funding Statutes and Funding Formulas4

Schools5

University Funding7

Discussion and Analysis8

Conclusion9

Works Cited11

Arizona School Funding

Introduction

State funding for the schools varies significantly from district to district, in part due to the size of the districts which range from 1,050 FTSE for Gila (a provisional community college district) to 84,995 for Maricopa Schools. The number of students attending Arizona's schools has increased over 52 percent since FY 2001. State appropriations for the schools totaled $132.4 million in FY 2010 and FY 2011, $2 million less than total state appropriations in FY 2001 (Baker, 679); funding per student has decreased from $1,376 in FY 2001 to $892 per student in FY 2011. In FY 2011, schools also received $615.4 million from local property tax revenues. Arizona schools are subject to specific constitutional constraints on their property tax levies. From the combination of state appropriations and local property tax revenues, schools received $749.8 million, or $5,037 per student.

The third major source of funding for the schools is tuition and fee revenues. These three main sources of revenue are what each college has available to provide services to students. In FY 2011, schools received $297.2 million in student tuition and fees, and a total of $1.045 billion from the three main sources of revenue, or an average of $7,038 per student. Arizona's three universities - Arizona State University, Northern Arizona University and the University of Arizona- receive funding from the state general fund and from tuition and fee revenues. In FY 2011 and FY 2010, the three universities received $873.1 million in state appropriations, or $6,907 per student in FY 2011, compared to $758.2 million in FY 2002, or $7,849 per student. From tuition and fees in FY 2011, the universities are projected to receive $1.258 billion, or $9,953 per student. From the two main sources of revenue for the ...