School Finance Reform Initiative

Guiding Principles & Framework

We, the Arizona Business and Education Coalition (ABEC), believe that our public schools are the foundation on which the state's economy and its citizens' quality of life rest. Whether or not we attended public schools ourselves or send our own children to public schools, we interact each day in a world where the outcomes of our public education system are readily apparent. Throughout our state and our country, public schools educate countless children who grow up to be engaged, contributing members of their communities, who teach our children, run our corporations, and provide numerous goods and services. At the same time, we know that many students are leaving public schools each year without graduating from high school or with minimal skills and competencies.

The current system for financing Arizona's public schools, designed almost thirty years ago, set out to equalize spending disparities across school districts in the state while curbing increases in local property taxes. Over the years, this system has been layered with many additions, caveats and short-term fixes that became long-term funding strategies. The result is a complex, often impenetrable, system of financing public schools that does little to promote the work of schools: to teach all students to increasingly higher levels of learning. It is irresponsible for us, as a state, to continue on this path.

The challenge now is to design a school finance system for the 21st Century; one that supports high levels of learning for all students, regardless of geographic location, neighborhood wealth, or whether they choose to attend a traditional or charter public school. The challenge now is to recognize, with word and action, that the money spent on Arizona's public schools is not just an expenditure, but our most critical investment.

This document puts forth a set of guiding principles and a framework for the design of a school finance system that supports schools in their responsibility of educating all students to increasingly higher standards of learning. The new system must remove barriers to student progress, create incentives for the effective and innovative use of resources, emphasize the importance of quality instruction, and challenge all stakeholders to rethink the role of K-12 education in relation to our other social institutions. The design of a new comprehensive system of school finance will be undertaken through the work of the School Finance Reform Initiative (SFRI) and will examine all aspects of public school funding, including, but not limited to, revenues, capital and facilities, state aid, barriers to achievement, and compensation.

The guiding principles and framework articulate the values that ABEC believes should be reflected in our public school finance system and are intended to provide a lens through which SFRI participants can judge the merits of any and all policy proposals they will consider during this process. Our goal is that the result will be a set of policy recommendations that efficiently support all public schools and students, make room for innovation, and allow educators to deploy the best possible educational strategies to teach Arizona's children.

PURPOSE STATEMENT: Arizona must redesign its school finance system so that it supports increasingly higher levels of learning in all public schools.

ABEC BELIEVES that Arizona's comprehensive public school finance system should exhibit

1. PRINCIPLE: FAIRNESS for all students and taxpayers
   FRAMEWORK: revenue and funding structures that
   1. minimize the relationship between property wealth and resources for students;
   2. minimize the relationship between the type of school attended and resources for students;
   3. take into account the needs of students with unique challenges; and
   4. create balanced and steady revenue streams for education.
2. PRINCIPLE: SUFFICIENT RESOURCES to meet expectations for student achievement
   FRAMEWORK: a funding level that
   1. allocates enough resources for schools to educate all students to the expectations stated in the state and federal school accountability system; and
   2. allocates enough resources for schools and districts to meet all state and federal statutory requirements.
3. PRINCIPLE: FLEXIBILITY for districts and schools in the use of resources
   FRAMEWORK: a funding structure and enabling statutes, rules, and regulations that
   1. provide most resources in a way that allows for maximum flexibility, creativity, and experimentation by districts and schools; and
   2. tie flexibility to a set of meaningful fiscal and academic accountability measures.
4. PRINCIPLE: REWARDS innovation and efficiencies
   FRAMEWORK: a funding structure that
   1. promotes rewards to individuals, groups, or schools that show significant measureable growth in student learning; and
   2. removes barriers to the effective and efficient use of resources.
5. PRINCIPLE: TRANSPARENCY in all aspects of the system
   FRAMEWORK: a comprehensive public school finance system that
   1. provides accessible, meaningful, and useful information to the public and all stakeholders on how money is spent; and
   2. is open to analyses and publication about effective uses of resources for increasing student learning.