Arizona’s public schools are the beneficiaries of more funding than ever before. But their teachers and students are not. Instead, school districts have diverted too much of their taxpayer funding toward questionable and inefficient expenditures. Proposition 320, which would require districts to devote at least 60% of their operation budgets to instruction, would help reverse this trend.
The nonpartisan Arizona Joint Legislative Budget Committee (JLBC) just issued a new report estimating that Arizona public schools are now receiving a record-breaking $15,597 annually per student as of the 2026-2027 school year. This is up from $7,119 per student in 2001.
School funding has skyrocketed, but teacher pay has fallen behind.
Obviously, a dollar today is not what it once was, but even adjusting for inflation, this means Arizona’s public schools now receive roughly $1,800 more per student, or $36,000 per classroom of 20 students, in real dollars, than they did in 2001. And these figures understate the increase to districts, as today’s average is weighed down by the far lower-funded public charter schools that serve over 20% of Arizona public school kids at substantially lower cost per pupil. The per pupil, inflation-adjusted funding increase among district schools (excluding charters) is approximately $2,500 per kid, or $50,000 per classroom of 20 students. Yet despite this windfall for school districts, average teacher pay is down by thousands of dollars per teacher after accounting for inflation over the same period. [i]
Indeed, the Arizona Auditor General reports that the state’s average teacher pay was $37,176 for the 2000-2001 school year, which translates to $72,067 in today’s dollars. Yet according to the Auditor General’s FY 2025 school district spending report (the latest year available), teacher pay in Arizona had dropped to $65,613 as of FY 2025.
Dollars Go to Lavish Trips, Surging Superintendent Salaries
So what happened? Did schools simply hire more teachers with the extra dollars—rather than increasing the average salaries of their existing workforce—in order to lower student-teacher ratios?
No. Student-teacher ratios are unchanged, ticking imperceptibly from 18.0 to 1 as of 2001 to 17.8 to 1 twenty-five years later.
What did happen, as captured by the state Auditor General, was that Arizona schools took off on a similar trajectory seen too often throughout the country—surging their spending across their operations via disproportionately non-instructional uses.
Recent highlights of such behavior include a major Arizona school district spending half a million dollars sending school employees to Caesar’s Palace in Las Vegas before promptly cutting bus services for its students. Or another district paying its superintendent nearly $500,000 in salary and benefits while he pushed for spending $80 million of taxpayer resources for a domed high school football stadium. Or another district showering its elementary school superintendent with over a million dollars in excess compensation likely in violation of the state’s gift clause.
Meanwhile, other districts like the Baboquivari Elementary School District have recently been held up as examples of why voters should oppose Prop 320. Opponents of the measure suggest that districts like Baboquivari face transportation and logistical challenges that prevent such an emphasis on instructional spending. And yet just two years ago, the state Auditor General’s performance audit blasted the district for irresponsibly spending over $300,000 on a single 2-day out-of-state conference for employees, amid a bevy of other questionable practices.
Worse, according to the Auditor General, even setting aside the nearly $3,000 more per student that Baboquivari spends on transportation even compared to its rural peers, Baboquivari also spends over $1,600 more per student on administration and over $2,000 more on plant operations than its rural peers. Thanks to such governance, Baboquivari spends just 32% of its operational budget on instruction—a budget that is now nearly $30,000 per student a year.
Arizona’s Administrative Bloat Problem
Even setting aside the various egregious and indefensible examples of district misspending identified above, such instances are unfortunately part of a larger systemwide trend and problem.
In 2000, Arizona voters approved Prop 301 to increase funding for classroom instruction in Arizona through a new sales tax surcharge and the creation of the “Classroom Site Fund.” Yet almost immediately, districts responded by decreasing the share of funding they put toward classroom instruction, betraying voters who volunteered to tax ourselves with what is nearly a billion dollars a year in extra sales taxes. Indeed, after voters approved that measure to boost funding for instruction, the Auditor General began ringing alarm bells over the drop in classroom spending:
One reason the declining classroom dollar percentage merits attention is that it is the opposite result of what was expected when voters authorized Proposition 301, which was intended to increase classroom spending…primarily for increasing teacher pay…”
Arizona’s declining classroom dollar percentage indicates that many districts are likely using these CSF monies to supplant other district monies, which is a violation of Arizona Revised Statutes §15-977(A).
If districts had continued spending their non-CSF monies in the classroom at the same rate they did prior to receiving CSF monies … teacher salaries would have been about $7,500 higher, on average
Indeed, as soon as one year after the implementation of the Classroom Site Fund, the Auditor General found that:
Declining classroom dollar percentages were associated with increases in spending for administration and with declining use of non-Proposition 301 monies for instructional salaries. Districts with the greatest decreases in classroom dollar percentages increased their per-pupil administrative expenditures from non-Proposition 301 monies at over eight times the per-pupil administrative increase of districts with the greatest increases in classroom dollar percentages.
Don’t Believe the Misinformation on Special Needs Spending
Opponents of Prop 320 have tended to shy away from overtly defending such administrative bloat, but they have argued that rising special education needs explain the dwindling share of funds that now go to instruction.
There is no doubt that an increased share of students being diagnosed with special needs can necessitate additional services from certain specialist positions such as speech pathologists that fall outside the instruction category. But opponents of Prop 320 seem committed to skipping over certain inconvenient points that complicate their narrative on this issue. First, special education teachers and teachers aides in general are counted as instructional spending under the Auditor General’s definition (based itself on federal classifications).
Second, in reviewing districts’ dramatic shift away from instructional spending toward other categories such as “support services,” the nonpartisan Common Sense Institute recently cast doubt on the claim that districts’ altered spending priorities primarily reflect changes in student makeup:
Student support’s share of the budget has little to no correlation with a district’s special education and English learner enrollment – factors that should drive a greater need for student support services.
CSI finds a clear, positive relationship between the share of spending devoted to instruction and student outcomes, even after controlling for other important factors. Conversely, devoting a higher share of spending to student and instructional support – the two areas that have seen the most growth over the last two decades – is associated with worse outcomes for students.
Indeed, while the Auditor General has acknowledged districts’ claims of increasing special education students, the watchdog agency also noted as early as 2009 (in response to the declining classroom instructional spending percentage):
Districts appear to have switched from in-house employees to contracted positions for instructional and student support services. According to district officials, these contracted specialists are more costly.
In short, districts are not simply passive bystanders of forces outside their control. Rather their administrative and programming decisions have directly driven their budgeting outcomes and what’s left over for instruction.
For example, consider the Scottsdale Unified and Deer Valley Unified School Districts. While both are large, urban districts in Maricopa County that spent roughly 63% of their operating budgets on instruction back in 2004, Deer Valley has maintained a dramatically higher share of its operating budget (nearly 60%) on instruction, compared to Scottsdale, which slashed its share all the way to 54%. One might think that Scottsdale’s comparatively bloated spending on student support and instruction support is the result of student need. And yet Scottsdale has a lower rate of special education students, a lower poverty rate, and an equal rate of English language learners compared to DVUSD.
Prop 320 Ensures Dollars Go to Classrooms
Arizona public schools are receiving tens of thousands of dollars more for every classroom than they did in 2001, even adjusting for inflation. Yet from exorbitant superintendent salaries to wasteful spending on vacant or underused facilities, to bloated payrolls and contract services, too much of this funding has been rerouted away from what students need: high-quality instruction.
Fortunately, Arizona voters have a chance this next week to help correct this problem by passing Prop 320. Hopefully we will take it.
[i] JLBC estimates $15,597 in per student funding for Arizona public K-12 education as of FY 2027. Prior JLBC “All Funding” reports show $7,119 of funding per student as of FY 2001. Adjusting the latter figure for inflation using the U.S. Bureau of Labor Statistics CPI Inflation Calculator (August 2000 to August 2026) produces an inflation-adjusted FY 2001 funding level of $13,800.
The resulting $1,800 increase in per pupil funding between FY 2001 and FY 2027 also understates the increase in funding for Arizona school districts, who now receive approximately $1,000 more per student than the statewide average (which includes districts and charters). A comparison of district revenues per student in FY 2001 vs. FY 2025 as reported in the Superintendent’s Annual Financial Reports (the most recently available) yields district per pupil spending of $7,179 in FY 2001 vs $15,772 through FY 2025. Adjusted for inflation, this translates to an increase from $13,078 in FY 2001 to $15,772 in FY 2025 (August 2000 to August 2024), or roughly $2,700 per student.
The Arizona Auditor General reports that average teacher pay was $37,176 in FY 2001. Adjusting for inflation using the U.S. Bureau of Labor Statistics CPI Inflation Calculator (August 2000 to August 2026), this translates to $72,067 in FY 2027. Yet according to the Auditor General FY 2025 school district spending report (the latest year available), teacher pay in Arizona had dropped to $65,613 as of FY 2025.
