ANSWERS TO QUESTIONS ABOUT FUSD’S 2018 OVERRIDE RENEWAL
What is a Maintenance and Operations (M & O) Override?
Overrides play an important role in public school finance. School Districts in Arizona and the communities they serve are able to provide important educational opportunities beyond the State funding. Overrides have allowed FUSD to continue to offer the programs important to the community such as; full day kindergarten, art at all grade levels, music and physical education teachers, and affordable athletic participation. A renewal of Override funds allow the District to continue funding programs and services for our students at the present level without raising property taxes.
How will your taxes be affected?
Tax rates will not be increased because of a “Yes” vote for continuation. The annual levy for this Override is projected to range from $8,500,000 to $8,800,000 over the five year period, and property valuations are projected to increase considerably over that period, so the tax rate will continue to be approximately $.70 per $100 of Assessed Valuation. Phrased another way, an owner with property worth $100,000 now pays $70 per year for quality education and will most likely pay no more than $70 per year the next five years.
This is a renewal of the Override authorized in November 2014. Overrides in Arizona must be renewed every five years or they begin a two-year phase down with a complete elimination after the seventh year if not renewed. The existing Override is scheduled to begin a phase down in the 2019-2020 year unless renewed by voters.
Has the District been operating under an Override?
Yes, the District has received Override funding from Fiscal Year 1996 to the present time. The current 15% Override was approved by voters in November 2014.
How does Arizona fund schools?
Arizona funds its schools based on the number of students and the miles students are transported. It is formula based funding and a school district’s budget limit does not increase or decrease if the assessed value in the district changes. Arizona provides a specific dollar amount per student for maintenance and operational expenses (salaries, benefits, supplies, services, utilities) and for capital (furniture, equipment, technology, vehicles, textbooks, library books, instructional aids). The capital allocation has not been fully funded for several years.
The funding support level provided by Arizona is inadequate. The low level of State support has placed Arizona at 48 out of 51 states (includes Washington D.C.) in operational spending for FY 2016-2017 in a nationally recognized report.
How much does the District have to cut its budget if the Override fails?
If the Override fails, the District will need to reduce its budget by approximately $2.8 million for each of the next three years for a total reduction of $8.5 million. For a perspective, $8.5 million pays for 165 teachers.
Over the five year life of the Override the District would lose $42.5 million without this funding.
Where will the cuts come from?
Because of enrollment reductions and State reductions, the District made significant cuts from Fiscal Years 2011-2014. While reducing operational funds by $13,600,000 during that four year period, every effort was made to protect classroom concerns, however, if the Override renewal is not successful it will no doubt eventually cause increased class sizes and reduced spending for programs not funded by the State. The District spends 85% of its M&O budget on salaries, benefits and utilities, so lack of this funding will inevitably mean reduced staffing levels and services to students.
What is the difference between a bond and an override?
A bond allows the district additional funding to use for capital items. Capital items include new buildings, additions to buildings, land, school buses, renovations to buildings, furniture, equipment and technology. The bond approved in November 2012 has allowed the District to survive the State cutting 85% of the regular Capital Outlay allocations and the total of approximately $2.5 million annually of building renewal funding.
An Override is for operational expenses including salaries, benefits, supplies, purchased services, utilities and insurance. An override allows a district to exceed its budget by 15%, and without it the gains made on increase staff salaries will be eroded.
Are the funds received as a result of the Red for Ed movement enough to eliminate the need for FUSD Override Funding?
The State funds resulting from the Red for Ed movement were meant to bring teachers and other staff salaries to a level that recognizes their contributions and investment, and enables FUSD to hire and retain the best educational professionals and support staff. For FUSD teachers, these long awaited funds are only a start in bringing them nearer the State and National salary averages. They are still several thousand dollars below National averages. The addition of these funds from the State will help to address salary discrepancies. The resulting Red for Ed funds will not help keep class sizes low or support programs not required by the State of Arizona; but which are valued by the Flagstaff community.
Full day kindergarten, art, music, and physical education at the elementary schools, and extensive STEM and advanced placement classes in the secondary schools are desired in Flagstaff. Override funds are what keeps our class sizes at a reasonable level and also help to keep competitive salaries that contribute to a quality education.