In 1994, Arizona’s system of school capital finance was declared unconstitutional because it failed to conform to the state constitution’s “general and uniform” clause. That system relied on the secondary property tax, driven by the property wealth of a school district, and general obligation bonding. In 1996, the Arizona Superior Court imposed on the state a deadline of June 30, 1998 to develop a constitutional system of school capital finance or risk closure of K-12 public schools. On July 9, 1998 Governor Jane Dee Hull signed legislation that dramatically reformed the way K-12 schools are constructed in Arizona. This ended the four-year legal and legislative battle and established Arizona as the nation’s school finance reform leader. This legislation/law is known as Students FIRST (Fair and Immediate Resources for Students Today). On November 18, 1999, the Board adopted Building Adequacy Guidelines that now serve as the minimum standards for existing and new school facilities in Arizona.
While this phase of the program has since been completed, the Students FIRST law established a deficiencies correction fund for the purpose of correcting deficiencies in existing school facilities. The School Facilities Board was charged with adopting rules establishing minimum school facility guidelines, assessing school buildings against these guidelines, and providing monies to bring the buildings up to the guidelines. By law, existing deficiencies were to be completed by June 30, 2004.
The Students FIRST law established a building renewal fund for the purpose of maintaining the adequacy of existing school facilities. These monies can be used for major renovations and repairs of a building, for upgrades to building systems (e.g. heating, cooling, plumbing, etc.) that will maintain or extend the useful life of a building, and for infrastructure costs. Monies from this fund may not be used for new construction, remodeling interior space for aesthetic purposes, exterior beautification, demolition, soft capital items, or routine maintenance. A building’s square footage, age, and student capacity are used in the building renewal calculation. The School Facilities Board distributes building renewal monies to school districts in two equal installments in November and May of each year.
New School Facilities
The Students FIRST law established a new school facilities fund for the purpose of constructing new schools to meet the minimum adequacy guidelines. The criteria to determine district eligibility for monies from the new school facilities fund are based on annual evaluation and approval of district enrollment projections and the additional square footage that will be needed to maintain adequacy standards in a district. The School Facilities Board distributes new school facilities monies to school districts based on the following formula: (number of students) x (square footage) x (cost per square foot) = allocation. Land costs are funded in addition to formula funding for new construction.
Students FIRST (Fair and Immediate Resources for Students Today) is a capital finance program funded by appropriations from the State General Fund. The program is administered by the School Facilities Board, which consists of nine voting members appointed by the Governor; in addition, the Superintendent of Public Instruction serves as a non-voting member. The Board is charged with administration of three capital funds: a) Building Renewal, b) Deficiencies Corrections, and c) New School Facilities.