Proposition 123 holds millions in the balance for Scottsdale Schools

The Scottsdale Unified School District Governing Board Tuesday, Jan. 12 discussed the options that may present themselves after a $5 million windfall that could be realized — a result of potential passing of Proposition 123.

Proposition 123, if voter approved, will be a settlement resulting from the lawsuit Cave Creek v. DeWit, for the Arizona Legislature’s failure to adjust all components of the K-12 Base Level for inflation pursuant to A.R.S. §15-901.01, which was enacted in Proposition 301.

This settlement in Proposition 123 gets over $530 million new dollars to schools over the next two years, according to the Arizona Schools Boards Association. In total, the resolution could provide up to $3.5 billion over 10 years. Schools will receive about $298 million dollars in base level reset and additional funds this school year in June 2016.

Then, schools will receive another $300 million new dollars for fiscal year 2016-17, which begins July 1.

During the board meeting, Scottsdale Schools Chief Finance Officer Daniel O’Brien presented a draft of what the funds could go toward this fiscal year and the following year.

“We used the estimated number that the JLBC has published,” Mr. O’Brien said in a Jan. 13 written response to e-mailed questions. “The amount will be calculated using student count.”

Based on these estimates, Scottsdale Schools would receive $5 million for both fiscal year 2016-17 and 2017-18.

“This is just a presentation to get the discussion started,” said Mr. O’Brien during his presentation to the board. “I am sure there will be lots of discussion throughout the spring and what’s the best way to use these dollars, with both the board and employee groups and administrators and other members of the district.”

Mr. O’Brien laid out that for fiscal year 2015-16, Scottsdale Schools expenses could include:

  • Capital funds for curriculum, facilities and tech — $1.75 million
  • Employee retention recognition (for 7+ years) — $1,117,000
  • 2 percent equivalent 1-time pay (certified) — $1,363,846
  • 2 percent equivalent 1-time pay (classified) — $493,536
  • 2 percent equivalent 1-time pay (administration) — $265,216

In fiscal year 2017-18, through the formula process, the adjustment to the base level could potentially allow the district to increase its override, according to Mr. O’Brien, which would give the district an additional $700,000, bringing the total to $5.7 million.

The district does not have the option to increase the override of fiscal year 2015-16, he stated.

“As we’ve gone over this, as the discussion started, administration and myself jotted down some of the things that we might have reduced over the years,” said Mr. O’Brien. “We kind of whittled through that list, looked at it a couple of times, talked about it and this is what SLT cabinet came up with as a starting point to start the discussion.”

Fiscal year 2017-18 expenses could include:

  • SRO Funding — $300,000
  • Certified –$2,167,846
  • Pay raise (2 percent equivalent) — $1,363,846
  • Horizontal movement — $404,000
  • One additional contract day for teachers — $400,000
  • Classified pay raise (3 percent equivalent) — $740,340
  • Administrative pay raise (2 percent equivalent) — $265,216
  • Special Education director position — $96,000
  • Program innovation – elem world languages — $100,000
  • Instructional resource asst’s (media center) – salary adjustment — $30,000
  • Add (2) Psych. intern/Psych support positions — $160,000
  • Capital funds curriculum, facilities and technology — $840,000
  • Enrollment funding impact/current year funding (est.) — $600,000

If Proposition 123 passes in May, schools may not receive the same amount every year, and the Land Trust Dollars are only good for 10 years, Mr. O’Brien said.

The State Land Trust would be funding about 55-60 percent of the money, with the rest being drawn from the Legislature’s General Fund, according to the ASBA website.

In addition, there are contingencies known as triggers. In certain economic conditions, these triggers will protect the General Fund or the trust, stated the ASBA website. However, in the event of any trust or economic trigger, the base level amount will be reset to account for inflation.

The base level is the base per-pupil funding amount used in the K-12 school funding formula. The base level is then multiplied by factors to generate the additional funding based on student grade level, special education designations and teacher experience, among others, ASBA website states.

The Arizona Legislature set the 2015-16 base level at $3,426.74.

“This is still kind of not known, and a lot to think about,” said Mr. O’Brien.

After presenting numbers to the board, Governing Board Vice President Barbara Perleberg asked what happens if Proposition 123 does not pass?

“If Proposition 123 doesn’t pass, then we have to kind of wait for two things. One, to see if the board will place an initiative on the ballet for the capital override,” said Mr. O’Brien. “Then, wait to see if it passes — if both do not pass then we will have a real need for a real difficult discussion with the board on where we pay for curriculum and technology.

The potential Proposition 123 is a good way to start increasing school funding, said Mr. O’Brien.

“This could mean approximately $5.7 million dollars for the Scottsdale Unified School District,” Mr. O’Brien said. “That would allow us to increase compensation, restore and increase District offerings ensuring student success.”

Northeast Valley News Editor Melissa Rosequist can be e-mailed at or can be followed on Twitter at

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