According to Arizona Tax Research Association (ATRA), the 20% pay increase voted on by the legislature and signed by Governor Doug Ducey, drastically increases the Arizona teacher pay ranking.
Funding challenges remain, however, including the "spread" of the system, rising employee costs such as pensions and healthcare. The Special Education student population has outpaced overall student growth and the modern programs cost more than funding allows. There are also demographic challenges, according to the Census Bureau (CB) with fewer taxpayers and low personal income per K-12 student.
For example, as noted in an ATRA special report from January 2017, Arizona ranks #11 in the state with 24.7% of its population under 18 years old.
Arizona also ranks #12 (15.4%) in the nation as far as a population aged 65 and older.
Result? That drops Arizona's rank to #49 (60.2%) in percentage of residents that fall within the working ages of 18-64, representing "...the engine of the tax base."
States that are frequently cited as having high K-12 per pupil expenditures have low percentages of youths and retirees, and a higher percentage of working age adults.
Another important thing to remember is that the Arizona state government does not dictate teacher pay - that is decided at the district level. ATRA writes, "As is the case nationwide, teaching in Arizona has never been lucrative. To some extent, Arizona public schools followed nationwide trends and used incremental general fund dollars to expand student services such as teachers’ aides, medical staff and increased special education staff. However, Arizona did not aggressively engage in shrinking class sizes relative to such efforts in other states. To some degree, Arizona traded lower class sizes for higher wages."
ATRA recognizes the challenges and benefits presented by open enrollment and school choice, stating, "This is not to suggest open enrollment or school choice has been deleterious to Arizona’s K-12 system as there are obvious long term benefits associated with improving educational outcomes. However it is important for policymakers to understand that a more dynamic, less centrally planned system has had profound impacts on a number of important financial realities including teacher pay."
Acknowledging the need for change, ATRA concludes, "The ultimate solution should provide a stable trajectory which can provide predictability for taxpayers and education providers."
Here is the press release from August 3, 2018 regarding the budgetary changes enacted by the 2018 Legislature:
The State of Arizona recently responded to demands for higher teacher pay with a plan to increase base K-12 funding to provide a 20% teacher pay increase by the fall of 2020. ATRA analyzed Arizona teacher pay earlier this year, providing relevant facts and context to the policy issue. With this dramatic taxpayer investment, Arizona’s relative teacher pay ranking shifts considerably. This release also highlights conclusions from our K-12 funding studies.
Arizona Teacher Pay Update
20% increase over 3 years jumps AZ average pay rank from #40 to #16
o Using NEA data, AZ avg pay projects to ~$56,600
o This is adjusted for cost of living (COLI), unadjusted rank would be #26
o Assumes every other state grows pay 2% in each of the 3 years
What Are Arizona’s K-12 Funding Challenges?
Considerable decentralization of AZ’s public school system
o Declining/flat enrollment in most districts creates budget pressure
o Massive growth in charters & open enrollment ‘spread’ the system
Rising employee costs have limited pay raises
o Total pension costs have increased 4X since early 2000’s from 6% to 23%
o Rising healthcare costs (example: State of AZ health plan up 21% since 2015)
Rising costs of special education (SPED)
o SPED population has outpaced overall student growth by a factor of four
o Modern programs cost more than formula funds; costs placed on budget
Demographic challenges (few taxpayers)
o AZ ranks #49 in % population age 18-64 (Census Bureau, CB)
o Only state ranking in top 15 for both % young & % old (CB)
Wealth in Arizona per student
o AZ ranks #45 in nation for total personal income per K-12 student (CB)
o AZ ranks #19 for total K-12 spending per $1000 of personal income (NEA)