Arizona Education Funding is a Game of Monopoly

Arizona’s education funding system looks a lot like a shortened game of Monopoly.

In Monopoly, the player who acquires the most valuable properties gains an advantage that compounds over time. In a shortened version of the game, the properties are dealt at the beginning, and some players simply get a better hand.

Arizona’s school districts start with a similarly uneven hand.

Wealthier communities have higher property values and, consequently, a larger local tax base. A district with a strong property-tax base has options that one with a weaker base does not. Where a student lives can help determine how much money their school district can generate.

Unlike players in Monopoly, public schools don’t get to flip the board and walk away. They have to educate every child who walks through their doors, regardless of the funding and support they receive.

The State Has Already Been Told the Board Is Broken

This isn’t a new problem.

In 1994, the Arizona Supreme Court ruled in Roosevelt v. Bishop that the state’s school financing system was unconstitutional because it created substantial disparities in school facilities. The problem wasn’t simply that some communities were wealthier than others. The Court found that the state’s reliance on local property wealth was itself producing those disparities.

Three decades later (after another lawsuit), a Maricopa County Superior Court judge ruled that Arizona’s current school facilities funding system is still unconstitutional and ordered the state to fix it. The order requires the state to address existing deficiencies, accommodate growth, maintain adequate facilities, and avoid large disparities between districts. He gave them until February 2027 to comply (including 90 days for an appeal.)

GOP Senate and House leaders appealed, and the case now sits in the appellate courts awaiting scheduling or decisions. Meanwhile, students are attending schools with aging HVAC systems, deteriorating roofs, inadequate classrooms, and facilities districts cannot reasonably afford to replace on their own.

But facilities are only one piece of the puzzle.

Prop. 123: Where Did the Money Go?

Remember Proposition 123 that was approved by Arizona voters in 2016 as part of a settlement of a school funding lawsuit?

It increased the annual distribution from the State Land Trust Permanent Fund to public K-12 schools from 2.5% to 6.9%, providing roughly $300 million a year for education.

There was a catch: Prop. 123 was temporary.

The enhanced distribution expired in 2025, and the rate reverted to 2.5%, creating roughly a $300 million annual funding gap. The Legislature has used general-fund money to temporarily backfill some of the loss, but lawmakers have not agreed on a permanent replacement, opting instead to continue to fiddle, while Rome burns.

The AEL: You Can Have the Money. You Just Can’t Spend It.

Then there’s Arizona’s Aggregate Expenditure Limit.

The AEL is a constitutional limit on how much school districts can spend from certain local revenues. The formula traces back to a 1979–80 spending baseline and is adjusted for inflation and student growth.

That creates an unusual situation: a district can have money available and still be told it cannot spend all of it.

When the AEL threatens large spending reductions, the Legislature has repeatedly stepped in with temporary overrides.

Patch. Override. Repeat.

It’s another feature of the game that would be funny if billions of dollars—and hundreds of thousands of students—weren’t involved.

The rules stay on the books. The GOP-led Legislature keeps making temporary exceptions while demanding concessions. Do they really want to solve this one?

Prop. 320: Now We’re Going to Tell You How to Spend It

Then there’s Proposition 320 which Arizona voters will consider in November.

The measure would require certain large school districts to spend at least 60% of their operational spending on “direct instructional expenses.” It applies to districts with at least 7,500 students and districts operating in Maricopa, Pima, and Pinal counties (those counties with a population of over 500,000.)

On its face, that sounds reasonable.

Arizona has a serious teacher retention and vacancy problem—almost double the national average. If more money reaches teachers and classrooms, shouldn’t that be a good thing?

Yes, but that is far from the whole story.

A school isn’t just teachers and classroom aides. It also needs nurses, counselors, speech pathologists, social workers, librarians, special education personnel, technology staff, custodians, transportation workers, administrators, and others.

A teacher cannot teach if the school cannot transport the student. A special education program cannot function without specialists. A school cannot operate without electricity, technology, payroll, maintenance, or food service.

And those functions don’t currently qualify as “direct instructional expenses.”

In FY2025, the Arizona Auditor General reported statewide classroom spending at 68%, while instructional spending accounted for 52.1% of that. Prop. 320 would establish a new 60% requirement for direct instructional expenses, potentially forcing districts to move money from other parts of their budgets to meet a number that hasn’t even been defined yet.

And there are consequences. By year four, districts could lose up to 100% of their Classroom Site Fund allocation for failing to meet the target. Those funds pay teachers, reduce class sizes, support specialists such as social workers, counselors, and therapists, and fund tutoring, teacher development, dropout prevention, and other programs.

Improving educational outcomes isn’t just about paying teachers more. It’s about providing students what they need.

The question isn’t whether teachers deserve more resources. They do.

The question is: Which resources can a district afford to give up to meet the target and which students will be hurt by the shift?

A Complicated System that Perpetuates a Lack of Accountability

This is what makes Arizona’s education funding system so difficult to understand—and so easy to manipulate politically.

There isn’t one funding system. There is a collection of systems layered on top of one another: local property wealth, state equalization, capital funding, Prop. 123, the Aggregate Expenditure Limit, Classroom Site Funds, teacher compensation, charter funding, Empowerment Scholarship Accounts, federal funding, and now Prop. 320.

Each has its own rules, formulas, restrictions, and political constituency.

The result is a system where it is entirely possible to argue that more money is being spent on education while a district says it doesn’t have enough money to replace an air-conditioning system, hire a nurse, retain a teacher, or maintain an aging building.

Those statements aren’t necessarily contradictory. They’re often describing different pieces of the same funding puzzle.

That is why education funding debates so often become debates over accounting rather than outcomes.

We argue about which bucket the money is in, which formula applies, which fund can be used, which category an employee belongs to, which constitutional limit has been triggered, and which temporary override is available.

Meanwhile, our students’ and our communities’ and state’s futures are not maximized.

It All Comes Down to Who Owns the Board.

Republicans have held continuous control of both chambers of the Arizona State Legislature since 1993. Not surprisingly, that is the same year when charter schools were authorized and in 1994, the open enrollment policy in our public schools. There can be no question about “who owns the board.”

Their continual tax cuts and embrace of unaccountable vouchers are draining funding that should be going to public schools, which still serve more than one million Arizona students. Instead, those schools are forced to soldier on with inadequate resources in an increasingly hostile environment—one where privatization is promoted by lawmakers and even the Superintendent of Public Instruction, culture wars make public schools flash points, and finding quality teachers is increasingly difficult.

Arizona doesn’t need another patch to keep the game going. It needs a school finance system designed around a simple principle: students should have access to a quality public education regardless of the property wealth of the community where they live.

That will require more than moving money from one bucket to another. It will require confronting the underlying inequities in how Arizona raises, distributes, and controls education funding—and creating a system that is transparent, predictable, flexible enough to meet local needs, and equitable across districts.

It will require lawmakers to think about the next generation, not their next election.

And it will require voters to draw the line between what lawmakers they elect and what results they truly want.