This document provides legislative updates and budget information relevant to Arizona school districts. Key points include: - The FY2017 base funding level per pupil is $3,635.64 without teacher compensation adjustments and $3,681.09 with adjustments. An additional $50 million will be distributed based on weighted student counts. - Proposed changes to the FLSA may raise the salary threshold for exempt employees from $23,660 to $47,476 annually as of December 1, 2016. Teachers remain exempt. - Revisions to laws address JTED funding restoration, school property sales and leases, audit requirements, special education budgeting, and adjacent ways project approval thresholds.

1. Legislative Hot
Topics/Updates
for Arizona School Districts

2. Legislative Updates
• 2016 Budget Updates – WITH 123
• Base Level – increases to $3,600
• Base Level with Teacher Comp - $3,645
• Increase of $120.44 per pupil
• Additional $50M distributed on student count
• Distributed using weighted student count from Classroom Site
Fund
• Salary increases can be made without revising contracts
• Budget must be revised by June 30, 2016

3. Legislative Updates
• 2017 Budget Updates – WITH 123
• Base level $3,635.64 (without teacher comp), $3,681.09 (with
teacher comp)
• Additional $50M distributed on student count
• Distributed using weighted student count from Classroom Site
Fund
• Transportation Support Level – 0.989% increase
• $2.09 and $2.56 per mile
• DAA - $113.5M in additional cuts
• Projected FY17 is 15% of formula

4. Budget and Finance Updates
• ASRS – 11.34% Retirement, .14% LTD
• ASRS – ACR – 9.47%
• Prop 301 Per Pupil - $332
• QTR - $2.0793, $4.1586
• Health Insurance Increases?
• Salary Increases?

5. Legislative Updates
• SB1525 - JTED Restoration and Reforms
• Defines passing score
• Defines instructional time focus
• Emphasis on extra funding for instruction and equipment
• Original cuts reduced funding from 100% to 92.5%
• Cuts were restored in FY17
• Section W. is amended to prohibit a district from requiring
students to generate a 1.0 ADM before enrolling and
attending JTED courses
• Base Support Level calculation provided in 15-943.02 will be
based upon current year count

6. Legislative Updates
• General effective date: August 6, 2016 unless otherwise noted
• Emergency clauses
• Statute includes a provision if a bill has a budget impact, it is
rolled back to the start of the fiscal year

7. Legislative Update
• HB2481 – Schools; primary property tax rate
• Eliminated 4% cap for budget balance carryforward
• Primary tax rate calculated by formula based upon QTR &
allowable expenditure items like TRCL/TSL difference, small
school exemption, desegregation, adjacent ways, etc.
• Cash balance no longer used

8. Legislative Updates
• HB2476 – School property; sales; leases; use
• Repeals 15-1102 and replaces with new language in 15-1102
• Collapses 500, 505, 506 as one plant fund
• Retroactive to July 1, 2016

9. Legislative Update
• HB2190 – Education Omnibus
• Modifies the definition of extracurricular activities for the
purposes of the tax credit referred to as the extracurricular tax
credit, to include school-sponsored activities that do not require
students to pay a fee
• Audit firm must send copy of audit to CSS
• Limits hearing requirements for use of insurance recovery and
litigation recover monies for more than $250,000
• Eliminates SPED categorical tables from budget forms

10. Legislative Updates
• SB1117 – Adjacent Ways
• Requires that adjacent ways project proposal to be filed with the
SFB to include project cost.
• If entire project cost for the project is greater than $50K, the
project has to be approved by the SFB
• SFB must approve within 60 days

11. FLSA Changes – Effective 12/1/16
• Three tests for exemption
• Salary level, salary basis, job duties = all three must be met
for an employee to be exempt
• Currently, salary level test is set at $23,660. Proposed to
change to $47,476
• Teachers continue to be exempt
• §541.204 Educational Establishments – references
education institutions that could lower the salary level test to
the starting salary for teachers (prorated to 12 month
calendar)