More than half of the school districts in Arizona spent a smaller percentage of their total available dollars in classroom instruction in the last school year than the year before, according to a new report.

And the chairman of the House Education Committee says he knows whose fault that is: School Administrators.

Rep. Matt Gress concedes that, strictly speaking, Arizona schools overall spend less on pure administrative costs than the national average, things like salaries for superintendents, principals, business managers, clerical and accounting staff and human resources. 

The issue, said the Phoenix Republican, is not their salaries but the decisions that they make on how to divide up the money they get on other priorities, ranging from support services to utilities, which means fewer dollars for classrooms and, by extension, less money for teacher pay. But the executive director of the Arizona School Administrators Association said what’s missing from that analysis is that schools are required to have things like guidance counselors, nurses and speech pathologists.

Those are all things that benefit students, said Paul Tighe, Executive Director at Arizona School Administrators. But the way the Auditor General measures how districts spend their money does not include them as part of that highly watched figure of “instructional spending.” And Chuck Essigs, lobbyist for the Arizona Association of School Business Officials, said there’s something else to consider. 

Not only are there fewer school-age children as demographics change, but some of them are choosing to go to charter schools or private schools, especially with vouchers of state dollars available to everyone.

However, he said these schools don’t tend to take students with special needs, who traditional public schools cannot turn away. He said these students need additional services — the kinds performed by counselors, audiologists, and other specialists, not classroom instructors. Essigs also said that blaming schools for having to spend more on electric bills ignores the role of utilities in setting rates.

What is at the center of the issue is that overall spending on what is classified as instruction hit the lowest point since the Auditor General’s Office began monitoring that in 2004.

The report found that overall spending on instruction among all the districts in the state increased by more than $158.1 million. And overall spending for the 2023-2024 school year for all education functions hit nearly $10.6 billion, up about $500 million from the year before.

But while there was more money in the system, the report says that just 52.6 cents of every dollar was spent in the instruction category. That covers everything from teachers and aides to instructional supplies, field trips and athletics. That is down 0.8 percentage points on a statewide basis from the prior school year. 

What makes this year’s report particularly significant is it comes as Gov. Katie Hobbs and lawmakers are negotiating whether to tap the state land trust to increase K-12 funding. Much of that debate comes down not just to how many dollars the state would withdraw from the trust each year but exactly how those funds would be allocated.

Republicans are proposing to boost salaries by $4,000 a year; the governor’s plan adds money, but her office provides no specific figures. Gress, one of the Republicans working to craft that solution, seized on the new findings to charge that education funding in Arizona is not being properly managed. 

Consider, he said, that back in the 2003-2004 school year, 58.6 cents of every dollar going into education went into instruction. “The report shows that if districts allocated the same percentage to classroom instruction as they did 20 years ago, an additional $624 million would be available for teacher pay,” he said. And that, said Gress, would be enough to increase teacher salaries by $8,500 a year. 

“Resources are available, but teachers are taking the back seat to administration,” he said. 

That, according to the report, is not due to purely administrative costs.

According to the auditor general, in 2022, the most recent year for which comparable figures are available, Arizona schools spent 10.2% out of every dollar on administration. The comparable national figure was 11.6%.

That, however, still leaves the fact that Arizona devotes less of each dollar to instruction than the national average. So if not administration, what causes that? Some of that falls in that category of student support, the costs of counselors, audiologists, speech pathologists, nurses, social workers and attendance services. This year that ate up another 9.8 cents of every dollar.

Then there’s another 6.2 cents for instruction support which includes librarians, teacher training, curriculum development, special education directors, media specialists and instruction-related technology services.

Arizona has historically spent more than the national average in two areas. One is “plant operations,” which includes utilities. This becomes a crucial issue during the hottest months of the year, consuming close to 12 cents of every dollar. Arizona also tends to spend more than the national average, particularly with rural districts having long bus routes. 

“If you really want to find where the blame is in school budgeting, it’s your superintendents and the administration,” Gress said. “They are deciding to allocate resources away from the classroom, away from instruction.” 

“It’s a clarion call for us, as state lawmakers, to begin reorienting our state spending and school district spending back toward the classroom,” he continued.

And what of the need for things like librarians, nurses and counselors? 

“That’s true if you have all of your teachers taken care of,” Gress said. “You can have all of these other great support services in place, but if you don’t have solid, qualified classroom teachers at the front of every classroom, then the whole point of education is under threat. Call it a day because learning is not going to be happening if you don’t have these classrooms led by full-time qualified teachers.” 

And Gress said he doesn’t believe that all of the non-instructional staff being hired by schools is necessary. 

Essigs said what’s left out of that argument is why Arizona schools spend a higher percentage of their dollars than other states on other non-classroom areas. 

“One is that utility companies in Arizona have raised their rates,” he said, which inflates the category of what is called “plant operations.”

“And the weather has not been friendly to school districts,” Essigs added, with higher expenses just to keep classrooms comfortable. Gress has a different explanation. And it’s tied to the fact that overall school enrollment is down by nearly 45,000 in the past five years, a 5% drop. In fact, in the last year, 149 of 230 school districts reported a decline in the number of students. 

“One of the top reasons for over expenditure is underutilization of space,” Gress said. “They’re keeping buildings open, paying utilities, paying staff to manage these facilities when they could be closing down schools and reallocating those students to other buildings.” 

Essigs said districts are closing schools at rates he’s never seen in his career. But he said it’s not a simple matter of shuttering underutilized schools, and not only because there may not be space at other district schools. 

Essigs said there is “pushback” from communities who, even knowing the cost of operating a school, want those neighborhood schools preserved. He also said it’s wrong to blame schools for high transportation costs, saying that is a simple function of higher costs for everyone from the bus drivers to the diesel fuel to run them. And as to 4.6 cents of every dollar spent on food services, Essigs pointed out that most of the employees there are minimum wage workers whose salaries, under the terms of a voter-approved initiative, have to be raised yearly to match inflation.

On that underlying issue of teacher pay, the new report finds that the statewide average teacher salary is $65,113, with 11.8 years of average years of classroom experience. But what it also finds is an apparent decision of more experienced teachers leaving the profession. 

In 2023, 82% of teachers had been doing this for four years or more; in 2024, that figure declined to 78%.

That, in turn, was reflected in figures for more than a third of districts which saw a decline in average teacher salaries, due in part to older teachers leaving and being paid by new ones being hired at starting pay.

Learn more:

If you want to do a deeper dive on the funding of Arizona’s school districts, check out http://sdspending.azauditor.gov/district and select a district.