ARIZONA HOUSE OF REPRESENTATIVES

Fifty-sixth Legislature

Second Regular Session

House: ED DPA 6-4-0-0

HB 2089: community colleges; expenditure limitation

Sponsor: Representative Hendrix, LD 14

Caucus & COW

Overview

Modifies the operating state aid amounts to be withheld from a community college district (CCD) that exceeds its expenditure limitation in FYs 2025, 2026 and 2027.

History

The Economic Estimates Commission must annually determine each CCD's expenditure limitation by adjusting the CCD's FY 1980 local revenue expenditures to reflect changes in student population and the cost of living. A CCD governing board may not authorize local revenue expenditures in excess of the expenditure limitation unless authorized to do so by law (Ariz. const. art. IX, sec. 21). The following operating state aid amounts must be withheld if a CCD exceeds its expenditure limitation: 1) an amount equal to the excess expenditures if the excess expenditures are less than 5% of the limitation; 2) an amount equal to triple the excess expenditures if the excess expenditures are 5% or more but less than 10% of the limitation, or are less than 5% of the limitation but it is at least the second consecutive instance of excess expenditures; and 3) the lesser of an amount equal to five times the excess expenditures or 1/3 of the CCD's operating state aid allocation if the excess expenditures are 10% or more of the limitation (A.R.S. § 41-1279.07).

A CCD's operating state aid is annually determined by the Legislature and is adjusted to reflect changes in student enrollment (A.R.S. § 15-1466).

Provisions

1. Replaces the statutory operating state aid amounts that are to be withheld from a CCD that exceeds its expenditure limitation in FYs 2025, 2026 and 2027 with the following amounts:

a) an amount equal to 10% of the excess expenditures if excess expenditures are less than 5% of the limitation;

b) an amount equal to 20% of the excess expenditures if excess expenditures are 5% or more but less than 10% of the limitation;

c) an amount equal to 50% of the excess expenditures if excess expenditures are 10% or more but less than 12% of the limitation; and

d) an amount calculated according to the existing statutory withholding amounts if the excess expenditures are 12% or more of the limitation. (Sec. 1)

2. Limits, to 1% of its budget, the maximum operating state aid amount to be withheld from a provisional CCD established before December 31, 2015, that is in a county with a population of not more than 300,000. (Sec. 1)

3. Limits, to 0.5% of its budget, the maximum operating state aid amount to be withheld from a CCD in a county with a population that does not exceed 1,000,000. (Sec. 1)

4. Contains a retroactivity clause of July 1, 2023. (Sec. 2)

Amendments

Committee on Education

1. Includes science, technology, engineering and mathematics (STEM) and workforce programs state aid and monies deposited in a CCD's Workforce Development Account in the funding that is to be withheld according to the statutory withholding amounts from a CCD that exceeds its expenditure limitation in any fiscal year without authorization.

2. Adds STEM and workforce programs state aid and monies deposited in a CCD's Workforce Development Account in the funding that is to be withheld according to the modified withholding amounts from a CCD that exceeds its expenditure limitation in FYs 2025, 2026 and 2027.

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6. HB 2089

7. Initials CH Page 0 Caucus & COW

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