AZ Schools Waste Money on Nonexistent Students

Funding is based on last year's enrollment, even when school populations decline

Arizona policymakers could take a lesson from the classic comedy Ghostbusters. Near the beginning of the film, Stantz (Dan Aykroyd) and Venkman (Bill Murray) are trying to decide what to do after being kicked out of Columbia University's paranormal research department for wasting the school's money.

Stantz says, "Personally, I liked the university, they gave us money and facilities and we didn't have to produce anything… You don't know what it's like out there. I've worked in the private sector. They expect results."

Results, in terms of effective use of taxpayer money, are sorely lacking from Arizona's school finance formula. Last year, the state spent $125 million on empty seats in Arizona public schools. The state paid for some 13,500 "ghost" students in districts with declining enrollment. This was caused by the state's outdated school finance system, which uses the prior year's enrollment count to calculate funding for the current school year. Adding insult to injury, districts can report current-year enrollment increases and have their funding adjusted, but no such current-year adjustments are made for districts with declining enrollment.