Arizona — United States Department of Education to the Honorable Tom Horne (April 25, 2024)

Summary

This is a letter dated April 25, 2024 from the Office of Elementary and Secondary Education at the United States Department of Education to Tom Horne, Superintendent of Public Instruction at the Arizona Department of Education (ADE). The letter states that the Department received ADE's written plan for a reasonable level of tolerance when calculating whether Arizona met State maintenance of equity requirements in fiscal year (FY) 2023 for a subset of its local educational agencies. It describes ADE's proposal of three tolerance levels for very small LEAs, including an 11 percent reduction in per-pupil funding for very small charter school LEAs with 550 or fewer students and a 36 percent reduction for very small LEAs with 47 or fewer students with elementary-only grade spans. It states that the Department determined the approach includes a reasonable level of tolerance for FY 2023.

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Full text

                          UNITED STATES DEPARTMENT OF EDUCATION
                              OFFICE OF ELEMENTARY AND SECONDARY EDUCATION




                                         April 25, 2024

The Honorable Tom Horne
Superintendent of Public Instruction
Arizona Department of Education
1535 West Jefferson Street
Phoenix, AZ 85007

Dear Superintendent Horne:

The U.S. Department of Education (Department) received your written plan for a reasonable
level of tolerance when calculating whether the Arizona Department of Education (ADE) has
met State maintenance of equity requirements in fiscal year (FY) 2023 under the American
Rescue Plan Act of 2021 (ARP Act). This written plan applies only to a subset of Arizona’s local
educational agencies (LEAs).

The ARP Act State maintenance of equity requirements help ensure that State funding supports
LEAs with high concentrations of poverty and students who have been subject to longstanding
opportunity gaps in our education system and experienced the greatest impact from the COVID-
19 pandemic. These requirements are vital for ensuring that States maintain funding to address
the impact of the pandemic on students’ education, and for protecting students in high-need and
highest-poverty LEAs from disproportionate cuts if reductions in State effort do occur.

The Department determined that it is consistent with the State maintenance of equity
requirements to allow a State educational agency (SEA) to calculate whether it has maintained
funding equity with respect to its very small high-need and highest-poverty LEAs within a
reasonable “tolerance level.” The Department’s determination is based on the possibility of
significant volatility in the calculated per-pupil funding amounts for very small LEAs caused by
small changes in student enrollment, which may be unrelated to whether an SEA has achieved
the intent of the requirements. (See Frequently Asked Questions, American Rescue Plan
Elementary and Secondary School Emergency Relief Program, Maintenance of Equity
Requirements, July 26, 2022, Question 21(a).)

ADE considers certain LEAs with Average Daily Memberships of 550 or fewer students to be
very small LEAs. The State’s equalization formula provided add-on funding up to $43,000 per
student for qualifying special education needs in FY 2023. According to ADE, the gain or loss of
this add-on funding as students with qualifying needs enroll and withdraw in very small LEAs
may distort year-to-year per-pupil funding comparisons and confound determinations of whether
ADE has maintained equity for these LEAs. Accordingly, per-pupil maintenance of equity
calculations for these LEAs may be significantly affected by small changes in student enrollment
and make the annual measure an imperfect indicator of whether the SEA has achieved the intent
of maintaining equity in funding across LEAs.
Accordingly, ADE proposes three tolerance levels for “very small LEAs.” Implications for LEAs
identified by the State as high-need or highest-poverty are described below:
    1) For very small charter school LEAs with 550 or fewer students, ADE proposes to tolerate
        an 11 percent reduction in per-pupil funding from year to year. This level includes six
        LEAs that served 0.18 percent of Arizona’s students in FY 2023.
    2) For very small LEAs with 100 or fewer students, ADE proposes to tolerate a five percent
        reduction in per-pupil funding from year to year. This level includes five LEAs that
        served 0.03 percent of Arizona’s students in FY 2023.
    3) For very small LEAs with 47 or fewer students with elementary-only grade spans, ADE
        proposes to tolerate a 36 percent reduction in per-pupil funding from year to year. This
        level includes three LEAs that served 0.005 percent of Arizona’s students in FY 2023.

After reviewing ADE’s tolerance proposal and accompanying data, the unique circumstances in
the State, and our further State-specific analysis, we have determined that this approach includes
a reasonable level of tolerance when calculating whether Arizona has maintained equity in
FY 2023.

We appreciate your diligence in developing this proposal. If you have any questions, please
contact your program officer at: Arizona.OESE@ed.gov.

                                                   Sincerely,

                                                   Laura Jimenez
                                                   Laura Jimenez
                                                   Director, Office of State and Grantee Relations


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