Funding of Technology

Background

Unlike some states, Arizona does not specifically earmark technology funding for the individual public school districts. Instead, districts must use existing funding mechanisms to fund technology.

Existing Standards

Through the use of a per pupil formula, districts are allocated funds for Capital Outlay and Maintenance and Operations (M&O). This is the primary funding mechanism for districts from which they must allocate, internally, moneys for technology. The Capital Outlay budget is used for the purchase of equipment, textbooks, buildings, and instructional aids. These items may include computers, telecommunications equipment, and software. This funding may also be used for limited types of training when accompanying the purchase of equipment. Maintenance and Operations (M&O) funds may be used for salaries & benefits, staff development, school supplies, and maintenance.

Districts also have access to several other secondary funding mechanisms. These mechanisms includes Capital Outlay/M&O Override, Bond Sales, Grants and Desegregation Funds

In accordance with Arizona Revised Statute 15-481, with voter approval, a district may exceed its Capital Outlay and or Maintenance and Operations budget. This increases the budget by a specific percentage, for specific uses, for a specific number of years. After the period of time has expired, another election must be held to maintain or increase the override.

Arizona Revised Statute 15-491 states that, with approval of the voters, districts may sell bonds to finance capital equipment, facilities maintenance, and new construction projects. The amount which a district is able to request is determined by the assessed valuation of the property within the district. In addition, a district may receive grants from the legislature or from state agencies. These grants are one-time awards of moneys that award funds to a given district(s) for a limited amount of time.

Districts that qualify for desegregation funding may appropriate these funds from their local community in the form of additional taxes.

Another large source of funding for education is the federal government. Traditionally, the US Department of Education has been the main funding source through various programs such as Star Schools, National Challenge Grants for Technology in Education, and Title I of the Elementary and Secondary Education Act. In recent years, the federal role has expanded with the passing of the 1991 High Performance Computing and Communications Act which has provided both the mandate and the means for other federal agencies to become involved in funding educational projects. Such projects include various infrastructure initiatives such as the NIT Technology Information Infrastructure Program (TIP) and the NSF Network Infrastructure for Education (NIE).

The federal government has also developed plans for making even larger investments in educational technology. In February 1996, President Clinton proposed a $2 billion federal matching-grant program to help local communities put computers in the classroom. The "challenge grants" would hinge on communities’ ability to enlist the support of local businesses in the venture.

In the private sector, there are two main sources of funding. The first is the grant-making foundation. There are approximately 40,000 of these philanthropic organizations across the United States, representing community and independent entities. Altogether these organizations have contributed some $3.5 billion toward education at all levels in 1994, with an unspecified amount being directed amount toward technology projects. An estimated 26% of that amount awarded to elementary and secondary institutions with the remainder for high education (The Foundation Center, 1996).

The second source of funding is at the corporate level. Corporations, including both direct corporate giving and indirect donations through corporate foundations, donate an estimated $3.2 billion each year in cash or equipment to educational institutions. As with grant-making foundations, the majority of this funding is directed toward higher education with only some 17% of this amount provided to elementary and secondary educational institutions (Connal for Aid to Education).

Current Issues and the Impact on Education

As shown above, schools have a wide-range of mechanisms available to them for funding technology. However, each of these mechanisms are severely limited, either by having little in the way of financial resources or by having technology compete with many other needs within the school.

Typically 80 to 90% of a district's M&O budget is consumed by salaries and benefits which leaves little funding for technology training and maintenance. With state funding, there has been minimal increase in the per pupil M&O allocation for the past five years, leaving those districts with static or declining enrollment without any options for increasing this funding. The Capital Outlay budget is affected by such things as: purchase of textbooks and instructional materials, purchase of other items such as copy machines, tools and equipment for maintenance and repair of facilities and grounds, as well as the replacement of large dollar items such as air conditioning units, etc. This leaves districts, especially those with static or declining enrollments, in the position of deciding between maintaining their capital investments and addressing health and safety issues or, attempting to move forward with some level of technology implementation.

Voter initiatives, such as overrides and bonds, have a direct impact on the tax rate for homeowners and businesses. This places school technology initiatives in direct competition with other scarce tax dollars. Also, these mechanisms have a disproportional impact based on the wealth of local district with areas that have a larger tax base can more readily pass these measures than those in less affluent areas.

While grants and appropriations from the legislature and state departments are valuable methods for infusing technology into districts, there are usually no provisions to support a project over an extended period of time. Once again, the local district will have to shoulder the burden of the costs for on-going maintenance and support, making it virtually impossible for some districts to sustain even successful programs.

Again, those districts with a high assessed valuation, having expensive homes and numerous businesses, have a higher bonding capacity than those which do not, leaving a great disparity in the availability of funding which could be available for the purchase of technology. Even in districts with a high bonding capacity, for various reasons, the sale of bonds has been rejected.

A common perception of many people in Arizona is that the state-wide technology funding deficit in our schools can be bridged for the most part through the use of federal and private as opposed to Arizona funds. Many Arizonans look at the fast-growing economy in the state with its large number of high technology firms and see those corporate dollars, available through "public-private partnerships", as a solution to this problem. Others see the federal government, through various grant-in-aid programs, as providing the moneys needed through various programs.

These perceptions are fueled in part by the actions of various corporate and government officials. The Clinton Administration has talked about the need to bring schools into the 21st Century through the use of technology and has proposed initiatives such as the fore-mentioned "Computers in the Classrooms" challenge grant program. The wide involvement of numerous companies in various school technology partnerships, such as "NetDay" and the Pacific Bell "Education First" project, have also encouraged people to view business as education’s financial savior.

The reality of the situation is that the aggregate amount of corporate and federal spending on educational technology initiatives is insufficient to have a systemic impact in Arizona. As far as federal government, the fore-mentioned Star Schools, Technology Challenge, TIIAP, and NIE programs awarded an aggregate amount of less than $100 million nationwide in FY96 to all institutions, including K-12. As of yet, the "Computers in the Classroom" project has yet to gain fiscal funding and given the status of the political situation in Washington, it is unlikely that it and any other large program like it will receive the necessary dollars.

The picture with corporate dollars is not much better. As mentioned above, the total amount of private giving (corporate and philanthropic) to all levels of education is approximately $6.7 billion on an annual basis. Of this amount only a fraction is directed toward technology and K-12 schools receive only a small amount of this (approximately 25%) total amount. The amount that is left over, if allocated evenly nationwide based on a per capita student ratio, would leave Arizona with some $36 per student.

That is not to say that these areas cannot play a part. The numerous high technology companies that are located in Arizona are a wealth of expertise and knowledge as far as the deployment and use of the same types of technology that are being used in schools. Also numerous companies have entered into "public-private partnerships with several K-12 schools that have provided sorely needed cash, equipment, and technical expertise to the classroom. Philanthropic foundations and federal government agencies have also provided funding for numerous worthy and innovative K-12 projects throughout the state.

What this type of private and federal funding has done is created pockets of excellence throughout the state by developing proofs of concept. Arizona schools are often hurt in this process, either by lack of funds to provide the necessary cash match needed to receive such awards or lack of school-industry partnerships.

Recommendations

If technology is to become a regular and integral component of elementary and secondary education, its costs must come to be seen as a regular cost of doing business. If a program is treated as an add-on, as is the case when it is supported by external, categorical grants, experience has shown that it is unlikely to become deeply incorporated in a school and to survive the withdrawal of the grant. A nation of technology-rich schools cannot be built with special purpose, categorical funding (Getting America’s Students Ready, 1996).

Funding for technology needs to be both universal and sustainable. One possible solution to the problem of state-wide technology funding deficit is to use the aggregate taxing and administrative power of the State of Arizona to assist schools in the purchase and maintenance of technology. While the State through the Arizona Department of Education has developed and deployed various technology projects in the past, there has been little attempt to develop a systemic and integrated approach to meet the local technology financing issues of schools.

Several other states have developed state-wide programs to assist their schools with technology funding issues. One approach by states such as Florida and Utah has been to allocate money directly from the legislature, either based on a per capita formula or through competitive challenge grants, to K-12 schools. Nebraska sets aside 12.5% of the proceeds from its state lottery for an Education Improvement Fund which funds special curriculum and technology projects in Nebraska schools. California, through its public-utility, has managed to provide schools with reduced telecommunications rates for service.

In each of these instances, the various state governments have used their fiscal or administrative powers to assist schools with acquiring and integrating technology. In some instances, state like California have also developed special competitive grant processes such as the "School-Based Education Technology Grants Program" to encourage the development of a local community interest and partnership in a school’s technology program.

Given these examples, the State of Arizona has a unique opportunity to enter into a partnership with Arizona K-12 schools. Some options include:

• The establishment of a state fund to provide the necessary cash matches for federal and foundation grant initiatives;

• A "technology capital levy" funded by the State and to be assessed based on a school’s per capita student enrollment that will provide additional dollars to help schools meet technology funding deficits;

• A state "challenge fund" that would fund unique and worthy proposals designed to showcase leading-edge technologies and curriculum in the classroom.