Arizona school overrides and bonds: What voters need to know

By Stacy Mantle
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Arizona voters will decide more than candidates in the Nov. 3 general election.

Depending on where they live, some voters will be asked whether their local school districts should be allowed to collect additional property taxes for salaries, classroom programs, technology, buses, buildings and other expenses.

“Even after operational overrides are included, Arizona’s operational spending per student is about 30% below the national average," said Chuck Essigs, director of governmental relations for the Arizona Association of School Business Officials. "Those overrides help the districts that can pass them, but they do not make Arizona a high-spending state.”

The measures generally fall into three categories: maintenance and operations overrides, district additional assistance overrides and bond authorizations. 

“Every school district in the state has a budget limit calculated under the state funding formula," said Essigs. "Arizona allows districts, with voter approval, to exceed those limits by a certain amount for operational or capital expenses.”

While all can affect local property taxes, they each serve different purposes and operate under different rules.

The measures apply only within the boundaries of the district requesting them. A voter may live in both an elementary school district and a separate high school district, meaning more than one school funding question could appear on the ballot.

“It (the cost) varies from community to community," said Essigs. "The two major factors are how much additional spending is proposed and the size of the district’s tax base. A community with a large property tax base can have a lower tax rate to fund an override than a community that does not have a substantial property tax base.”

Maintenance and operations overrides

A maintenance and operations, or M&O, override allows a district to spend above the state-imposed limit for its operating budget. Arizona law generally allows districts to request an increase of up to 15% of their revenue control limit, a key component of the state’s school funding formula.

“The maintenance and operations override increases a district’s spending authority for operational expenses," said Essigs. "The most significant part of a school district’s operating budget is salaries and benefits.”

Overrides are temporary. A typical M&O override lasts seven years, with the full amount available during the first five years. Unless voters approve a continuation, the funding generally begins to phase down during the final two years.

A continuation does not create a permanent tax. It authorizes the district to maintain the additional budget capacity for another limited period.

“If you use the money to provide additional salaries for teachers, at the end of the override you have to go back to the voters and get it approved again, or you won’t be able to continue providing that additional salary,” said Essigs.

Some districts describe continuation elections as maintaining an existing tax rate. That can be accurate if the proposed override replaces one that is expiring, but it does not guarantee an individual property owner’s bill will remain exactly the same. Tax bills can also change because of property valuations, new development, other taxing jurisdictions and changes in the district’s total tax base.

If voters reject a continuation, the district does not necessarily lose the entire amount immediately. The existing authorization typically phases down before ending, giving the governing board time to reduce spending or identify other revenue.

District Additional Assistance overrides

Essigs said districts seeking DAA overrides must identify the capital expenses the additional revenue would support.

DAA funding can be used for items such as textbooks, instructional software, computers, classroom equipment, furniture, school buses, support vehicles and certain facility improvements. The specific projects must be identified in the district’s voter information materials.

“They have to identify what they’re using that money for,” Essigs said. “They can’t just say, ‘Give us some more money, and we’ll find a place to spend it.’”

Arizona law generally permits a DAA override of up to 10% of a district’s revenue control limit. Capital overrides may be authorized for up to seven years.

The difference matters: M&O overrides generally pay for people and programs, while DAA overrides generally pay for equipment and other capital needs. Districts cannot freely shift voter-approved capital override revenue into salaries or unrelated operating expenses.

A district may place both an M&O continuation and a DAA measure on the same ballot. Each is a separate question and can be approved or rejected independently.

School bonds

A bond authorization allows a district to borrow money for major, long-term capital projects and repay that debt over time.

“Bond money cannot be used for salaries and benefits,” Essigs said. “It can be used for new buildings, remodeling older buildings and buying equipment. It can only be used for capital expenses, not operational expenses.”

The state also provides capital funding through programs administered by the Arizona Department of Administration’s School Facilities Division. Building Renewal Grants can fund repairs needed to keep existing schools operating, while the New School Facilities program provides space for districts experiencing enrollment growth.

“Building renewal grants are provided to school districts on a grant basis,” said Jimmy Arwood, director of governmental relations for the Arizona School Boards Association. “If a district has a maintenance issue — say it needs to replace a roof or an air conditioner — that is what building renewal grants are used for.”

New school funding is calculated under a state formula and approved through the School Facilities Oversight Board.

“If a school district has increasing enrollment and needs additional square footage to provide students with space to learn, that is what new school facility funding is for,” Arwood said. “But it only covers the bare minimum.”

Arwood said locally approved bonds can pay for facilities and equipment not covered by the state programs, including fencing, furniture and other improvements.

“Bonds can fill out what the rest of the district needs,” Arwood said.

Bonds have also been used for some basic repairs that may qualify for state support. Arwood noted that a Maricopa County Superior Court judge ruled in 2025 that Arizona’s school capital funding system failed to meet constitutional requirements, in part because districts with limited bonding capacity could wait months or years for state-funded repairs. The state has appealed the ruling.

“Because the state has not adequately funded facilities, a lot of districts have had to rely more heavily on bonds just to cover things like replacing a roof,” Arwood said.

Bond proceeds may also be used to construct or renovate schools, replace heating or cooling systems, improve safety and security, purchase buses, upgrade athletic facilities or complete other projects listed in the district’s election plan.

“School districts, and specifically local taxpayers, should not be responsible for something that is the state’s responsibility to provide,” Arwood said.

Unlike an override, which provides additional annual budget authority for a limited number of years, a bond allows the district to sell debt up to the amount approved by voters. The district may issue the bonds in stages rather than borrowing the entire amount immediately.

How the tax estimates work

Overrides and bonds funded through property taxes are generally paid through secondary property taxes levied within the school district.

Ballot materials usually express the estimated rate as a dollar amount per $100 of net assessed valuation. That is not the same as a home’s market price.

For an owner-occupied home, the taxable assessed value is generally a fraction of the property’s value. Voter information pamphlets typically include estimated annual costs for sample home values, allowing residents to see a closer approximation of the proposal’s effect.

Those figures are estimates rather than guarantees. The final cost can change as assessed values rise or fall, new properties are added to the tax rolls, outstanding debt is repaid or the district’s total tax base changes.

Renters do not receive a property tax bill directly, but property taxes paid by landlords can be reflected in rent and other housing costs. Commercial, agricultural and other property categories may also be assessed differently from owner-occupied homes.

What a “yes” or “no” vote means

A “yes” vote authorizes the district to collect the additional revenue or issue the bonds described in the ballot question.

A “no” vote rejects that authority. For a new measure, the district would not receive the proposed funding. For an override continuation, the existing override would eventually phase out under state law.

Voters should also note whether a proposal is labeled a new measure, a continuation or a replacement. The wording affects whether the measure would add a new tax, continue an existing one or replace an expiring authorization at a different amount or estimated rate.

Each district must provide an informational pamphlet explaining the amount requested, proposed uses, estimated tax rate and estimated cost to property owners. Those details will vary by district even when the ballot measures carry similar names.

The governing rules are outlined in Arizona’s school district override law and the state’s statutes governing school bond elections.

“Bonds and overrides give some districts relief and some help," said Essigs. "But they do not make Arizona’s school funding formula adequate.”

Editor’s note: A grant from the Arizona Local News Foundation made this story possible. The foundation awarded 15 newsrooms to pay for solutions-focused education reporters for two years. Please submit comments at yourvalley.net/letters. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.

Stacy Mantle
Education Solutions Reporter

smantle@iniusa.org

Meet Stacy
Stacy Mantle is joining the team at Independent Newsmedia, Inc. as an Education Solutions journalist, thanks to a grant from the Arizona Community Collaborative. She has a long history in education that ranges from teaching junior high and middle school to developing curriculum and standards-based assessments.

Community: A longtime advocate for animal welfare, Stacy is deeply involved in rescue efforts and volunteers with several nonprofit organizations.

Random Fact: Once upon a time, she shared her home with a pet coyote and two wolf hybrids. The experiences were wild enough to become the subject of her first book!

Education: She holds a BA in English with a minor in Political Science, a Post-baccalaureate in Secondary Education, and an MBA with a emphasis on Marketing.

Hobbies: In her spare time, Stacy writes fast-paced urban fantasy novels, crafts small-batch artisan soap, and is always up for hiking or off-roading through the Arizona wilderness with her husband of 23 years.