Following the money: How Arizona pays for charter school students

By Stacy Mantle
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Arizona charter schools educate public school students, receive taxpayer funding and cannot charge tuition. But the way Arizona pays them differs significantly from the way it finances traditional school districts.

The distinction is important as families increasingly move among district, charter and other education options — and as policymakers debate how much Arizona spends on each.

The revised fiscal year 2026 state funding formula allocated approximately $2.09 billion to charter school equalization assistance.

Like district schools, charter funding is largely driven by enrollment and student characteristics.

Unlike districts, however, charter schools generally cannot levy local property taxes.

“The major difference in funding between district schools and charter schools is access to local funds — taxes, bonds and budget overrides,” said Delainey Noe, senior marketing and PR coordinator for Charter One.

Noe said districts also have access to transportation and facilities funding that charter schools do not receive under state law.

“In Arizona, charter schools receive fewer total dollars per student than district schools, about $3,500 less on average statewide,” Noe said, pointing to Joint Legislative Budget Committee data.

The comparison depends, however, on which funding sources are included. Districts and charters receive some of the same state funding but have access to different additional revenue streams.

Charter Additional Assistance

Charters receive a funding stream known as Charter Additional Assistance, intended to help pay capital and operational expenses.

The fiscal year 2027 budget's 2% inflation adjustment applies to the per-pupil base level, transportation funding and Charter Additional Assistance.

Together, those inflation adjustments add approximately $167.2 million to state K-12 formula costs, although budget documents do not identify how much of that increase goes exclusively to charter schools.

“Charter schools receive ‘charter additional assistance,’ which districts do not receive,” Noe said.

Critics sometimes point to that funding when comparing charter and district support, she said, but Noe argues it does not make up for revenue sources available only to districts.

“But, this does not close the funding gap created by access to the other sources of funding previously noted,” she said.

Where charter payments go

State Treasurer records provide another window into charter funding.

Charter operators receive recurring Basic State Aid payments and can receive separate payments through Charter Additional Assistance, Proposition 123 and supplements tied to students eligible for free or reduced-price meals.

Some individual payments can be substantial.

American Leadership Academy, for example, received a charter payment of approximately $13.4 million in July 2026.

But that does not mean $13.4 million went to a single school or represents profit for the operator. Some charter holders operate multiple campuses, and payments cover expenses beyond classroom instruction.

“When a taxpayer sees a payment to a charter operator it represents the services and support needed to operate a public charter school or schools,” Noe said.

“Like the district public school system, charter schools require infrastructure beyond the classroom, including staffing support, reporting and compliance, technology, facilities, operations, financial management, and other essential services.”

Public school choice

The funding distinction matters when Arizona's school-choice costs are compared.

Charter schools are schools of choice, but they remain part of Arizona's public-school system.

That means counting all charter spending as a separate private-school-choice expense — while also counting it as public-school spending — would count the same education dollars twice.

It also means a comparison between charter and district spending depends heavily on what is included.

Looking only at state equalization funding leaves out local funding available to districts. Looking only at selected charter funding streams can leave out programs available to both.

As Arizona families increasingly choose schools outside traditional neighborhood boundaries, understanding those distinctions becomes increasingly important to understanding where the state's education dollars actually go.

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 or email them to AzOpinions@iniusa.org. 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.