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PROPOSITION 320; REFERRED TO THE PEOPLE BY THE LEGISLATURE RELATING TO SCHOOL DISTRICT BUDGETS Official Title: AMENDING TITLE 15, CHAPTER 9, ARTICLE 1, ARIZONA REVISED STATUTES BY ADDING SECTION 15-917.Descriptive Title: REQUIRES CERTAIN SCHOOL DISTRICTS TO SPEND AT LEAST SIXTY PERCENT OF THEIR OPERATIONAL SPENDING ON DIRECT INSTRUCTIONAL EXPENSES AS DEFINED BY THE AUDITOR GENERAL; REDUCES CERTAIN STATE FUNDING FOR NON-COMPLIANT DISTRICTS. Ballot measures approved by Arizona voters are difficult to change. Constitutional amendments can be changed only if voters approve another constitutional amendment. Voter-approved laws are protected by Arizona’s Voter Protection Act, which prohibits the Legislature from repealing them and allows amendments only with a three-fourths vote of each legislative chamber when the amendment furthers the measure’s original purpose.Impact on ArizonansA YES vote will require specified Arizona school districts to spend at least 60% of their operational expenditures on direct instructional expenses. A district that does not meet the requirement would face specified penalties, including forfeiting its distributions from the Classroom Site Fund (CSF).A NO vote will maintain current law governing school district spending. Districts would not be required to meet the new 60% spending threshold and would not face the measure’s penalties, including the loss of Classroom Site Fund distributions, for failing to meet that threshold.BackgroundThe Classroom Site Fund (CSF) provides funding to Arizona public schools from the Permanent State School Fund and a dedicated 0.6% state sales and excise tax for education. Schools may use CSF money for purposes including teacher compensation, class-size reduction, teacher development, student support services, dropout prevention, and academic intervention programs.The Arizona Auditor General annually reviews school district spending, including the percentage spent on classroom instruction. Operational spending also includes areas such as student and instructional support, administration, facilities, food service, and transportation.The measure does not require the state to maintain the Classroom Site Fund or continue allocating money to it beyond what is otherwise required by Arizona law. Key ProvisionsRequire certain school districts to allocate at least 60% of their spending to direct instruction. The requirement applies to districts with at least 7,500 students or that operate a school in a county with a population of at least 500,000.Require districts below 60% to make annual progress toward the target. Beginning in FY 2027–2028, an affected district below the 60% threshold must increase the share of operational spending devoted to direct instructional expenses by at least 0.5 percentage points each year until it reaches 60%. A district that increases spending by more than required may apply the excess toward a future year’s required increase.Reduce Classroom Site Fund (CSF) allocations for noncompliance. If a district fails to meet either the 60% requirement or its required annual increase, its CSF allocation would be reduced by 25% after one year of noncompliance, 50% after two years, 75% after three years, and 100% after four or more years. Money withheld would remain in the CSF carryforward rather than being distributed to the noncompliant district.Allow limited one-year waivers from the funding penalty. The Superintendent of Public Instruction could waive the CSF funding reduction for up to one year. Generally, a district could receive no more than two waivers within 10 years, with a limited exception based on the timing of the second waiver.Assign definitions of compliance and spending to the Auditor General. The Auditor General would determine whether districts comply with the requirements and define “direct instructional expenses” and “operational spending” for purposes of the law.Fiscal AnalysisThere is no anticipated fiscal impact to the state General Fund associated with this legislation. For more informationOfficial Ballot LanguageArizona Joint Legislative Budget Committee: NonePublicly filed arguments for Publicly filed arguments againstDownload 2026 BALLOT PROPOSITIONS: MEET VOTE411LWVAZ nonpartisan guide to all the 2026 ballot propositions