Office of Education

Education Funding Plan Logo 

Proposition 123

"Thanks to the voters’ approval of Proposition 123 in May, Arizona school districts will receive hundreds of millions of new dollars. These new resources will make a meaningful difference in the lives of teachers and kids across our state. “
- Governor Doug Ducey 


In 2016, as the result of the passage of Proposition 123, the total state land trust distribution has been increased from 2.5% to 6.9% and per Proposition 123 set at $259,266,200 for FY 2016.

Existing FY2016 Distributions:     $   87,185,212*

Increase due to Proposition 123: $ 172,080,988**     

Total after Proposition 123:          $ 259,266,200

*Throughout FY 2016, the existing FY 2016 distribution of $87 million was made on behalf or to schools, including $23 million to pay new school construction debt service, $47.1 million directly to schools for maintenance and operations, and $17 million directly to schools for the Classroom Site Fund (Proposition 301), most of which is used by schools to pay teacher salaries.

**On June 30, 2016, the Arizona Department of Education made the FY 2016 Proposition 123 payment in its entirety to school districts, totaling $224 million, of which $172 million was derived from the state land trust distributions and $52 million in new dollars from the state General Fund.  

Prop 123 Funding

See the following news stories for how money from the passage of Prop. 123 is making a real difference for our schools, students and teachers:



May 2016

In October 2015, the Legislature passed and the Governor signed an education funding plan to settle a five-year lawsuit by infusing an estimated $3.5 billion over ten years into Arizona's K-12 public education system.

On May 17, 2016, Arizona voters approved Proposition 123! The plan increases funding to $3,600 per-pupil through a combination of State General Fund dollars and an increase in distributions from the Permanent State School Fund (State Land Trust). Additionally, each year for the next five years, $50 million will be provided for general maintenance and operations for public schools. In the subsequent five years, this amount increases to $75 million. In Fiscal Year 2016, these increases will generate approximately $224 million in additional funds. Each year thereafter, the $3,600 per-pupil will increase for inflationary adjustments.

Proposition 123 increases the distribution of funds from the Permanent State School Fund from 2.5% to 6.9%  to public schools for ten years, but also includes fiscal protections for the State General Fund and the Permanent State School Fund, to protect these funding sources from the impact of significant economic downturns.


1. What is the Permanent State School Fund (State Land Trust)?

More than a century ago, at the time of statehood, the federal government granted the State of Arizona public lands to be used as an endowment. When the state sells these lands, the proceeds are deposited into the Permanent State School Fund, or State Land Trust. These funds are held in trust, invested and distributed to beneficiaries. Approximately 93% of the distributions from the State Land Trust are held in benefit for K-12 public schools. (See the Enabling Act)

2. When will schools begin receiving funds?

Public schools will receive funding beginning in June 2016 for use in school year 2015 – 2016, or schools may choose to have funding carried over for use in school year 2016-2017.

3. How much money would each school district or charter school receive?

The amount would depend upon the number of students enrolled.

4. How would the funds be used?

The plan does not prescribe the funds to be used for a specific purpose.


Connect with Us on

Tweets from the Governor