With declining enrollment over the last decade, Arizona’s community colleges have been forced to rely more heavily on property taxes for funding.
A July newsletter from the Arizona Tax Research Association notes that community college expenditures across the state are up nearly 3% from last year and the representation of levies community college funding has increased from 62% in 2016 to a projected 70% in 2026 that exceeds $1 billion.
The number of full-time community college students in 2016 was about 116,000, but that number is now hovering at just over 90,000 students. The number of full-time students at community colleges declined by nearly 27% from 2014 to 2024, according to ATRA.
Kevin McCarthy, the president of ATRA, said Monday that declining student enrollment has been a trend in the K-12 system and across the country as it has experienced a declining birth rate.
McCarthy said the state’s funding of community colleges is inequitable due to the state’s equalization rate formula, which considers a district’s local property wealth in how much state aid is provided.
Only five counties received equalization aid, according to the Joint Legislative Budget Committee’s 2026 baseline book. Cochise County, Graham County, Navajo County, Yuma County and La Paz County — though both Yuma and La Paz County’s aid was tied together.
“It would be great if the equalization formula equalized something. It doesn’t equalize a thing,” McCarthy said.
Compounding the issue is the state’s expenditure limit for community colleges, which limits district total expenditures and is tied to the number of full time students in a district regardless of revenue increases.
Santa Cruz County’s community college district has more than 400% of cash reserves than its budget is allowed to spend, according to ATRA.
“At some point, the response to declining enrollment can’t be just continuing to increase property taxes. You’ve got to do something about how many course offerings we’ve got and how many students are in those classes,” McCarthy said.