11. Schools; inflation adjustments; exceptions; definitions

Section 11. A. On or before February 1 of each year, if the state transaction privilege tax growth rate and the total nonfarm employment growth rate are each at least one percent, but less than two percent, the director of the office of strategic planning and budgeting, or its successor agency, and the director of the joint legislative budget committee, or its successor agency, shall jointly notify the governor, the president of the senate and the speaker of the house of representatives. On receipt of the notification, the legislature is not required to make the inflation adjustments required by section 15-901.01, Arizona Revised Statutes, for the next fiscal year.

B. On or before February 1 of each year, if the state transaction privilege tax growth rate and the total nonfarm employment growth rate are each less than one percent, the director of the office of strategic planning and budgeting, or its successor agency, and the director of the joint legislative budget committee, or its successor agency, shall jointly notify the governor, the president of the senate and the speaker of the house of representatives. On receipt of the notification, the legislature shall not make the inflation adjustments required by section 15-901.01, Arizona Revised Statutes, for the next fiscal year.

C. Beginning in fiscal year 2024-2025, on or before February 1 of each year, if the total amount of general fund appropriations for the Arizona department of education, or its successor agency, is at least forty-nine percent but less than fifty percent of the total general fund appropriation for the current fiscal year, the director of the office of strategic planning and budgeting, or its successor agency, and the director of the joint legislative budget committee, or its successor agency, shall jointly notify the governor, the president of the senate and the speaker of the house of representatives. On receipt of the notification, the legislature:

1. Is not required to make the inflation adjustments required by section 15-901.01, Arizona Revised Statutes, for the next fiscal year.

2. May reduce the base level for the next fiscal year by the amount of the inflation adjustments required by section 15-901.01, Arizona Revised Statutes, made for the current fiscal year.

D. Beginning in fiscal year 2024-2025, on or before February 1 of each year, if the total amount of general fund appropriations for the Arizona department of education, or its successor agency, is at least fifty percent of the total general fund appropriation for the current fiscal year, the director of the office of strategic planning and budgeting, or its successor agency, and the director of the joint legislative budget committee, or its successor agency, shall jointly notify the governor, the president of the senate and the speaker of the house of representatives. On receipt of the notification, the legislature:

1. Is not required to make the inflation adjustments required by section 15-901.01, Arizona Revised Statutes, for the next fiscal year.

2. May reduce the base level for the next fiscal year by two times the amount of the inflation adjustments required by section 15-901.01, Arizona Revised Statutes, made for the current fiscal year.

E. If the inflation adjustments required by section 15-901.01, Arizona Revised Statutes, are not required to be made or are prohibited from being made pursuant to this section for a fiscal year, the omitted inflation adjustment amounts:

1. Are not required to be paid or distributed in any subsequent fiscal year.

2. Become a part of the calculation of the base level for subsequent fiscal years.

F. If base level reductions are made pursuant to subsection C or D of this section for a fiscal year, the reduced amounts:

1. Are not required to be paid or distributed in any subsequent fiscal year.

2. Do not become part of the calculation of the base level for subsequent fiscal years.

G. This section preserves the authority vested in the legislature pursuant to this constitution.

H. For the purposes of this section:

1. “Total nonfarm employment growth rate” means the percentage change in the seasonally adjusted total nonfarm employment in this state from the final month of the most recent calendar year to the final month of the immediately preceding calendar year, as reported by the Arizona department of administration or its successor agency.

2. “State transaction privilege tax growth rate” means the percentage change in the revenues derived from the state transaction privilege tax that are distributed to the state general fund from the most recent calendar year to the immediately preceding calendar year, as reported by the Arizona department of revenue or its successor agency.