AZ HB2089

Establishes tiered withholding of state aid for community college districts that exceed expenditure limitations during fiscal years 2024-2025 through 2026-2027, ranging from 10% to 50% of excess expenditures depending on the amount of overage.

Imposes 10% withholding if excess expenditures are less than 5% of the limitation, 20% withholding for 5-10% excess, and 50% withholding for 10-12% excess.

Requires excess expenditures of 12% or greater to be calculated under existing law in section 41-1279.07, Arizona Revised Statutes.

Limits state aid withholding to 1% of budget for provisional community college districts in counties with populations not exceeding 300,000 persons.

Limits state aid withholding to 0.5% of budget for all community college districts in counties with populations not exceeding 1 million persons, with the provision applying retroactively from June 30, 2023.