Arizona Gov. Jan Brewer is backing an unusual effort to tie a relatively small portion of school funding to districts’ performance on the state’s A-F grading system, a step her administration argues will create a monetary hook for school improvement.

Legislation that would establish a performance-based funding model is in play in the GOP-controlled legislature. But the primary vehicle for the plan, if it goes forward, is likely to be the budget negotiated by Brewer and state lawmakers, according to the governor’s office

The Republican governor spelled out the idea in her budget proposal for the coming year (see page 9) saying the goal was to reward schools for both high achievement and improvement and “promote local innovation and competition and enhance student performance at every school.”

As described in the governor’s plans, local education agencies could earn “per-pupil achievement payments” by securing enough points on the state’s grading scale to earn a mark of A, B, or C. Arizona is one of a number of states where A-F grading systems, pioneered in Florida, have taken hold.

A second pool of incentive money would go to schools that improve their scores in the state’s grading system. Brewer’s administration, saying that it recognizes that challenges in improving the lowest-performing schools, wants a higher per-pupil “improvement payment” to go to local education agencies that make progress from a D or F grade.

The majority of the funding for the program would come from new dollars, moved from other parts of the budget, rather than existing, reallocated money from K-12, said Dale Frost, the governor’s education adviser, in an interview with Education Week.

In the first year of the program, for instance, the program would receive $54 million in funding, $36 million of which would be new money, rather than reallocated education funding. In the first year, the performance system would account for 1 percent of the state’s overall education-funding formula, and that allocation would grow to 5 percent by the fifth year, fiscal year 2018, when a total of $271 million would be devoted to the performance system.

Local education agencies–which would include districts and charter schools–would be given flexibility in deciding how to spend money coming to them through performance funding, according to the governor’s office.

The Arizona Education Association, a union, opposes the measure, saying in an analysis that the system would reallocate money from state K-12 schools that are already struggling financially, and create a “winner/loser performance funding system.”

The union pointed to an analysis by an associate professor at Arizona State University, David Garcia, who concluded that the achievement funding model would favor wealthier school systems, and that many local education agencies may not be eligible for performance funding.

Frost, of the governor’s office, disputed that conclusion, saying it failed to fully account for the way the funding system was weighted to help academically struggling school systems, many of which were disadvantaged economically.