Legislature

Nearly $1.2 billion at risk for Arizona public schools if legislature fails to override cap | Education

SARA EDWARDS Cronkite News

PHOENIX — Time is running out for state lawmakers to rescind a spending cap that would prohibit public school districts in Arizona from spending nearly $1.2 billion that has already been approved by the Legislature and budgeted.

“This year it seems like it’s become a bit of a political football pitch,” said Marisol Garcia, vice president of the Arizona Education Association. “It’s something that shouldn’t be a problem, but unfortunately the majority in the Legislative Assembly decided to make it a problem.”

During her state of education address on Capitol Hill Tuesday, State Superintendent of Public Instruction Kathy Hoffman said that if the cap isn’t exceeded by March 1, districts public schools will have to cut their individual budgets by 16% before April 1.

“Schools will not be able to maintain their current day-to-day operations without action,” she said. “Let me be perfectly clear that inaction is not an option, and it is appalling that it was not the first issue discussed when the (political) session started a month ago.”

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What is the overall spending limit?

The aggregate spending limit, passed by voters in 1980, is an amendment to the Arizona Constitution that sets a spending limit for school districts based on the total spending of all districts. The cap applies only to district public schools; Charter schools did not exist in 1980. A two-thirds majority of the legislature is needed to override the cap and allow the $1.2 billion to be spent.

State Rep. John Kavanagh, R-Fountain Hills, said the amendment was a way to appease Arizonans concerned about high taxes. The formula that calculates school district spending is based on spending for the 1979-80 school year, according to the Arizona Center for Economic Progress.

In the past, said Chuck Essigs, director of government relations for the Arizona Association of School Business Officials, overstepping the limit was a technical issue that was resolved quickly — however, that was not the case this year.

According to Education Forward Arizona, the legislature last reversed the gap in 2007 and 2008.

Essigs said the legislature expects the limit to decrease due to fewer students enrolled in the 2020-21 school year due to the pandemic, which would lead to a lower spending limit this year, despite students returning to in-person learning.

“A lot of those kids are now back in school, but that affects the limit of about $300 million,” he said. “If the legislature doesn’t go over the limit, schools will only have a few months to cut $1.2 billion.”

Budget cuts mean schools could close

Essigs said some schools, unable to pay teachers and staff, may have to end the school year early if the limit is not exceeded. It’s frustrating, he said, because every dollar needed for salaries and to meet budgets has already been approved by the Legislative Assembly.

One of the policy issues at stake is Proposition 208, which imposes a 3.5% tax increase on people with incomes over $250,000 for single filers or $500,000 for married filers. Although the money from the proposal will go to public education, Essigs said “not a penny of that money is in this year’s budget.”

“That money won’t start showing up until next year,” he said. “But we have lawmakers who didn’t like 208, and they’re still fighting it in court. Some say, “I won’t approve of going over the limit until the courts rule it’s unconstitutional.”

Maricopa County Superior Court Judge John Hannah declined to rule immediately on the constitutionality of Proposition 208, according to The Arizona Republic. Hannah must make her decision by March 10, after the deadline for the Legislature to lift the spending cap, but Hannah said he “cannot determine when he will govern.”

“There are no ulterior motives,” he told La République. “I get the decision when I take it out.”

Lana Berry, chief financial officer of the Chandler Unified School District, said the schools had the money, they just needed permission from the legislature to spend it. Budget documents show Chandler Schools would lose more than $54 million.

“There are no new taxes, no new funds involved in all of this, and it’s really hard for anyone to understand because it’s a complex subject,” she said. “We knew it was going to be a problem. We need a waiver from the legislature and then we need to fix it for the future.

Berry said she and her fellow financial officers in neighboring school districts don’t know where the money from the budgets will go if the Legislature doesn’t exceed the cap.

“We all have to cut our budgets by April 1 if they don’t approve the budget, so at this point we can’t increase our budget too much,” she said. “To keep that money there, we think.”

Garcia said the money goes back to the Legislative Assembly and is put back into a savings account and cannot be spent. If the districts were to spend the money anyway, that money would be taken out of the next year’s budget.

“What this immediately means is that educators can lose their jobs starting April 1, programs can be canceled starting April 1, and class sizes can increase starting April 1,” Garcia said. .

Will the spending limit be exceeded?

As schools and education advocates bite their nails waiting for waivers, Kavanagh said he’s pretty confident the budget will be approved.

“I think the Democrats are obviously trying to give the impression that we’re not going to (cross the line) and schools are going to go over the cliff, when in reality nobody here is really talking about it,” said he declared. noted. “It will be scheduled, and I think most people expect it to be overrun enough that (overruns) are no longer an issue.”

But education advocates worry the Legislature isn’t taking the cap seriously enough and that the March 1 deadline to approve the waiver will pass without action, forcing districts to cut their budgets. during the last term of the school year.

“Failure to act will hurt students and families,” Hoffman told lawmakers Tuesday in his speech. “The money is already in the district bank accounts. We don’t add new funds or raise taxes, we just let them spend all the money you budgeted for them last year. There is no choice but to suspend and repeal the cap.