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AZ Senate Waives Public School Spending Cap

Sen. David Gowan, right, chats with Sen. David Livingston ahead of Monday's vote on the expenditure limit for schools. Gowan voted against lifting the cap; Livingston was in favor. (Capitol Media Services photo by Howard Fischer)

By Howard Fischer
Capitol Media Services
PHOENIX -- Arizona schools won't have to immediately cut their budgets -- and possibly lay off teachers and close schools.
On a 23-6 margin Monday the Senate gave final approval to waiving the voter-approved constitutional cap on K-12 spending. The move, which is good for just the balance of this school year, will prevent cuts estimated at more than $1.1 billion between now and June 30, or about 16 percent of each school district's current spending.
Monday's vote comes just days before the March 1 deadline for lawmakers to act.
The House had previously approved waiving the cap last week on a 45-14 margin. The measure, now having gotten the necessary two-thirds vote of each chamber, takes effect immediately, as Gov. Doug Ducey gets no say in the matter and deflected all questions about what he thought of the move.
Senate President Karen Fann, R-Prescott, chided unnamed individuals who "were basically bullying and threatening some of our members.
"This is not acceptable,'' she said. "This is not the way we do things here.''
And Fann insisted, despite being just days ahead of the deadline, that it had always been the intention to act -- and to get the necessary votes. She said even some of those who were hesitant about approval eventually recognized what is at stake.
"We realize the importance of school funding,'' Fann said.
"Our job is to make sure the kids stay in school,'' she continued. "They've lost enough education already by being withheld because of COVID and other things.''
But while all 14 Senate Democrats voted for the measure, Fann was unable to corral the votes of just seven of the 16 Republicans -- six who showed up to vote against it plus Sen. Kelly Townsend, R-Apache Junction who already had said she was opposed missed Monday's vote.
At issue is a 1980 voter-approved constitutional amendment which capped spending at then-current levels, with annual adjustments for inflation and student growth.
The Arizona Constitution does allow lawmakers to approve waivers. And they have done that twice in the past.
This year, the failure of lawmakers to exempt some other previously voter-approved K-12 spending from the cap, coupled with a decline in last year's enrollment due to COVID, put the limit at more than $1.1 billion in excess of the budgets already approved by lawmakers.
That fact actually has been known for months. But it took until now -- right before the deadline -- to get legislative action.
Sen. Vince Leach, R-Tucson, said he actually attempted to get a permanent fix for the cap two years ago. But that, he said, was sidelined by the COVID outbreak.
Since then, he said, the political climate has changed, at least in part because parents had to deal with schools that closed during the pandemic. But that, Leach said, is not all.
"Parents all of a sudden started recognizing what was being taught to their children,'' he said. "And I don't know what was more problematic: the fact that they weren't in school or they were being taught.''
For Leach, the answer is not to waive the limit but instead "backpack funding,'' where state aid follows each child to whatever school the parent wants, whether public, private, parochial or even home schooling.
Sen. Michelle Ugenti-Rita, R-Scottsdale, had her own similar objections to waiving the cap and allowing schools to spend the money.
"They have injected our kids with fear and anxiety,'' she said, accusing schools of politicizing COVID. But Ugenti-Rita said all schools want to talk about is the need for more money.
"Money isn't going to fix it because money's not the problem,'' she said. An
"We're capitulating to educational extremists who are holding our kids hostage,'' Ugenti-Rita complained. And she said that parents aren't asking for more cash.
"What they're talking about is the bureaucratic-educational machine taking advantage of children -- abusing them, in my opinion -- not listening to parents, and continuing to do the same thing they've always done: complain about money,'' Ugenti-Rita said. "And the only way we're going to fix the problem is when we realize we don't have a money problem.''
Sen. Sonny Borrelli, R-Lake Havasu City, who also voted against the waiver, complained that the education community does not give Republicans the credit for the things the legislature has done. The result, he said, is that education funding makes up half the $12.8 billion state budget, saying that is lost in "the lie from the educational-industrial complex and the shame-stream media.''
His Exhibit No. 1 is the 20% pay raise for teachers approved by the Republican-controlled legislature in 2018.
But Senate Minority Leader Rebecca Rios, D-Phoenix, said this wasn't anything the Republicans actually wanted to do. In fact, she pointed out, Ducey's own budget for that year had proposed just a 1% pay hike.
It was only after educators descended on the Capitol, Rios said, that lawmakers and the governor relented.
Other Republicans who until now had refused to commit to waiving the limit said they agreed to go along after they received certain assurances.
Sen. J.D. Mesnard, R-Chandler, said his big concern is a still-pending lawsuit over the legality of Proposition 208.
That 2020 voter-approved measure sought to impose a 3.5% surcharge on the taxable income of individuals above $250,000 to raise more than $800 million for K-12 education.
Only thing is, the Arizona Supreme Court said the levy cannot be imposed if the revenues would cause the state to exceed the spending cap -- the very same cap at issue here. So the justices sent the case to Maricopa County Superior Court Judge John Hannah to rule whether there was a legal way to raise and spend the money.
Hannah has yet to rule. And Mesnard, who opposed Prop 208, said he feared that if lawmakers set a precedent this year the judge would use that to conclude that shows it is possible to collect the additional revenues.
What changed his mind, Mesnard said, was assurances that Monday's vote dealt only with the spending cap for the current school year. The issue before Hannah is what happens in the 2022-2023 budget year.
Sen. David Livingston, R-Peoria, said he agreed to go along because of the crunch, what with schools already having allocated the funds through the June 30 end of the fiscal year. But he warned colleagues that this doesn't permanently solve the issue, saying that there already are indications that school spending for the coming fiscal year will exceed the spending cap by up to $1.8 billion.
Fann, who is leaving the Senate at the end of this year, agreed that there needs to be something more permanent.
"When this was set in 1980, we didn't have Chrome tablets or whiteboards or any of the stuff we have now that teaches our kids,'' Fann said. "We had school books and chalkboards and all kinds of things that didn't cost near as much.''
The focus, she said, should be not such much on artificial limits -- and having to revisit the waiver over and over again, but on the larger issue of what does it take to educate children.
Right now, she noted, per-pupil funding is about $14,400 a year. That figure, however, includes all local, state and federal sources; state dollars total about $6,600.
"Is that enough?'' Fann said. "It might be in some districts, it may not be in other districts.''
Rios said she is not apologetic for pushing for more funding, citing figures that show Arizona close to dead last in state funding. And she agreed with Fann that there needs to be a more permanent solution, calling the cap "an antiquated, arbitrary, outdated limit.''

On Twitter: @azcapmedia

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