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Arizona schools must cut spending 18 percent unless state lawmakers act

Martin Bureau
AFP/Getty Images

By Howard Fischer
Capitol Media Services
PHOENIX -- Arizona schools across the state will have to cut their current spending by nearly 18 percent unless state lawmakers act to authorize them to actually use the money they already have.
State schools chief Kathy Hoffman warned legislative leaders Tuesday that the constitutional spending limit for the current school year is $6.4 billion.
Only thing is, lawmakers have approved more state dollars than that. More to the point, individual districts already have prepared budgets -- and are on target to spend -- nearly $7.8 billion based on those actions.
Absent legislative action, however, that nearly $1.4 billion difference remains off limits to them.
Only thing is, current Republican legislative leaders are showing no interest in acting before the end of the calendar year, saying the issue can wait until the next legislative session.
"When session begins in January, the issue will be taken care of, just as we have done for numerous years in the past,'' said Senate President Karen Fann, R-Prescott.
House Speaker Rusty Bowers, R-Mesa, said he's willing to consider bringing lawmakers back to the Capitol after the election. But he said he's "not optimistic'' that he can find enough support for such a session, particularly as it would take a two-thirds vote to waive the limit.
And C.J. Karamargin, press aide to Gov. Doug Ducey, said his boss won't call a special session absent a showing of support.
"Show us the votes,'' he said.
It is true that schools have bumped up against the limit in prior years. And there have been what amount to last-minute -- and one-time -- fixes.
But Fann and Bowers will not be coming back, with a fresh crop of legislative leaders. And that runs the risk that this won't be a priority.
What makes that particularly problematic is the possibility of having to cut $1.4 billion with less than a full fiscal year left. So even if lawmakers were to act in January, that effectively would force schools to cut 36% of what they were planning to spend in the last half of the school year.
"A lot of schools will be shut down,'' said Chuck Essigs, lobbyist for the Arizona Association of School Business Officials, as the law requires those cuts to be spread among all schools, large and small.
Hoffman said the need for immediate action by lawmakers is acute.
"They've already waited far too long and this issue needs to be addressed immediately,'' she said.
Hoffman said legislative inaction "is strangling the decision making of our school leaders who want to move forward with budgeting and want to be implementing the additional funds the legislature allocated last session.''
"They want to put that money into teacher raises and operational needs,'' she said.
It isn't just Hoffman who wants to avoid that possibility with a more immediate solution.
"This is the only issue with which I agree with Kathy Hoffman,'' said Tom Horne. He is the Republican candidate running against Hoffman.
And Horne said he's not convinced that the plan by GOP leaders to shelve the discussion until next year is a good idea.
"It'd be a lot safer if they do it now,'' he said.
The limit was approved by voters in 1980. Based on figures at that time, it is adjusted annually for inflation and student population growth.
What is causing the current problem is the convergence of several unusual factors.
First, the limit is always based on the prior year's school numbers. Enrollment remains down due to COVID.
The bigger problem is actually due to one the legislature created in seeking to provide financial help.
In 2000, voters approved Proposition 301 to levy a 0.6-cent sales tax to fund education, including teacher salaries, for 20 years. Voters exempted those revenues from the aggregate expenditure limit.
Facing expiration of that tax, lawmakers agreed in 2018 to a new, identical levy to pick up when the old one expired. That would keep the money flowing through 2041 without interruption.
Only thing is, the legislature never exempted what the new levy would raise from the expenditure limit. Essigs said that alone amounts to anywhere from $600 million to $800 million of the money now coming into schools.
Moreover, to balance the budget last decade, lawmakers cut dollars from various capital funding accounts.
With the state flush in revenues, those accounts are now fully funded. But the additional dollars that were restored to schools also helped to push total statewide expenditures above the constitutional limit.
Lawmakers can -- and have -- raised the limit in prior years, but each time only on a one-year basis, and each time waiting until there were just months remaining in the school year.
Essigs said there are dangers in waiting until next year in hopes there will be the votes to waive the limit for the current school year. And it starts with the anticipated turnover of lawmakers.
"We're going to have a lot of new people at the legislature,'' he said. And Essigs said while there was an understanding among the lawmakers who approved the current education budget to follow up and raise the limit, many who are familiar with that arrangement -- which does not exist anywhere in writing -- will be gone.
Complicating that is the requirement for a two-thirds vote.
"You're going to have a whole bunch of new people, depending on what happens next Tuesday, who have not addressed this problem before,'' Essigs said.
"Hopefully they will understand the problem,'' he continued. "But I don't see that there's any guarantee.''
House Minority Leader Reginald Bolding, D-Laveen, who also will be gone next year, said he hasn't given up hope there will be a special session to address the problem.
"Hopefully, after the election, cooler heads prevail and we can actually get this thing done,'' he said. And Bolding said it's only appropriate that the current crop of lawmakers deal with the issue.
"This legislature is the one that approved the spending,'' he said. "So we need to go ahead and finish the next step.''
Bolding also said he believes that two-thirds of lawmakers would vote to approve the waiver if a special session is called and the item is put up for a vote.
That, however, would be contingent on Ducey, who also will not be back next year, who has the power to call lawmakers back to the Capitol to address the issue. Hoffman said the lawmakers who want to address the issue now are being "hamstrung'' by his inaction.
On Twitter: @azcapmedia