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Arizona legislators ask outgoing governor to call special session on school spending

Capitol Media Services photo by Howard Fischer.
Chino Valley schools chief John Scholl details problems Thursday his school and community would face if lawmakers fail to approve a waiver from the education spending limit.

By Howard Fischer
Capitol Media Services
PHOENIX -- A bipartisan group of Arizona legislators called on Gov. Doug Ducey to live up to his promise to call a special session to address a school spending crunch before he -- and some of them -- leave office at the end of the year.
And hanging in the balance is whether schools are going to have to cut nearly 18% of their budgets before July 1.
Rep. Michelle Udall, R-Mesa, who chairs the House Education Committee, said Thursday that lawmakers approved a $1 billion increase in funding this past session for K-12 education.
Only thing is, that new money bumps total state and local education funding against a 1980 voter-approved cap in school spending. Adjusted for inflation and student growth, that limit now is $6.4 billion.
But school districts already have prepared budgets and are on target to spend nearly $7.8 billion this fiscal year based on the funding that lawmakers approved.
Lawmakers can waive the cap with a two-thirds vote. And they have in the past.
Udall said that Katie Ratlief, Ducey's deputy chief of staff, said her boss committed to calling a special session only on two basic conditions.
First, a lawsuit challenging a voter-approved income tax hike for education needed to be resolved. That was done.
Second, said Udall, the governor wanted proof that there were the necessary 40 votes in the House and 20 in the Senate -- two thirds of each chamber -- to approve the override. And that list, she said, was presented to Ratlief in October.
To date, however, the governor has failed to act.
Sen. Sean Bowie, D-Tempe, said the bipartisan state budget Ducey wanted would not have gotten the necessary Democratic votes -- there were holdouts among the majority Republican caucus -- without that promise.
"His legacy will be diminished if he fails to hold up his end of the bargain,'' Bowie said.
It's not just lawmakers who are waiting for gubernatorial action.
Strictly speaking, lawmakers have until the end of March to waive the cap by the necessary $1.4 billion.
But Michael Wright, superintendent of the Blue Ridge Unified School District, said that is leaving districts like his in a precarious situation.
He said if that waiver fails so close to the end of the school year that means having to cut total spending by 18% in just the last three months. And that, he said, will wreak havoc, with required layoffs of teachers and support staff and possible school closures.
"Kids are going to be the ones that suffer,'' Wright said. And he said that what is needed is immediate action, not promises.
"I heard it said this: You can pretend to care,'' Wright said.
"But you cannot pretend to show up,'' he continued. "Governor, we need you to show up.''
John Scholl, superintendent of the Chino Valley Unified School District, echoed similar concerns. He said failure to raise the cap would force a $3 million cut in spending with just three months left in the school year.
"The only way to manage that would be to lay people off,'' Scholl said.
He said that doesn't just affect the kids and the employees. Scholl said that would have a ripple effect on the economy throughout the whole area as these laid-off employees would cut spending.
The other risk of waiting is that there will be a fresh crop of legislative leaders in January. And that runs the risk that the spending cap won't be a priority.
Risk aside, Udall said bumping the decision to the next legislative session would be inappropriate.
"This is the legislature that approved the money,'' she said.
Ducey press aide C.J. Karamargin said following the press conference that his boss wants to be sure that schools get -- and can spend -- those extra dollars. But the governor has yet to act -- or even commit to act.
"We are having discussions with lawmakers,'' is all that Karamargin would say about Ducey actually following through and using his constitutional powers to call lawmakers back to the Capitol.
The lawmakers and school leaders who spoke out on Thursday are not alone.
Outgoing House Speaker Rusty Bowers, R-Mesa, said he's ready to bring lawmakers back to the Capitol to waive the spending cap on schools. He said that appears to be a coalition of Democrats and some Republicans who can provide the necessary votes for approval.
"Personally, I'm OK with it,'' added Senate President Karen Fann, R-Prescott.
But Fann told Capitol Media Services that she first needs to see the measure.
Potentially more problematic, she said, is that some lawmakers argue that if there is to be a lame-duck special session they want other issues addressed, ranging from adding some accountability for public schools to demands for changes in election laws.
Udall conceded that some of the people on the list she presented to the governor's office also have other ideas. But she insisted that each has committed to vote to waive the spending cap if that is the lone issue in the session.
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. Chuck Essigs, lobbyist for the Arizona Association of School Business Officials, 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.
On Twitter: @azcapmedia