Spending cap looms again over school districts - SanTan Sun News SanTan Sun News

Spending cap looms again over school districts

October 13th, 2022 SanTan Sun News
Spending cap looms again over school districts

By J Graber
Staff Writer

While school districts in Gilbert and throughout Arizona are worried they will have to grapple again with a voter-imposed cap on their spending next spring, it will be up to the next Legislature to do something about it.

The Aggregate Expenditure Limit caps what school districts around the state can spend in a year to a 1980-level plus 10% adjusted for inflation.

The limit was given a one-year hiatus by the state Legislature in the 11th hour earlier this year, but it is still in place without waivers. That means Arizona’s schools won’t be able to spend much of the $1 billion budget increase lawmakers gave them this year, school officials say.

If the Legislature doesn’t take action before March 1 of 2023, our district, as will every other public district that’s not a charter district, will have to amend their budget to reduce the budget by the amount we are over on a percentage basis,” Scottsdale Unified Superintendent Dr. Scott Menzel told his governing board last month.

Noting that meant a potential $28 million budget hit, Menzel said Gov. Doug Ducey is not quite living up to the promises he made last year when the state budget was passed.

Ducey vowed to hold a special session of the Legislature to address the aggregate expenditure limit, but that has not yet happened.

We still don’t have one promised,” Menzel said. “Some reports are that the Governor has said there are three conditions which were not necessarily the case at the time of the handshake agreement before.

That would be it – 1. it has to happen, so some sense of urgency (by lawmakers), 2. that we have support from the House and Senate leaders (to pass a waiver) and 3. that you can confirm that it will pass – with a two-thirds vote. That means 40 representatives and 20 senators.”

There have also been reports that Ducey was waiting until the lawsuit surrounding Prop 208, the Invest in Education Act, was finished, Menzel said.

But the Supreme Court ruled last month that the act, which adds a 3.5% tax on all income over $250,000 (or $500,00 for joint filers), is likely unconstitutional, though it left it up to the trial court to determine that.

That has happened so that’s no longer an issue,” Menzel said. “Some others have raised new questions about whether or not the referendum on ESA (Empowerment School Accounts) gets on the ballot because signatures have been collected, whether that was a deal breaker … there are a lot of moving parts and pieces here and some of it is political in nature.”

ESAs are $7,000 vouchers given by the state to students who do not want to attend traditional public schools. The Save our Schools coalition failed to garner enough petition signatures for a 2024 referendum on the measure.

While the governor encouraged us to spend the money when he made his budget statement, signed it, talked about the historic increase in public education, it was a $1 billion historic increase and that this should be spent on classroom teachers,” Menzel said. “That all could go away in a heartbeat if action isn’t taken.”

C.J. Karamargin, a spokesman for Ducey’s office, said the governor is waiting for an assurance that a waiver of the expenditure limit would pass in the Legislature before calling a special session. “We have seen no indication there are the votes.”

Rep. John Kavanagh, R-Fountain Hills, reports that outgoing House Majority Leader Rusty Bowers (R-Mesa) said there would be no special session and that the issue would be dealt with in January.

I think part of the reason is that the votes aren’t there,” Kavanagh said. “I’m speculating but a lot of members were extremely upset with the Save Our Schools” effort to kill or at least postpone implementation of the universal school voucher program.

Kavanagh noted that in the past he’s voted to waive the expenditure limit, “but like a lot of (legislators), I have concerns that the education community is refusing to take this back to the ballot to have the cap either raised or eliminated.

They have enough money to send the vouchers to the ballot but the important spending cap, they don’t want to deal with. Some people speculate that’s because polls have shown that voters would not eliminate this cap.

This cap was passed by the voters and it did give the Legislature the power to waive it but not every year, I mean, not every time,” Kavanagh said. “This has to be dealt with by the voters. A lot of legislators are concerned about continually overriding the will of the voters … when the education people don’t want to go back and have it settled by the people who created it.”

School boards across the state are gun-shy about spending the extra money in this year’s budget until they get the expenditure limit waiver, said Christopher Kotterman, director of governmental relations for the Arizona School Boards Association.

They understood (the agreement for a special legislative session) to mean before the next Legislature comes in,” Kotterman said.

“Obviously that hasn’t happened yet and school districts are anxious about this because they got a significant increase in their budgets, which they are grateful for,” Kotterman added, “but some of them feel they can’t fully commit the money until they are sure the Legislature is going to override the expenditure limit because they don’t want to have to cut it after the fact.”