The Scottsdale Unified School District Governing Board voted down what appears to their only option to paying back a $27.6 million tax bill created by the Qasimyar v. Maricopa County lawsuit.
The Scottsdale Unified School District has no plan on how to pay back $27.6 million it owes the county due to an error made my the Maricopa County Assessor’s office.
A group of property owners claimed the assessors office appraised their homes wrongly between 2015 and 2021 because the properties changed classification from an owner-occupied residential home to a rental or secondary home, or vice versa. The homeowners took the county to court in 2016, Qasimyar v. Maricopa County, and recently won their case, leaving Maricopa County school districts, fire districts, cities and towns having to pay back more than $329 million, with school districts on the hook for nearly $150 million. At $27.6 million, Scottsdale Unified was the hardest hit school district in the county.
The district governinging board tackled the issue of how to pay back the money during it’s June 25 meeting, but could not come to an agreement.
The district’s chief financial officer Shannon Crossier said there is about $10 million in unspoken for cash on hand that could be used to pay down part of the bill. Crossier then proposed selling up to $25 million in Tax Anticipation Notes to the county to pay the bill.
Board President Dr. Libby Hart-Wells and boardmember Julie Cieniawski supported the idea but boardmembers Carin Werner and Amy Carney voted against it. Boardmember Zach Lindsay was not present at the meeting.
“What I’d like to see is you come back with some different options instead of going straight to $25 million,” Werner said.
Carney said she was concerned that the meeting was the first time discussing the issue.
“I know in Paradise Valley, they were dissucing it with the board in May so why do we have to approve this today?” she said. “I’m very skeptical of approving up to $25 million. There’s nothing written on this. Why do we have to do this today. Why can’t we come back with more concrete numbers?”
Superintendent Dr. Scott Menzel replied, “We don’t know when they are going to sweep the cash. If the state takes a larger chunck than the $10 million that we have, we don’t have the money to be able to provide the cash and you still have to be able to make payroll, you still have to pay your accounts payable. This allows the district to ensure we have the money when the county is going to sweep the cash. We don’t have a schedule for that and that’s part of our challenge.”
Jim Giel with Gus Rosenfeld said there simply aren’t any other options.
“There have been some things bandied about but really the TANs are what is in state law,” he said. “Even though TANs already existed we had to get a bill put in there to extend the life of the tans four years. That is the county’s solution to this. There is no other source of funding. There’s no other solution to this other than some other change in law, which of course couldn’t happen this year. It would have to wait until next session and frankly I don’t know the state Legislture’s appetite to throw money at this problem ... my thought was maybe the county would be helpful in some regard to make this be diminished somewhat. That is not coming as far as I’m seeing.”
Giel also suggested the district governing board might be more comfortable approving a lower amount, such as $20 million since it does have $10 million in cash on hand.”
He added that county treasurer has limited the lending rate to below the prime rate of 8% and has pushed the pay back period to four years.
But Carney wasn’t having it.
“I’m just not comfortable placing this burden on the tax payer and I would like to see us come up with solutions to not impact the tax payer.”
Dr. Hart-Wells fired back, “Do you have a solution?”
Carney replied, “No I said I would like to see us come up with a solution.”
Dr. Hart-Wells pushed, “Do you have one? They’re the subject matter experts and they’re telling us this is our solution right now with the state of affairs.”
Carney replied, “That’s why I was asking about the carried forward because I know we have in excess of that so I was hoping we could pull from there and other ... ”
Dr. Hart-Wells interupted, “Not legally.”
Which lead to an awkward pause.
And the vote to go with the Tax Anticipation Notes ultimately failed.
“The district is now potentially risking not being able to pay its bills,” Dr. Hart-Wells said after the vote. “Excellent.”
J. Graber can be reached at jgraber@iniusa.org. We invite our readers to submit their civil comments pro or con on this issue. Email AZOpinions@iniusa.org.
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