Earlier this spring, Arizona public school educators breathed a sigh of relief when the state Legislature approved the aggregate expenditure limit allowing schools to spend money legislators already budgeted for public education.
Had this not happened, Arizona schools would have had to reduce spending this academic year by a cumulative total of more than $1.2 billion, or a budget cut of about $43 million for Peoria Unified School District.
But the AEL has not gone away and will require another approval from the Legislature if action is not taken to change the budget policy. This could translate into staffing reductions and pay reductions, furlough days, cuts to stipends, professional development, extracurricular activities, or other cuts.
So as the district finalizes its fiscal year 2023 budget, PUSD officials say the AEL is still a concern and they are cautious, holding off to see what the Legislature does, if anything.
District CFO Michelle Myers said there has been no sign yet if the Legislature will act on the AEL this session.
“Depending on final action by the Legislature, there is the potential the district may need to call additional budget meetings before the final (budget) vote. We are watching this closely,” Myers said. “If there is not a long-term fix, a permanent solution, be that voter action or legislative action, we would have to plan for something similar to what we had earlier in the spring.”
The budget team is recommending a 3% increase to the base pay of all employee groups at an estimated annual maintenance and operations cost of about $5.2 million.
This is the lowest pay increase for certified-classroom teachers since 2018.
Governing board member Rebecca Hill said she is concerned about pay increases with the AEL still up in the air.
She asked: What if they pull out the rug and by 2023 the district has made promises it can’t keep, or if nothing else, makes it very difficult to provide pay increases?
“What if AEL does not go away? There are a lot of stipends (in the proposed budget) and a lot of increases in pay, and a lot of extra money going out. Is that really wise? I mean, is that an overstep since we don’t know what the future is going to be? I come from a family that budgets and you don’t spend money that you don’t have, you know, and if you don’t know the future you just don’t spend it,” she said.
Myers said because of the situation, the budget team is bringing forward a budget with confidence, planing to manage it with fidelity in navigating the AEL moving forward.
“We’ve looked at this and we’ve said, we feel comfortable and this is why we are bringing forward what we believe to be minimum recommendations for next year,” she said. “We actually slowed down our budget process to get our bearings because there were so many unknowns, and one thing that I will say, the projections that we are bringing forward are within our funding — be it M&O or capital or classroom site fund — that if there was AEL concerns that we would have, we have identified resources we could go to early in the year to start pulling back.”
Those “pull backs” could include a range of cuts.
Myers said fiscal year 2023 expenditure limit reductions because of the AEL would require a district-wide evaluation of operations and expenditures to fully address any required budget modifications next fiscal year.
Cuts could include: carryforward/budget reserves, calendar modifications, a hiring freeze, staffing reductions through attrition, pay reductions, furlough days, cuts to stipends, professional development or extracurricular activities.
In 1980, Arizona voters passed a measure that limits how much K-12 schools can spend in a school year, which was done when the state implemented its school funding formula. It is known as the aggregate expenditure limit, which is the total amount that K-12 schools are spending as a whole each year.
Charter schools aren’t included in the spending limit because they didn’t exist in 1980.
For many reasons, the AEL will be exceeding its limit into the future.
One reason is that Proposition 301 was passed by voters in 2000 to levy a 0.6% of a cent sales tax to support education. It was set to expire in 2020 and was extended by the governor and Legislature in 2018. Voters exempted funding from Prop. 301 from the expenditure limit by passing Prop. 104 in 2002; however, when Prop. 301 was extended by the Legislature in 2018, a similar provision to exempt the funds from the limit was not included, according to the Education Forward Arizona website. This means the funding Prop 301 generates, which is over $600 million, now has to be counted toward the limit, states the website.
Chris Kotterman, director of governmental relations for Arizona School Boards Association, said the issue of exceeding the limit remains, primarily because the continued 0.6% sales tax for education, formerly Prop. 301, is not exempt from the limit, whereas Prop. 301 revenue was specifically exempted.
Because the base calculation for the AEL is in the Arizona Constitution, any changes to the calculation would require a constitutional amendment, which must go to the voters, Kotterman said.
“There is a lot of talk around the Capitol right now about all kinds of education funding issues, and the AEL is routinely acknowledged as an issue that needs to be addressed, but so far no concrete plan has been proposed,” he said. “But again, any plan would have to be referred to the ballot by the Legislature.”
When the AEL was waived earlier this year, PUSD governing board member Bill Sorensen said he was grateful, but he still has yet to hear any logic or reason why it’s still in existence considering how outdated it is. He said the law needs to be changed, adding there will continue to be collateral damage if such an archaic policy continues to be used.
“Sometimes people make comparisons between public and private. There’s no private industry that would ever change a budget three-quarters of the way through with no massive effect because a CEO in 1980 said they weren’t going to spend money,” he said. “This is going to hurt our district when people don’t know if they are going to get paid. It’s going to be more difficult to retain, more difficult to hire. ... The political posturing hurts our district and it hurts me that it hurts our district because ultimately it hurts our kids. And it hurts the teachers we can put in the classroom.”
Philip Haldiman can be reached at phaldiman@iniusa.org, or on Twitter @philiphaldiman.
Meet Philip Haldiman is an award-winning journalist who most recently took first place for investigative reporting in 2023 from Arizona Newspapers Association. He joined Independent Newsmedia, Inc., USA, in 2015, covering Sun City West his first year. Since 2016, he has covered the city of Peoria. Prior to coming to INI, he was a reporter with The Arizona Republic for seven years, covering numerous cities throughout the Valley. Before that, he was a freelance writer.
Community: Haldiman spearheads the Peoria Independent Hometown Heroes Awards program, honoring local individuals and businesses that give back to the community. He has hosted local candidate forums over the years and is a member of the Society of Professional Journalists. Haldiman also served as a member of the Journalism Program Community Advisory Board at Glendale Community College. Outside journalism, Haldiman served as a member of the city of Peoria Complete Count Committee for the Census, 2019-2020. Lastly, he has served as a member of his HOA governing board since 2021.
Education: Arizona State University with a BA in Journalism and Mass Communications and a BA in Theater.
Random Fact: Haldiman is a fourth-generation Arizonan as well as wrote and produced an autobiographical comic book about his time spent in Hollywood and his life as a cult film star.
Hobbies: He enjoys hiking Arizona’s mountainous landscapes and is currently working on a play for the stage.
By 
Comments
No comments on this item Please log in to comment by clicking here