PHOENIX — Top legislative leaders took the first steps Monday to ensure that Arizona public schools don’t have to slash more than $1.1 billion from their budgets in just two weeks.
House Speaker Rusty Bowers, R-Mesa, is introducing legislation for a one-time waiver of what's known as the “aggregate expenditure limit.” Bowers, by virtue of his position, can virtually ensure the measure goes through the House Ways and Means Committee and gets to the full House ahead of the March 1 deadline.
Senate President Karen Fann, R-Prescott, is introducing “mirror” legislation in her chamber. That means both measures can get hearings at the same time and cut the red tape to final approval.
But Fann told Capitol Media Services that she is still lining up the necessary votes for approval.
Busting the limit, even for one year, takes a two-thirds vote of both the House and Senate. All14 Democrats in both chambers are expected to support it.
On paper, that means the measure needs just nine more votes in the 60-member House and six in the 30-member Senate.
But Sen. Juan Mendez, D-Tempe, has not been in attendance since session began. As the parent of a newborn, he has decided to stay home after he was denied the opportunity to vote remotely.
So now Fann needs seven GOP lawmakers.
At the same time, however, there has been resistance by some Republicans to approving the waiver, even though it only allows schools to spend money they already are appropriated for this school year.
“I cannot support raising the school spending cap until we have ESAs for all students,” Sen. Kelly Townsend, R-Mesa, said last month.
Townsend is referring to what are known as “empowerment scholarship accounts.” More familiarly, they are vouchers of public funds that allow parents to send their children to private or parochial schools or even permit home teaching.
Fann said she recognizes there is resistance and efforts to link other policy questions, like vouchers.
“Those are all issues that we need to deal with,” Fann said.
“Everybody is entitled to her vote,” she continued. And Fann also said this isn’t one of those measures where GOP leadership will demand party loyalty.
Bowers, for his part, said that as far as he is concerned, the issue of waiving the spending cap will not be tied to any other issue. He said that includes not just the question of expanded vouchers but also any effort to re-enact a $1.9 billion tax cut approved last year which has been delayed because foes got enough signatures to hold up enactment until voters get the last word in November.
The news cheered state schools chief Kathy Hoffman who less than a week ago called the upcoming deadline a "ticking time bomb'' for Arizona schools.
"The best birthday present the legislature can give our state is immediate passage of HCR 2039 and SCR 1050 to suspend this year's budget cap,'' she said, referring to the fact that Monday marked 110 years since Arizona was admitted to the Union.
"Districts should not have been put through the undue stress of planning for these cuts,'' Hoffman continued in her prepared statement. ``But I'm grateful a bipartisan solution is on the horizon.''
At the heart of the issue is a 1980 voter-approved constitutional amendment. It caps total spending on education at then-current levels, with annual adjustments for inflation and student growth.
This year, however, state schools chief Kathy Hoffman calculated that the total spending — money already appropriated to schools — will exceed that cap by $1.154 billion, about 16% of what is in each district’s budget.
More to the point, those cuts would come out of current budgets if there is no action by March 1. And school officials have said kind of loss, coming with less than three months remaining in the fiscal year to make those cuts, likely would mean laying off teachers and other staffers.
The reason the cap is being busted comes down to two unusual issues.
One is that the adjustments are based on the prior school year’s enrollment. And that figure was depressed by so many kids not attending class due to COVID-19.
The other is a bit more technical.
In 2000 voters approved a 0.6-cent sales tax levy to help fund teacher salaries. And that measure was made exempt from the spending cap.
With the levy set to expire, lawmakers agreed to an extension through 2041. But they did not waive the cap. And more than half of the excess is due to that factor alone.
Bowers made it clear he expects the measure to pass.
“I don’t introduce bills like this for fun,” he said. “It has a purpose. The purpose is to resolve this problem.”
He also said it is not contingent on what the Arizona Supreme Court does with a pending motion by Fann and him to get a final ruling on whether the 3.5% surcharge on income taxes for the wealthy can or cannot take effect.
The issues are somewhat linked.
In a prior ruling, the justices said voters had the legal right to approve Proposition 208 in 2020. That additional tax on incomes of more than $250,000 for individuals and $500,000 for married couples filing jointly would raise more than $800 million a year for K-12 education.
But the justices said they could not tell if the amount raised, by itself, would bust the aggregate spending limit, the same limit at issue here, sending the issue back to a trial judge. And with no ruling apparently forthcoming, Bowers and Fann asked the high court to take the case back and rule, once and for all, that Proposition 208 is void because the money raised could not be spent.
Bowers said that the new legislation introduced Monday ensure that it covers just the amount schools already have — and not anything additional that they might otherwise get in the coming school year through the 2020 initiative.
He acknowledged that lawmakers also have the power to ask voters to permanently repeal the spending limit. But that’s not in the cards, Bowers said, at least not now.
“Some have proposed, in the future, addressing the whole issue in perpetuity,” he said. “But this is just to take care of last year, get it out of the way.”
And Bowers said it should calm the fears of educators, some of whom have rallied and lobbied lawmakers to finally take action before the March 1 deadline.
No date has been set for a hearing on either measure.
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