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Current year funding model penalizes schools

Sen. Steve Farley reviews the Republican budget plan Wednesday including a proposal to have the state help privately run charter schools borrow money at lower interest rates.
Howard Fischer/Capitol Media Services

Sen. Steve Farley reviews the Republican budget plan Wednesday including a proposal to have the state help privately run charter schools borrow money at lower interest rates.

PHOENIX – Efforts to vote on a new state budget stalled Tuesday as some House Republicans are objecting to what they see as short-changing public schools.

Concerns raised this week as lawmakers got a closer look at the $9.58 billion spending plan include:

• Insufficient money for charter schools sponsored by school districts;

• Questions about whether small schools are getting enough aid; and,

• A major change in how the state decides when to fund new schools, effectively penalizing those districts where voters have dug into their own pockets for buildings.

But the biggest sticking point appears to be a policy adopted last year of changing how aid to schools is calculated. That shift, set to take effect this coming school year, cuts school funding about $31 million.

Last year the state was facing an anticipated deficit. Now the state is running a surplus and has money in the bank.

But the deal hammered out between legislative leaders and the governor keeps the new funding formula.

Hoping to blunt criticism, the plan by the governor and leadership puts an additional $15.5 million into school funding.

But Rep. T.J. Shope, R-Coolidge, said that’s not acceptable. He said the entire $31 million needs to be restored – and in a more honest way than proposed.

“It cannot go to the Classroom Site Fund,” he said, which is what the plan proposes. That special account allows schools to get grants for things like teacher salaries and dropout prevention.

“Every school has the ability to draw down (from the fund), even some that are going to benefit from the current-year funding policy,” Shope complained. “We’ve got to go ahead and make sure it goes to the affected, declining school districts that are out there so they’re made whole.”

And while 125 school districts would get less under the new formula, more than 60 would end up winners.

For example, Chandler Unified School District would get an extra nearly $930,000. And Vail Unified would benefit to the tune of $506,000.

But the analysis done late last year by the Department of Education shows some big losses, too, like $4.5 million out of the Tucson Unified School District, $3.3 million from Gilbert schools, close to $351,000 out of Prescott schools and almost $1.5 million from the Amphitheater Unified School District.

Prescott Unified School officials say the impact to them gets doubled because of year-over-year reductions – essentially absorbing the impact of two years of declining student enrollment in a single fiscal year.

Historically, lawmakers expected local districts to make up those differences through local tax levies.

“It pits school districts against taxpayers, and we don’t like that,” Superintendent Joe Howard said. “It creates a double standard, especially with charter schools. They get tax money too, but it doesn’t cause a local issue.”

There are other issues that have some Republicans questioning whether they can support the budget.

One is a change in when the state will build new schools. Current law makes school construction an obligation of the state, a law put in place after the Arizona Supreme Court said it was inherently unequal to have each district, rich or poor, be responsible for new buildings and maintenance. Despite that, districts unwilling to wait for their share that have gone to voters to borrow money for construction will be penalized by the change.

There’s also a concern by some rural lawmakers about reversing what has been the trend of lawmakers to impose new obligations on counties without providing them the cash to do it. Rep. Karen Fann, R-Prescott, noted that recently included the cost of locking up juveniles.

Meanwhile, the budget includes expanding the state Supreme Court from five to seven members.

Chief Justice Scott Bales has said the workload does not justify the change. But the $600,000 move would give Gov. Doug Ducey the chance to immediately name two new justices.

At the same time, though, questions remain about whether universities are being shorted.

Last year’s budget-saving maneuvers cut university funding by $99 million. And, on paper, the new budget provides $32 million. But there’s less there than meets the eye: Just $8 million of that is to restore general funding that was cut.

Of the balance, $19 million is one-time funding - $8 million for University of Arizona; $7 million, Arizona State; and $4 million for Northern Arizona. And UA is supposed to use at least part of its share to start a veterinary school.

And $5 million of what is being provided to the universities is to add to what Senate President Andy Biggs called “freedom centers” started with seed money from Koch brothers’ foundations. Biggs is defending putting restrictions on the dollars to “teach our young people about the virtues of free enterprise.”

“This is an appropriate use of taxpayer dollars,” he said.

Daily Courier reporter Les Bowen contributed to this report.

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