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12:50 PM Wed, Nov. 21st

Legislators warn districts to prepare for budget cuts

PRESCOTT VALLEY – Local school district superintendents have widely ranging reactions to a letter from Arizona State Senate and House Appropriations Committee chairmen containing an "unambiguous caution" to school districts statewide about budget cuts.

Some call the Feb. 26 letter from Sen. Robert Burns and Rep. Russell Pearce "threatening" and "premature." Others believe that it constitutes a warning about possible budget cuts next year.

Burns and Pearce note that the state is facing its worst general fund budget crisis in its history.

"The current revenue flow is $5.5 billion and general fund spending, at its current levels, is $6 billion, an obvious $500 million deficit," they write.

Arizona's revenue growth continues to decline with no signs of improvement in the near future, they note, and legislators have not proposed tax legislation to pay for the outspending of available resources.

They maintain that the governor's budget and the Joint Legislative Budget Committee (JLBC) budget propose "one-time fixes" through June 2004, but that those lead to worse financial problems in fiscal year 2005 – possibly a deficit of $1.5 billion to $2 billion.

"If we don't resolve to hold spending in check, it will be very difficult, and perhaps even impossible, to provide the usual protection K-12 funding has enjoyed in previous years," their letter indicates.

Linda Nelson, Chino Valley Unified School District (CVUSD) superintendent, called that passage "inflammatory."

"School districts have not had 'usual protection,'" she said. "The state has refused to fund (the legally required 2 percent inflation rate). This is absurd and is an insult."

Humboldt Unified School District Interim Superintendent Roger Short said the letter lays out the state's potential fiscal problems.

"In a way, it's somewhat presumptive to assume there will be K-12 cuts," he said. "I think the legislative and budgeting process needs to move forward before we can put total credence in this letter and see how it comes out."

Kevin Kapp, Prescott Unified School District (PUSD) superintendent, said he expected news of this sort, but parts of the letter bothered him.

"Arizona school districts have not 'enjoyed' any 'protection' for 12 years," he said. "K-12 funding should be automatic in the sense that public education is the state's number one priority."

The letter continues, "Understanding that the majority of your budget is personnel driven and covered by contracts, we are therefore suggesting that all superintendents keep in mind the importance of not getting painted into a corner relative to your own budgets."

Nelson said the underlying implication is that districts should be cutting faculty and staff.

"That's none of their business, frankly," she said. "They tell us not to paint ourselves into a corner, but we can't even afford to buy the paint to do it with."

Mayer Unified School District Superintendent James H. Nelson (no relation to Linda Nelson) said legislators should be increasing taxation instead of reducing it through 121 sales tax exemptions for businesses.

"You can get a haircut and not pay tax, go to your lawyer to get your taxes done and not pay any tax, and yet our schools are forced to pay sales tax, and we provide a greater service – quality of education of our future leaders – than these businesses," he said.

James Nelson said the state should give districts stability in the financing formula, instead of changing it yearly. Further, districts want a mechanism to build up large cash reserves for lean times, rather than the current state reserve cap of 4 percent per year.

"I support a tax base that will provide proper funding for education and then have legislators keep their hands off it," he said. "History shows that the legislators have used education as a means to reduce the state deficit, and they are still attempting to do that."

For PUSD, "the letter does not imply that we should cut faculty and staff, but it does imply that we would not be able to fill positions" for employees who retire this year, Kapp said. PUSD already has placed a freeze on new hires.

The letter concludes, "We believe it imperative that this unambiguous caution be provided in an effort to help you from being caught off guard."

Kapp said nothing has caught PUSD off guard. At Tuesday night's school board meeting, he presented a "worst-case scenario" budget that looked much like what Burns and Pearce warn superintendents about.

Barbara Robey, director of governmental relations and public affairs at the Arizona School Boards Association (ASBA), called the letter "premature."

"Budget negotiations are not over yet," she said. "The (JLBC) budget is prepared for the two appropriations chair people, and how much support there is for that budget is not apparent yet."

Kapp said Burns and Pearce's letter "implies that the final budget will look very similar" to the JLBC budget, which he refers to as the "cuts budget." However, as Linda Nelson pointed out, legislators will not finalize the budget until July, so late February seemed early to send out such a letter.

"The letter was somewhat unnecessary," Kapp said, "and basically, it perpetuates the doom and gloom atmosphere surrounding the state budget crisis."