Arizona Legislature waives spending cap for schools to avert crisis

PHOENIX — Arizona schools won’t have to immediately cut their budgets or possibly lay off teachers and close schools.

On a 23-6 margin Monday, the state Senate gave the Legislature’s final approval to waiving the voter-approved constitutional cap on K-12 spending by public schools.

The move, which is good for just the balance of this school year, will prevent cuts estimated at more than $1.1 billion between now and June 30, or about 16% of each school district’s current spending.

Monday’s vote came just days before the March 1 deadline for lawmakers to act.

The House approved waiving the cap on a 45-14 vote week. The measure, now having gotten the necessary two-thirds vote of each chamber, takes effect immediately, as Gov. Doug Ducey gets no say in the matter and deflected all questions about what he thought of the move.

Senate President Karen Fann, R-Prescott, chided unnamed individuals she said sent texts “basically bullying and threatening” some Republican lawmakers who were opposed or uncommitted to waiving the school spending cap. “This is not acceptable,’’ she said. “This is not the way we do things here.’’

Fann insisted, despite the Senate’s vote coming just days ahead of the deadline, that it had always been her intention to act and to get the necessary votes. She said even some of those who were hesitant about approval eventually recognized what was at stake.

“We realize the importance of school funding,’’ Fann said. “Our job is to make sure the kids stay in school. They’ve lost enough education already by being withheld (from class) because of COVID and other things.’’

But while all 14 Senate Democrats voted for the measure, Fann was unable to corral the votes of seven of the 16 Republicans — six who showed up to vote against it plus Sen. Kelly Townsend, R-Apache Junction, who already had said she was opposed but missed Monday’s vote.

At issue is a 1980 voter-approved constitutional amendment that caps spending at then-current levels, with annual adjustments for inflation and student growth.

The Arizona Constitution allows lawmakers to approve waivers, and they had done that twice in the past before Monday’s third time.

This year, the failure of lawmakers to exempt some other previously voter-approved K-12 spending from the cap, coupled with a decline in last year’s enrollment due to COVID, put the limit at more than $1.1 billion in excess of the budgets already approved by lawmakers.

That fact has been known for months. But it took until now to get legislative action.

Several Democrats who spoke on the Senate floor Monday in favor of the waiver said it made no sense to give schools the money and now prevent them from spending it.

But much of the rhetoric came from Republicans opposed to waiving the cap.

Sen. Vince Leach, R-Tucson, voted “no” even though he said he attempted to get a permanent fix for the cap two years ago, which he said was sidelined by the pandemic.

Since then, he said, the political climate has changed, at least in part because parents had to deal with schools that closed during the pandemic. That’s not all, he said.

“Parents all of a sudden started recognizing what was being taught to their children,’’ he said. “And I don’t know what was more problematic: the fact that they weren’t in school or they were being taught.’’

Leach said the answer is not to waive the limit, but instead to have “backpack funding,’’ where state aid follows each child to whatever school the parent chooses, whether public, private, parochial or home schooling.

Sen. Michelle Ugenti-Rita, R-Scottsdale, had similar objections to waiving the cap and allowing schools to spend the money.

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“They have injected our kids with fear and anxiety,’’ she said, accusing schools of politicizing COVID. But all the schools want to talk about is the need for more money, she said.

“Money isn’t going to fix it because money’s not the problem,’’ Ugenti-Rita said. “We’re capitulating to educational extremists who are holding our kids hostage.”

She said parents aren’t asking for more spending. “What they’re talking about is the bureaucratic-educational machine taking advantage of children — abusing them, in my opinion — not listening to parents, and continuing to do the same thing they’ve always done: complain about money.”

Sen. Sonny Borrelli, R-Lake Havasu City, who also voted against the waiver, complained that educators do not give Republican lawmakers credit for legislative actions. The result, he said, is that education funding makes up half the $12.8 billion state budget, a figure he claimed gets lost in “the lie from the educational-industrial complex and the shame-stream media.’’

His Exhibit No. 1 was the 20% pay raise for teachers approved by the Republican-controlled Legislature in 2018.

But Senate Minority Leader Rebecca Rios, D-Phoenix, said this wasn’t anything the Republicans actually wanted to do. In fact, she pointed out, Ducey’s proposed state budget for that year had proposed just a 1% pay raise.

It was only after educators descended on the Capitol, Rios said, that lawmakers and the Republican governor relented.

Other Republicans who until now had refused to commit to waiving the limit said they agreed to go along after they received certain assurances.

Sen. J.D. Mesnard, R-Chandler, said his big concern is a still-pending lawsuit over the legality of Proposition 208.

That 2020 voter-approved measure sought to impose a 3.5% surcharge on the taxable income of individuals above $250,000 to raise more than $800 million for K-12 education.

However, the Arizona Supreme Court said the levy cannot be imposed if the revenues would cause the state to exceed the spending cap — the same cap at issue here. So the justices sent the case back to a Maricopa County judge, who has yet to rule on whether there was a legal way to raise and spend the money.

Mesnard, who opposed Proposition 208, said he feared that if lawmakers set a precedent this year, the judge would use that to conclude it is possible to collect the additional revenues.

What changed his mind, Mesnard said, was assurances that Monday’s vote dealt only with the spending cap for the current school year. The issue before the judge is what happens in the 2022-2023 budget year.

Sen. David Livingston, R-Peoria, said he agreed to go along because of the crunch, as schools already allocated the funds through the June 30 end of the fiscal year. But he warned colleagues this doesn’t permanently solve the issue, saying there already are indications school spending for the coming fiscal year will exceed the spending cap by up to $1.8 billion.

Fann, who is leaving the Senate at the end of this year, agreed there needs to be something more permanent.

“When this was set in 1980, we didn’t have Chrome tablets or whiteboards or any of the stuff we have now that teaches our kids,’’ Fann said. “We had school books and chalkboards and all kinds of things that didn’t cost near as much.’’

She said the focus should be less on artificial limits, and having to revisit the waiver over and over, but on the larger issue of what it takes to educate children.

Right now, she noted, per-pupil funding is about $14,400 a year. That figure, however, includes all local, state and federal sources; state dollars total about $6,600.

“Is that enough?’’ Fann said. “It might be in some districts, it may not be in other districts.’’

Rios said she is not apologetic for pushing for more funding, citing figures that show Arizona close to dead last in state funding. And she agreed with Fann that there needs to be a more permanent solution, calling the cap “an antiquated, arbitrary, outdated limit.’’