Arizona school funding deal may lack votes

PHOENIX — School officials and other groups that advocate for children are making pleas to lawmakers to accept a funding deal that some question.

The push comes as legislators returned to the Capitol late Wednesday in special session to start debating the plan to finally end a lawsuit over their failure to meet legal obligations to properly fund schools. It provides an additional $3.5 billion over the next decade.

But it is the details — and some potentially monumental loopholes — that have raised questions. And that could leave the package short of the votes needed for final approval on Friday.

That fear resulted in a group called Stand For Children buying radio ads urging voters to “call your legislator (and) tell them to vote yes on the special session education proposal.”

The questions start with the fact that $2.1 billion of the total comes from the state land trust account — money that already belongs to public schools and is kept in a perpetual trust, with earnings distributed annually.

Heidi Vega, spokeswoman for the Arizona School Boards Association, said even some of her own organization’s members questioned what seems to be “paying a bill but you’re going to be taking it out of my own wallet.”

She said it’s not that simple, however. “Yes, that money is for education,” Vega said of the trust. But how much schools get each year is governed by constitutional limits.

“It’s not something that we can do with what we want, whenever we want,” Vega said.

That’s why the plan needs not only legislative approval but voter ratification in May.

The deal also gives schools only about 72 cents of every dollar that Maricopa County Superior Court Judge Katherine Cooper ruled the state owes the schools. Cooper said lawmakers were required to immediately add more than $330 million to schools’ budgets to fulfill a 2000 mandate by voters to adjust aid to schools each year to account for inflation.

But the state appealed that ruling. And a judge has yet to rule on a separate claim by schools that they are entitled to another $1.3 billion to make up for inflation dollars not provided since 2008.

“This would be an immediate opportunity, an immediate outlet to feed the schools that are dying right now,” Vega said of the settlement. She said the alternative is pursuing the litigation — however long that takes.

“How much longer are we going to have to wait?” she said. “The people who are suffering are our students and our teachers.”

The new dollars are unlikely to move Arizona from its position of being among states that provide the lowest amount of aid to schools. Education advocates have said that widely reported information makes Arizona unattractive to companies seeking places to move or expand.

Daniel Scarpinato, press aide to Gov. Doug Ducey, said the news of the settlement should help.

“It puts us among the states in the country putting the most additional dollars into our schools,” Scarpinato said. “And that’s something that’s going to be a loud statement to the country that Arizona values public schools.”

Tim Ogle, executive director of the Arizona School Boards Association, said it’s important not to call this an “education funding plan.” Instead, he said, it should be seen as a “correction” by lawmakers of their failure to meet the voter mandate for inflation.

“This puts schools back in the neutral position” allowing them to seek new money next year, Ogle said.

To get the votes in the GOP-controlled Legislature, the deal has various “triggers” that allow lawmakers to suspend inflation payments — and even, in some cases, take money back that they previously gave to schools.

Beginning in 2026, if state spending on education reaches 49 percent of the total state budget, inflation funding is suspended and lawmakers can reduce K-12 funding by the amount of the prior year’s inflation aid. And if it hits 50 percent, schools can be forced to give back twice the amount of the previous year’s inflation cash.

Current K-12 funding is about 43 percent of the state budget, with projections of it hitting 46 percent by 2025.

That concerns Dana Naimark of the Children’s Action Alliance.

“Politicians who don’t support public schools can play many games with the budget that will trigger this formula and get them out of their commitments,” she said.

“Whenever you are in negotiations, there’s no perfect deal,” said Ogle, of the Arizona School Boards Association. “Everybody comes away feeling like they had to give on things and they got other things. In doing the economic modeling, we were comfortable with the entire package.”

Naimark agreed, saying her organization supports the deal.

Other provisions allow the state to suspend payment in any year when growth in employment and sales tax receipts falls below 2 percent, with a mandatory suspension when those growth numbers drop below 1 percent.

But Ogle said the deal is structured so that schools essentially recoup any lost inflation aid once the economy recovers.

Naimark said there are other troubling details, including an entirely separate trigger that lets lawmakers cut back on school funding if the value of the land trust account dips.