Tuesday, October 27, 2015

Arizona education funding deal's devilish details

The Daily Star has a report from Howard Fischer (Capitol Media Services).

A trial court ruled last year that the state for years has illegally ignored a 2000 voter-approved mandate to boost aid to education annually to account for inflation. Maricopa County Superior Court Judge Katherine Cooper pegged the current shortage at about $330 million, a figure that over the next decade, with inflation, would total about $3.8 billion.

And that doesn’t include another $1.3 billion schools claim they are owed for missed payments going back to 2009.

By contrast the package awaiting legislative action has a price tag of $3.5 billion over the same period [the next decade].

Where does the $3.5 billion come from?

Republican lawmakers were still being briefed and declined to comment. But Democrats, who were left out of the negotiations, have concerns.

Most significant is that the lion’s share of the new funds comes from nearly tripling the amount of money withdrawn each year from the state land trust account for the next decade. These are the proceeds from the sale and lease of the 9.2 million acres left of what the federal government gave Arizona when it became a state in 2012, legally earmarked for education.

House Minority Leader Eric Meyer said that’s not necessary.

"We would have used dollars that are sitting in the general fund now to fund our schools," he said. That comes close to $800 million between the cash left over from last fiscal year and what’s in the state’s "rainy day" fund.

The concern, Meyer said, is that larger withdrawals from the trust mean less money at the end of the decade, money that will be needed for students in school at that time.

Quoted in The Republic/azcentral.com report, State Treasurer Jeff DeWit shares that concern.

Treasurer Jeff DeWit has been critical of Ducey's original proposal to withdraw additional funds from the State Land Trust. The current withdrawal is 2.5 percent. He said he hadn't seen the most recent plan in writing, but was concerned about what he'd heard.

"There is a hard-and-fast line we cannot cross. We cannot spend principle," he said. "We can go up to 3.75, but that's the best number everyone agrees we can do without spending principle. That's the safe number."

What remains to be done to realize the deal?

The schools appear to be on board with the deal because of some of the guarantees of sustained funding and the inflation increases. More snippets from the Star's report follow.

Tim Ogle, executive director of the Arizona School Boards Association that has led the multi-year fight, said Monday he is pleased with the deal. And he said it should be no surprise schools are willing to settle the lawsuit and put the fight behind them.

In many ways, Ogle said, this new deal is pretty close to what the schools offered last year, even though it is not quite what they had hoped for when they sued in 2010.

The legislature needs to be convinced.

Katie Hobbs, Meyer’s Senate counterpart, said her members still believe that schools need more money than is in the deal.

But with the schools satisfied with the deal, do Democrats go along?

"We’re working on that now," Hobbs said.

The governor said he recognizes he still needs to sell this to the legislators.

And the voters need to approve the increased withdrawals from the state land trust.

And even if lawmakers go along, the plan needs voter approval because it involves changing that formula for withdrawing funds from that trust account.

Everyone breathe a big sigh of release. Problem solved. Until the schools figure out that 10 years from now the money goes away. Check this one:

There is language in the plan that could allow the extra money to go away entirely. And after 2026, under certain conditions, schools actually could have to give back some of the previously granted inflation aid.

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