Nov 142012

By Nick Worth
The failure of Proposition 204 at the polls in the Nov. 6 general election will have far-reaching consequences for the educational system in Arizona. The proposition sought to make permanent a one-cent sales tax increase, which had been in place since 2010.
Voters defeated the measure by a wide margin in the election, costing the state budget a $1 billion revenue stream that was to be earmarked primarily for education and transportation projects.
One of the measure’s high-profile opponents was Governor Jan Brewer. Brewer was quoted in a story by Howard Fischer of Arizona Public Radio (APR), which aired on KNAU radio, as being opposed to the measure because only $90 million of it was tied to accountability measures, such as student testing.
“If we’re going to do things, we need accountability,” Brewer said. “That’s what it all comes down to. Accountability.”
Locally, school administrators are taking a “wait-and-see” attitude as far as what effect the proposition’s defeat will have on their budgets.
“At this point it’s just not known,” said Garry McDowell, business manager for the Holbrook School District. “Obviously, when the state loses a billion dollars out of a state budget of eight billion, it will have an impact.”
Although Brewer announced Aug. 5 that the state has a cushion of approximately $850 million on hand going into 2013, some lawmakers still expect to see a shortfall. Also, the one-cent sales tax will not actually be missed until the year 2015, since it is in place until May 2013, and will fund education and other projects through 2014.
“It will be up to the legislature this fall to figure out how to make up that shortfall,” McDowell said. “Our state funding is pretty meager for education already.”
McDowell said the state legislature would have to make cuts, most likely across the board, to all state agencies in order to balance the budget.
“Unlike the federal government, the state has a constitutional requirement to balance the budget,” McDowell said.
According to McDowell, education makes up approximately 40 percent of the state budget. The one-cent sales tax was generating approximately $1 billion, so he’s expecting about a 13 to 15 percent decrease in funding once the sales tax funds run out.
“The thing that’s scary is that because of the recession, schools have been cut already several times,” said McDowell.
According to the APR story, legislative budget analysts estimate nearly $600 million has been cut from education by the state since 2008.
Snowflake School District Superintendent Hollis Merrell said the loss of the sales tax will have a significant impact on his district’s funding.
“It’s about $1.2 million to our budget, but some of that we’ve already lost,” said Merrell. “We don’t expect to have any soft capital. We’re not getting any building renewal funds, and unrestricted capital funding has been cut.”
Merrell said “soft capital” is funding used for textbooks and classroom materials.
“None of that comes from the state now,” he said. “The building renewal fund is used for maintaining our buildings and that fund is also at zero.
“We don’t think they’re going to have to give additional cuts this next year, but after the tax is gone it could have the impact of a decrease in our funding,” said Merrell. “It’s a ‘no’ vote for education.
“This does put students at risk and makes it more difficult to implement the reforms schools have been working on recently,” Merrell explained. He said reforms such as common core standards, and teacher and principal evaluations always get pushed aside when there is a budget crisis.
“We were hoping some of that funding would have been restored if this had passed,” he said. “Arizona has had the deepest cuts to K-12 education in the U.S.”
He noted that the majority of money spent on the campaign against Prop. 204 came from out of state.
District 6 State Senator-elect Chester Crandell said some help may be on the way.
“We did a budget for the next three years and I don’t remember having any more cuts in there,” Crandell said. “In fact, we put $40 million back in per year for K-3 reading programs for a total of $120 million over the three years.”
Crandell said he knows school districts are asking for the restoration of the unrestricted funds and soft capital.
“Everybody realizes the school districts need to spend their money where they need it the most,” said Crandell. “I think the state legislature should realize the school districts are able to manage the money and use it where they think it is most needed.
“Not every school district is the same,” he said. “They all have different needs.”
He said he would like to change the way money to the school districts is handled.
“My proposal is to do away with those funds and put the money, approximately $300 per student, into their general fund so they can spend it where they want it,” Crandell said. “I think I can get some bipartisan support for that.”
If Brewer is correct, the absence of the sales tax, which she fought to have established as a temporary measure in 2010, can be made up for in other ways. She said now is a good time to start restoring some of the funds taken in those earlier cuts.
“We have to be responsible,” Brewer is quoted as saying. “We all know that. We’re not afloat with a lot of money. But we certainly have a balanced budget, a cash carry-forward and a rainy day fund. So we can do things.”