Feb 212014

By Tammy Gray
Holbrook schools could receive an additional $500,000 in funding in the upcoming budget year if the State of Arizona decides to make good on a voter-mandated inflation adjustment to education funding.
“The legislature illegally ‘skipped’ the voter approved/mandated inflation funding adjustments during the recession,” Business Manager Garry McDowell noted. “If the skipped per student funding inflation factor is restored for the upcoming fiscal year 2015 funding cycle, it would increase our district’s funding/budget capacity by over $500,000.”
For four years during the recession, the state did not include the inflation adjustment in payments to schools, even though it was required as part of a measure passed by voters in 2000. That same measure increased the state’s sales tax rate by six-tenths of a percent to raise revenues for education.
A lawsuit was filed on behalf of Arizona schools to restore the funding, and the Arizona Supreme Court ordered the state to make the adjustments. The battle over the amount of those adjustments isn’t over, though, since the state and education advocates disagree over whether the inflation adjustment should be based on the last amount paid or on the amount that the state would have been paying had it followed the mandate the entire time. The difference is more than $200 per student. The state has set funding at $3,327 per student, but if the inflation adjustment had been made each year, the funding level would be $3,560 per student.
It would cost the state approximately $330 million in the upcoming fiscal year to make the adjustment to include inflation for the four skipped years. If it did so, the Holbrook school district could see an additional $500,000.
“Several sources are optimistic the legislature will allow this to happen,” McDowell noted.
That amount is only a small portion of what schools could potentially receive. A push is on to force the state to make the payments it skipped for four years. The total, according to the joint legislative budget committee, is nearly $1.3 billion. State lawmakers say that there is not enough money in the budget to include an additional $330 million in adjustments, let alone $1.3 billion in back payments. Governor Jan Brewer has asked lawmakers to add $70 million to the education budget in the upcoming year.
State legislators included $82 million in the budget for a 1.8 percent increase in school funding for the current fiscal year.
The court case is ongoing, with the state Supreme Court expected to send it back to Superior Court to decide whether the inflation adjustment should be based on the most recent amounts paid or on the amount that would have been paid if the inflation adjustment mandate had been followed all along.