Funding deal doesn't fix all Arizona school problems

Despite a $3.5 billion price tag over 10 years, the education-funding plan passed by the Legislature last week in a special session won't solve Arizona’s long-term school-funding issues, school leaders say.

The plan, if approved by voters in May, would pump $300 million to $400 million more a year into schools over the next decade — a small fraction of the state's $4.5 billion education budget.

Although all parties generally support the plan as a way to settle a longstanding lawsuit over school funding, school officials and Democratic lawmakers say this should be just the first step in boosting funding for schools that desperately need more. Republican and business leaders are touting the plan as bringing significant new money to schools, while generally avoiding discussions on whether additional education funding will be sought later.

When asked if the proposal was the end or beginning of long-term education funding discussions, Gov. Doug Ducey's spokesman, Daniel Scarpinato, said the proposal is a "huge boost to K-12 funding.

"It's a reason to celebrate," Scarpinato said. "It provides permanent certainties to schools and resources and is a huge addition to school resources, and these are the resources educators have said they need. There's always going to be discussions about education, but this is a significant increase for spending for our schools and is going to have a real impact on kids who are in schools now."

Arizona Chamber of Commerce and Industry President Glenn Hamer called the plan a huge win for schools.

"This is probably the most aggressive funding plan on the table in the country," he said. "We feel very strongly if we get these additional resources into the classroom, we’ll see continued measurable improvements in academic outcome."

But school leaders say the lingering problems the deal won't likely resolve include sagging teacher salaries, crumbling school facilities and the state's ranking near the bottom nationally in per-pupil spending.

"The public needs to know this doesn't move us up in the national rankings. When you look at year-to-year funding, we're still going be 48th," said Chuck Essigs, director of governmental relations with the Arizona Association of School Business Officials and one of the negotiators for the plaintiffs in the school-funding lawsuit. "It settles the issue of giving the schools annual inflation funding, at least for the next 10 years. But now, with the business community, governor and the citizens of Arizona, we need to talk about where do we want our schools to be. The job has just begun."

Rep. John Allen, R-Scottsdale, expressed frustration with the repeated mention of Arizona's low ranking on school funding during legislative hearings last week.

"We discourage excellence in our schools when all the talk is about input. This particular sector has become totally driven by inputs," he said. "Our outcomes are far outmatching our inputs, which used to be called a bargain."

Rep. Rusty Bowers, R-Phoenix, questioned how much money would satisfy schools and Democratic leaders.

"When is enough enough?" he asked. "If perfection is what we want in education and money buys education, where do those two lines cross? We say we want more money for teachers, but can those plaintiffs guarantee this is going to go into classrooms? Or will we get more magic blackboards first?"

JoAnne Chaffeur, a PTA president whose son is a sophomore at Prescott High School, has been closely watching news of the funding deal. She’s not happy about it.

“I think the state is trying to get out of paying what’s due to our kids,” she said. “And I think that the governor’s trying to take a shortcut ... and I don’t even know why they’d be negotiating something that was already decided upon. They should’ve been paying the inflation payments, and now they want to negate it and make it seem like they’re doing us a favor. This feels like a tiny Band-Aid but it’s not even a big one to cover the big ouch.”

School districts in 2010 sued the Republican-led Legislature alleging it didn't fully fund voter-mandated inflation. The courts last year ordered the Legislature to immediately pay schools an additional $331 million a year. Republican lawmakers appealed that ruling. The court had not yet ruled on a request from schools for an additional $1.2 billion in back payments.

The court order would have required an increase to the base funding level by about $240 per student. The proposal boosts funding about $173 per student, to $3,600, subject to annual inflation rates. Schools would get about $249 million more this year.

Schools would also get an additional $50 million a year over the next five years and $75 million for each of the five years after that. These payments equal about half of what the plaintiffs had asked for to make up for the years when the state failed to fund inflation.

"It's bizarre some people think putting $300 million into our education system is insignificant," said Rep. Warren Petersen, R-Gilbert. "That's going to make a dramatic difference to education."

Michael Hunter, vice president of State and Fiscal Affairs for the conservative Goldwater Institute, called the deal "a good solution to a very thorny problem."

"Any settlement would have been a challenge to the budget, but there are a lot of worse ways this could have gone," he said, adding that the lawsuit had to be resolved before other education issues could move forward. "There are several conversations that still have to happen in K-12 education. None of that was possible until this got resolved."

He said this settlement now opens the door for these other discussions, including Ducey's Classrooms First group that is working on reforming the school-funding formula. He said the focus now needs to turn to funding inequities.

Janice Palmer, lobbyist for the Arizona School Boards Association, one of the plaintiffs in the case, said they consider this a first step in boosting school funding.

"It doesn’t take care of the teaching profession. It doesn’t provide the resources necessary within our public school system. But it does address the inflation," she said. "The second this is passed, we need to get working on the next steps."

Republican lawmakers voted in support of the plan, which was introduced as three separate bills. Most Democrats voted for the bill that boosted funding, but against the bills calling for a special election and proposing to boost allocations from the State Land Trust. Democratic lawmakers said they were concerned the plan took too much money from the land trust, which is supposed to fund schools in perpetuity, but overall didn't provide enough funding for schools.

School leaders supported the plan.

"It represents, I think, a reasonable way to settle the litigation. It gives us virtually all of the money we were trying to achieve for public schools," said plantiffs' attorney Tim Hogan. "It gets money into the classrooms this fiscal year. It ensures we're going to continue to receive that money over the next 10 years, and it preserves inflation funding for the next 10 years and beyond."

House Minority Leader Eric Meyer was among the "no" votes on two of the bills, at least partly because he fears Republican leaders will use the deal to say they've solved the education funding situation and will reserve surplus general fund money for other pet projects or tax cuts. There is an estimated $250 million in ongoing surplus.

"Has anyone told you what the next step is? I’ve gotten no commitments or heard anything other than we’re not using the money we have now to fund education because there are other needs," he said. "This could be the last step, potentially."

Continuing to fight the battle over school-inflation funding in court could take years, with no guarantee schools would emerge the winner. Although the court has told the state it owes the money, part of the unresolved legal dispute is over whether the courts — because of the separation of powers in the state constitution — have the authority to force the Legislature to actually hand it over.

"We have students who have gone through more than half of their elementary-school grades and high school students who have gone through high school and graduated without having the funding that's tied to the inflation increases that voters approved back in 2000," Essigs said. "Do we continue to try and force the court to force the Legislature to do it?"

Cynthia Weiss, a member of the Cave Creek Unified School Board, said she understands the pressure on school officials to get money now rather than prolonging an already drawn-out legal battle. But that doesn't mean she's pleased with the deal. The Cave Creek district is the principal plaintiff in the lawsuit.

Although the plan sounds like a lot, when spread over 1.1 million schoolchildren, some say it doesn’t amount to much. Some school officials have estimated it would total about $200 to $250 more per student for this year, after subtracting the money the schools have already received.

“That doesn’t go very far,” Weiss said. "As a school-board member, I don’t feel good about this. As a mom, I don’t feel good about it.”

Weiss said she’s been working to increase school funding since her child was in kindergarten; her daughter is now a high-school freshman. By the time the settlement money finds its way into the Cave Creek budget, she said, “My child will be at ASU.”​

Democrats felt they had a better proposal: Their plan called for using the state's projected budget surplus and leaving the controversial land-trust fund alone.

Julie Erfle, executive director of the liberal-leaning group Progress Now, said the deal doesn’t provide new money for schools.

About 60 percent of the money would come from the state land trust, which is already earmarked for schools, with the rest being drawn from the general fund. The cost to the general fund varies over the next 10 years, from about $31.5 million to $106 million.

“We’re using the land-trust money not as additional money but to settle the lawsuit,” Erfle said. Last summer, Ducey had proposed using the trust-fund money to boost education funding, but his position shifted after he entered into negotiations with legislative leaders and education officials.

Echoing some Democratic concerns, Erfle said she was wary lawmakers are trying to leave room in the state budget for tax cuts, rather than sending more of the surplus to the schools. Ducey has promised a tax cut each year he's in office.

And, like Weiss, she said she has little faith the Legislature in January will address what she and others say are long-neglected education needs. It would be easy, she said, for lawmakers to argue that by voting to settle the lawsuit, they’ve done the heavy work on education.

The settlement deal was cobbled together behind closed doors with the plaintiffs in school-funding lawsuit, Ducey and his staff, and Republican legislative leaders. Rank-and-file lawmakers were briefed on the proposal hours before voting on it. The House and Senate each held one public hearing.

Several parents said they were trying to keep up with news of the proposed deal as it leaked out, but were having a difficult time understanding the details.

Susan Launder-Becker, of Payson, said she’s “not sure about all the details.” But, she added, “I’m glad they’re sitting down at the table and agreeing our schools need funding. I can only hope this is a step in the right direction and it leads to more.”

The final plan's $3.5 billion would still leave Arizona near the bottom for state public-school funding, according to the U.S. Census Bureau. An increase to $3,600 per student would still leave the state far below the 2013 nationwide average of $5,650.

"Even settling this on these terms, or even going to court and getting the full relief, isn't going to move the needle for us very much in Arizona," Hogan said. "We've got a lot of work to do over the next several years to ensure our kids get a decent education in decent schools."