Arizona Excels at School Choice; Fails in School Investment
Arizona enters the new decade as the national leader in school choice. Arizona parents can choose to open-enroll their children in the public school that best meets their needs, choose among almost 500 charter schools or even receive a tax credit funded scholarship to offset some of the cost of private school. Arizona parents have more choice than parents in any other state.
Unfortunately, while Arizona legislators have given parents more control over their children’s education, they have failed to keep up with other states’ investment in education. Arizona ranks at the bottom in per pupil spending for public education and 90% of Arizona parents have chosen traditional public education and charter public schools.
Why is investment in traditional and charter public schools important? In order to have a strong economy Arizona needs an educated work force to attract industry to the state. If business cannot find workers qualified for the positions available they will not come to Arizona. Moreover, if educated workers are not available businesses will leave Arizona. Arizona citizens want smart government that will enact policies that will help create broad prosperity throughout the state and education is the cornerstone to building a stronger Arizona economy. Investing in public education is investing in the economic future of Arizona.
As the legislature convenes for the new session, Arizona faces serious financial issues. Arizonans should be watching for action in the legislature that reflects Arizona values and priorities. New tax-credit proposals that diminish the general fund in a time of record deficits should be labeled fiscally irresponsible. Investment in public education should be employed to fire-up the economic engine of Arizona and help grow us out of our fiscal Grand Canyon. Investment in public education has been the greatest economic driver in the history of the United States. Now is the time for Arizona to re-invest in public education!
MaryLee Moulton
Board Member, Arizona Education Network
e-mail MaryLee Moulton at marylee@arizonaeducationnetrwork.com
Monday, January 11, 2010
Saturday, January 9, 2010
Rep. Steve Farley & Sen. Al Melvin Discuss Arizona Budget Crisis
Yesterday, Representative Steve Farley (LD 28) and Senator Al Melvin (LD 26) sat down with Bill Buckmaster for the Friday Roundtable to discuss the state's budget crisis. Click here to view video.
*It's worth noting that Senator Melvin once again references a per pupil expenditure AEN debunked in a previous post on our website and here on the blog.
*It's worth noting that Senator Melvin once again references a per pupil expenditure AEN debunked in a previous post on our website and here on the blog.
Tuesday, January 5, 2010
Debunking Latest Education Spending Report, January 5, 2010
In another effort to undermine the value of public education, the libertarian/limited-government-through-litigation group The Goldwater Institute sent out another email with misleading, outdated and disingenuous information. Their "pitch" is that Arizona is spending more for education, and getting less for it.
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However, this dog won't hunt. This is an old message that has been debunked repeatedly. In 1979 Arizona was investing about 69% of the total general fund budget on K-12 schools, community colleges and universities. Today about 57% of our state budget is devoted to our schools. We are essentially paying LESS, and demanding MORE.
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While Arizona’s overall spending on education has increased during that same time period, it has not kept up with the growth in our population. The American Legislative Exchange Council (ALEC) reported recently that Arizona actually spent more per K-12 student in 1986 than we did in 2006. This bears repeating: Arizona actually spent $61 less per student than we did 20 years prior…and those latest figures were released before the most recent spending cuts. The ALEC report also concurs with all of the other national education surveys that Arizona is ranked at the very bottom for educational investment among US states.
.
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"How much is Arizona spending per student?"
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The fact is that national surveys report that Arizona spends anywhere between $5,255 - $7,537 per student. However, special interest groups are claiming that we spend anywhere from $9,500 to “over $10,000” per student. Notably ATRA, the fiscally conservative Arizona Tax Research Association, agrees that Arizona funding is $6,200* per student.
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.....* ATRA Special Report, April 2009 “K-12 Education Funding – How Do We Compare”
...
As a general rule, other states identify three expenditures for per student spending:
• Teacher Salary
• Maintenance and Operations (M&O) costs to run the school
• Costs for the items directly used by the students in the classroom
The per pupil funding dollar is derived by adding total dollars spent of the above three items and dividing by the actual number of students served.
.
"Reactionary groups claim Arizona is spending $9,700 per student. How did they calculate that number?"
.
In short, it's a numbers game.
.
They use all the income on the JLBC Report (1/27/09), including lunch money, after school sports, adult night programs, adjacent ways (sewer & road repairs as a result of city maintenance), and other non-revenue dollars and divide it by the number of students.
.
No other state counts this in their per student funding numbers. Reactionary groups use these numbers and include these things because they want to inflate this data in a period where Arizona is cutting education spending. They are using the hard work of the JLBC to spin their message.
.
In taking a closer look at the 2000-2009 JLBC report, it is important to note that the 2009 figures are an estimate. They do not include the cuts of $270M to K-12 Education or the elimination of $362M in New School Facilities (NSF) funding made during 2009.
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These are the FACTS that you need to know:
• Arizona spends less per student than almost any other state in the nation
• National Education Association: 51st
• U.S. Census Bureau: 49th
• National Center for Education Statistics: 48th
• Education Week: 50th
• American Legislative exchange Council: 50th
• Average reported difference between what Arizona spends per student and what the average US state invests = $3,068 per student
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"Are these statistics acceptable for a 21st century classroom?"
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Absolutely not.
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For a full report on the above statistics, see Arizona K-12 EXAMINATION OF THE FACTS 2009, pdf.
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References
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US Population Statistics: U.S. Census Bureau, Cumulative Estimates of Population Change for the United States, Regions, States, and Puerto Rico and Region and State Rankings: April 1, 2000 to July 1, 2008 http://www.census.gov/popest/states/NST-pop-chg.html,
State General Fund Expenditures: The Fiscal Survey of States, National Governor’s Association, June 2009, http://www.nasbo.org/Publications/PDFs/FSSpring2009.pdf
Projected State Budget Deficits: Recession Continues to Batter State Budgets; State Responses Could Slow Recovery, Center on Budget Policy & Priorities, Table I, http://www.cbpp.org/cms/?fa=view&id=711
Education Expenditures and State Rankings: American Legislative Council, The Report Card on American Education: A State-by-State Analysis, 2008 http://www.alec.org/am/pdf/ReportCard08.pdf
GDP by State: Bureau of Economic Analysis, Economic Slowdown Widespread Among States in 2008, Table 1 Real GDP by State 2005-2008, http://www.bea.gov/newsreleases/regional/gdp_state/gsp_newsrelease.htmysi
General Fund Spending as a Percent of Personal Income, Joint Legislative Budget Committee, 2009, http://www.azleg.gov/jlbc/gf%25azpi%2010-08.pdf
Arizona corporate and individual tax statistics: Joint Legislative Budget Committee, 2008 http://www.azleg.gov/jlbc/08taxbook/08taxbk.pdf
.
However, this dog won't hunt. This is an old message that has been debunked repeatedly. In 1979 Arizona was investing about 69% of the total general fund budget on K-12 schools, community colleges and universities. Today about 57% of our state budget is devoted to our schools. We are essentially paying LESS, and demanding MORE.
.
While Arizona’s overall spending on education has increased during that same time period, it has not kept up with the growth in our population. The American Legislative Exchange Council (ALEC) reported recently that Arizona actually spent more per K-12 student in 1986 than we did in 2006. This bears repeating: Arizona actually spent $61 less per student than we did 20 years prior…and those latest figures were released before the most recent spending cuts. The ALEC report also concurs with all of the other national education surveys that Arizona is ranked at the very bottom for educational investment among US states.
.
.
"How much is Arizona spending per student?"
.
The fact is that national surveys report that Arizona spends anywhere between $5,255 - $7,537 per student. However, special interest groups are claiming that we spend anywhere from $9,500 to “over $10,000” per student. Notably ATRA, the fiscally conservative Arizona Tax Research Association, agrees that Arizona funding is $6,200* per student.
.
.....* ATRA Special Report, April 2009 “K-12 Education Funding – How Do We Compare”
...
As a general rule, other states identify three expenditures for per student spending:
• Teacher Salary
• Maintenance and Operations (M&O) costs to run the school
• Costs for the items directly used by the students in the classroom
The per pupil funding dollar is derived by adding total dollars spent of the above three items and dividing by the actual number of students served.
.
"Reactionary groups claim Arizona is spending $9,700 per student. How did they calculate that number?"
.
In short, it's a numbers game.
.
They use all the income on the JLBC Report (1/27/09), including lunch money, after school sports, adult night programs, adjacent ways (sewer & road repairs as a result of city maintenance), and other non-revenue dollars and divide it by the number of students.
.
No other state counts this in their per student funding numbers. Reactionary groups use these numbers and include these things because they want to inflate this data in a period where Arizona is cutting education spending. They are using the hard work of the JLBC to spin their message.
.
In taking a closer look at the 2000-2009 JLBC report, it is important to note that the 2009 figures are an estimate. They do not include the cuts of $270M to K-12 Education or the elimination of $362M in New School Facilities (NSF) funding made during 2009.
.
These are the FACTS that you need to know:
• Arizona spends less per student than almost any other state in the nation
• National Education Association: 51st
• U.S. Census Bureau: 49th
• National Center for Education Statistics: 48th
• Education Week: 50th
• American Legislative exchange Council: 50th
• Average reported difference between what Arizona spends per student and what the average US state invests = $3,068 per student
.
"Are these statistics acceptable for a 21st century classroom?"
.
Absolutely not.
.
For a full report on the above statistics, see Arizona K-12 EXAMINATION OF THE FACTS 2009, pdf.
.
References
.
US Population Statistics: U.S. Census Bureau, Cumulative Estimates of Population Change for the United States, Regions, States, and Puerto Rico and Region and State Rankings: April 1, 2000 to July 1, 2008 http://www.census.gov/popest/states/NST-pop-chg.html,
State General Fund Expenditures: The Fiscal Survey of States, National Governor’s Association, June 2009, http://www.nasbo.org/Publications/PDFs/FSSpring2009.pdf
Projected State Budget Deficits: Recession Continues to Batter State Budgets; State Responses Could Slow Recovery, Center on Budget Policy & Priorities, Table I, http://www.cbpp.org/cms/?fa=view&id=711
Education Expenditures and State Rankings: American Legislative Council, The Report Card on American Education: A State-by-State Analysis, 2008 http://www.alec.org/am/pdf/ReportCard08.pdf
GDP by State: Bureau of Economic Analysis, Economic Slowdown Widespread Among States in 2008, Table 1 Real GDP by State 2005-2008, http://www.bea.gov/newsreleases/regional/gdp_state/gsp_newsrelease.htmysi
General Fund Spending as a Percent of Personal Income, Joint Legislative Budget Committee, 2009, http://www.azleg.gov/jlbc/gf%25azpi%2010-08.pdf
Arizona corporate and individual tax statistics: Joint Legislative Budget Committee, 2008 http://www.azleg.gov/jlbc/08taxbook/08taxbk.pdf
Monday, January 4, 2010
With fiscal house on fire, private-school tax credits are irresponsible
With fiscal house on fire, private-school tax credits are irresponsible
By MaryLee Moulton
As Rome burns, our state Legislature continues to fiddle away. Faced with a burgeoning budget hole and no solution in sight, the legislative leadership last week proposed a way to deepen — yes, deepen — our state debt.
By MaryLee Moulton
As Rome burns, our state Legislature continues to fiddle away. Faced with a burgeoning budget hole and no solution in sight, the legislative leadership last week proposed a way to deepen — yes, deepen — our state debt.
It involves funneling even more state tax dollars to private schools and helping line the pockets of the middlemen who profit handily by skimming 10 percent of tax-credit dollars as they are diverted to private schools.
A House committee appointed by House Speaker Kirk Adams, R-Mesa, allegedly to investigate abuses of the private school tax-credit system, instead last week released recommendations to expand rather than reform the program, which two separate newspaper investigations have found to be rife with abuse.
The newspapers found that the program, which was established to help pay poor kids' tuition at private and parochial schools, primarily benefits the wealthy, who receive a taxpayer-funded subsidy to pay for their children's elite and costly education. This comes at the expense of all other Arizonans, who are suffering job losses, closed state parks and woefully underfunded public and charter schools because of the state's budget crisis.
The private-school tax credit program has diverted $380 million from the general fund since its inception in 1997. This year alone — at a time when the state is talking about talking about issuing IOUs because it can't pay its bills — $55 million of your tax dollars will walk out the door with no benefit to average Arizonans.
Your state tax dollars will also continue enriching Rep. Steve Yarbrough, R-Mesa, the primary sponsor of legislation expanding private-school tax credits and the beneficiary of those tax dollars as head of the largest School Tuition Organization. Legislators have already refused to declare that Yarbrough has a blatant conflict of interest that should be illegal; instead of cracking down on his industry, the House panel voted to help him expand it.
Incredibly, rather than voting to restrict this program to only the financially needy, the House panel voted to recommend increasing the amount that taxpayers can direct to private schools from $500 to $750 for an individual and $1,000 to $1,500 for a couple.
How can any responsible legislator faced with a budget deficit of more than $3 billion recommend increasing a tax credit that is not limited by financial need? In the recent special session, the Legislature cut an additional $144 million to public schools mid-year. This is on top of the $133 million in cuts in January 2009. More cuts are on the way. Keep in mind that Arizona is already 50th in the nation in per-pupil spending on K-12 education.
Every Arizonan should contact their state legislator and demand they follow the fiscally responsible path. Insist that any scholarship offered through tax credits is means tested. Tell them to introduce legislation to reduce the 10 percent taken off the top to a more reasonable 3 to 5 percent. Finally, tell them they will be held accountable if they expand special interest tax breaks when Arizona has a $3 billion deficit.
Arizonans must take action to force our legislators to be fiscally responsible.
MaryLee Moulton is a co-founder of the Arizona Education Network. E-mail MaryLee Moulton at marylee@arizonaeducationnetwork.com
Wednesday, December 9, 2009
Legislators Take 2nd Trip to DC for Special Interest Group!!! Still no budget!
Mary Jo Pitzl, lead legislative reporter for The Arizona Republic, reports on another trip that 14 legislators are embarking on this week instead of calling a special session to address our state's $3B deficit. This is the second trip lawmakers attended this year for the ALEC conference. The last one was in Atlanta.
AZ lawmakers off to D.C.
by Mary Jo Pitzl: December 3, 2009
Fourteen Arizona lawmakers are in Washington D.C. this week for the winter meeting of the American Legislative Exchange Council.They're hearing presentations on such topics as "Ensuring Success Outside the Ivory Tower," the upcoming redistricting process after the 2010 census, and a special presentation on "Obamacare." They're also hearing address from Rep. John Boehner, the House Minority Leader and Rep. Eric Cantor, R-Virginia.
ALEC attracts mainly Republican lawmakers and serves as a laboratory for legislation that participants often take back to their home states.
Following is a list of the Arizona lawmakers, all Republicans, who are attending. They're not traveling on the taxpayer dime; their fees and fares are being paid for by scholarships sponsored by various industry contributors. That's the same method that will be used by a mixed bag of Democrats and Republicans who are lining up for the next legislative confab, the National Conference of State Legislatures, which is convening in San Diego. Stay tuned for that list.
No wonder there's no talk of another legislative special session until mid-December.
ALEC attendees this week:
Senate President Bob Burns-Peoria
Sen. Sylvia Allen-Snowflake
Sen. Pamela Gorman-Anthem
Sen. Russell Pearce-Mesa
Sen. Thayer Verschoor-Gilbert
Rep. Sam Crump-Anthem
Rep. Adam Driggs-Phoenix
Rep Doris Goodale-Kingman
Rep. Laurin Hendrix-Gilbert
Rep. Debbie Lesko-Glendale
House Majority Leader John McComish-Phoenix
Rep. Nancy McLain-Bullhead City
Rep. Jerry Weiers-Glendale
Rep. David Gowan -Tucson
We encourage ALL voters to contact the above legislators and ask them to focus on our state's budget woes. For contact information, visit AEN's "Legislature & Governor" tab by clicking here.
Tuesday, December 1, 2009
Legislative Update: Where are we going, and why are we in this handbasket? 12/1/09
This update covers a quick overview of Arizona’s financial situation, the recently enacted budget cuts and a glimpse of what is lurking in the legislature..
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State Financial Update – Where we Stand Today
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From the latest Joint Legislative Budget Committee (JLBC) reports:
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The Budget Cuts Last Week - $144 Million from K-12 Education
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The legislature held a special session last week to enact a series of cuts that closely resemble the reductions that Governor Brewer vetoed earlier this year. Brewer acknowledged that the cuts to education were pretty much equivalent to the cuts that she called “unacceptable” a few months ago, but now says that “We have no other alternative other than to go in and make some adjustments, some cuts, and to continue working forward in an effort to see how we are going to solve a possibly $4 billion deficit.”
.
The latest “adjustment” to K-12 education translated into a $144 million dollar cut to this current fiscal year’s soft capital funds (books, classroom materials, buses, other student supplies, etc.) The legislation exempted school districts with fewer than 600 students, so charter schools were not impacted by the recent reductions.
.
I thought that the legislature was originally trying to cut $175 million in soft capital? Why did they choose to cut $144 million instead?
.
Ah –ha! Great question!
.
In order to receive federal stimulus money, all US states had to agree not to cut education spending below their 2006 state expenditure of education, otherwise known as the Maintenance-of-Effort (MOE) requirement. This latest cut of $144 million sets us back to the 2006 number for this fiscal year.
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If our legislature decides to cut anything else from the overall education budget this year, Arizona would be in danger of losing the $1 billion + in State Fiscal Stabilization Fund money that we are scheduled to receive between 2009-2011.
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Governor Brewer is reportedly going to ask for an exemption to the federal guidelines so our legislature can continue to cut below 2006 funding levels. More on that in the ‘What’s Next’ section below.
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Was there any attempt at all to address our declining state revenue, tax loopholes or any other fiscal measures?
.
No. Despite some speculation that Governor Brewer’s proposed 1-cent sales tax increase might gain some airtime in the legislature, there has been little public discussion of the measure and no serious move within the legislature to review any revenue measure, including any of the alternative plans already put forward by the minority party and outside groups.
.
How will this impact our schools? While the $144 million reduction represents yet another financial blow directly to the classrooms, school districts had been told right from the beginning of the year that this cut was highly probable. All of the school officials we have spoken to had made ‘worst case scenario’ contingency plans for soft capital cuts this year and had not allocated all of the initial budget funds they had been assigned at the beginning of the year.
.
That said, this additional round of reduced payments will certainly impact our classrooms. As more dollars are allocated to the most basic mandated services, many schools are already reporting that they expect to run out of their already-rationed classroom material (paper, etc.) before the end of the year.
.
What’s Next?
.
Legislators are already discussing a second special session for December, and we anticipate that leadership will meet again before the holidays.
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Now that the education budget is cut down to the 2006 Maintenance of Effort threshold and state agencies are shutting down offices and facilities, do you think that revenue discussions might be on the table? It’s doubtful.
.
Senator John Nelson recently remarked pointedly that too many of his fellow legislators are still devotedly beholden to Washington DC Lobbyist Grover Norquist and the anti-tax pledge they signed earlier in the year. When asked by the Capitol Times if there was any hope for a serious examination of our revenue situation, Sen. Nelson, who did not sign the pledge himself, told the Az Capitol Times that “Grover (Norquist,) is not going to allow that to happen. Everyone who signed that no-tax pledge is going to be told (to vote) no.”
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So…while you reflect on the fact that a special interest lobbyist and non-Arizona resident is instructing our elected officials how to vote, here’s the skinny on the latest legislative leadership proposals for bridging our budget deficit:
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Plan One: Let the Lottery Ticket Buyers of 2020 Bail Us Out.
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The latest scheme would involve borrowing…though we can’t call it that, because the Arizona Constitution strictly prohibits long-term borrowing. To get around these silly semantic details, the latest buzzword de jour is “securitization”.
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Though the plan is somewhat convoluted, legislators think that they can skirt the Constitution by pledging future funds off a single source--in this case it would be the Arizona Lottery--and therefore ‘secure’ the future funds for this year’s budget rather than ‘borrow’ them.
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State lottery director Jeff Hatch-Miller reports that the lottery contributed $43.2 million to the state treasury last year. Legislators are looking to borrow against (er, “secure”) anywhere from 20-30 years worth of future lottery revenue….though this plan is further hampered by the fact that Arizona voters only authorized the state lottery through 2012. It’s quite a feat to dodge both the Constitution and to borrow now from a program that still doesn’t legally exist 3 years from now, but that’s the proposed plan.
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Plan Two: State Fundraiser!
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Legislator Judy Burges has gathered 33 majority party legislators to sponsor a voluntary donation option on the upcoming Arizona State Tax return forms. The hope is that each Arizona household would forgo some of their tax return money to help bridge the state budget deficit.
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Is this a viable idea? Capitol News Service reports that Arizonans donated $7.6 million to various causes (Clean Elections, veteran’s health, etc.) via their tax returns this last fiscal year. That said, even if the legislature collects a similar sum under this scheme, it would only amount to roughly .25% of our $3 billion dollar projected deficit. In other words…it’s a bit like running a lemonade stand this weekend in the hopes of covering your yearly mortgage.
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Plan Three: Cuts, Cuts, Cuts!
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Prime target this time? You guessed it – Education!
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House Majority Whip Andy Tobin and Senator Russell Pearce, head of the Appropriations Committee, have already stated that the federal stimulus education maintenance-of-effort (MOE) waiver should itself be waived. Senator Pearce has stated that he “wants all those political handcuffs removed” so that the Senate can extend further cuts to education. Rep. John Kavanagh, the Appropriations Chair in the House, also agrees with this assessment: “These cuts we’re making today barely make a dent in the problem…this is cosmetic.”
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If those words aren’t enough to give us all pause, Senator Pearce has gone further to suggest that the legislature should perhaps cut deeper into education in spite of the potential loss of federal stimulus dollars. When asked what the legislature should do if the federal Department of Education refuses to waive the MOE requirement, Pearce opined: “Let’s cross that bridge when we get there. It’s worth asking, and it’s worth maybe ignoring.”
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What to do?
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At the risk of sounding like a broken record, we encourage you to continue contacting your legislators to insist that they seek a balanced, measured plan. Right now we aren’t finding evidence of a plan at all…just random cuts without much foresight into the future of our state.
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We also encourage you to write to local papers and TV stations. Whether you chose to write an editorial or just a simple email to a reporter, it is important to let them know that we want relevant and factual information about our state budget and that we hold education in the highest priority.
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Find Out More:
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Bill: Won’t you donate to ailing state? Arizona Daily Star, November 30, 2009
Governor, lawmakers slash $300 million from budget, YourWestValley.com, November 24, 2009
Borrowing plan using lottery weighed, Arizona Daily Star, November 23, 2009
State lawmakers to hold another special session, Yuma Sun, November 20, 2009
Lawmakers consider seeking exemption from stimulus requirements, Arizona Capitol Times, November 20, 2009
Trimming Around the Edges / Lawmakers attempt to cut state spending – but Arizona remains on the edge of a financial disaster, Jim Nintzel, Tucson Weekly, November 19, 2009
Budget agreement fails; Senate will try again Monday, Arizona Republic, November 20, 2009
GOP deal to OK $450M in budget cuts falls apart, AZ Daily Star, November 20, 2009
State borrows $700M; first external loan since Great Depression, AZ Capitol Times, November 19, 2009
Loan to Pay Arizona’s Bills (Video) State Treasurer Dean Martin discusses the $700 million load the State of Arizona is seeking to meet its financial obligations, November 19, 2009
Voters still locked out of budget process, Douglas Dispatch, November 11, 2009
Billion-dollar deficits to plague Arizona through 2013, Arizona Capitol Times, September 8, 2009
Beyond California: States to Watch, (Arizona Report), Pew Center on the States, October 2009
Finance Advisory Committee, Revenue & Budget Update, Arizona Joint Legislative Budget Committee (JLBC), October 22, 2009
JLBC – Monthly Fiscal Highlights, October 2009
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State Financial Update – Where we Stand Today
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From the latest Joint Legislative Budget Committee (JLBC) reports:
- Projected Arizona state budget deficit for FY2010 = $2 Billion* +
- Projected deficit for 2011 = $3.3 Billion
- Arizona’s Operating Fund (the fund from which we pay our state bills) is negative for the first time since the 1930’s.
- Arizona borrowed $700 million from Bank of America in November. This loan was necessary to cover the Dec 1st funding for K-12 schools and to maintain cash reserves for ongoing expenses. Treasurer Dean Martin estimates that interest payments for this loan will equal about $3.1 million.
- The JLBC and three other economic forecasting groups hope for 6-7% growth in 2011, but even with this projected growth our state sales tax and individual income tax collections would not reach FY06 levels until at least FY2013. Corporate tax collections in FY13 are still projected to be lower than FY05 numbers.
.
The Budget Cuts Last Week - $144 Million from K-12 Education
.
The legislature held a special session last week to enact a series of cuts that closely resemble the reductions that Governor Brewer vetoed earlier this year. Brewer acknowledged that the cuts to education were pretty much equivalent to the cuts that she called “unacceptable” a few months ago, but now says that “We have no other alternative other than to go in and make some adjustments, some cuts, and to continue working forward in an effort to see how we are going to solve a possibly $4 billion deficit.”
.
The latest “adjustment” to K-12 education translated into a $144 million dollar cut to this current fiscal year’s soft capital funds (books, classroom materials, buses, other student supplies, etc.) The legislation exempted school districts with fewer than 600 students, so charter schools were not impacted by the recent reductions.
.
I thought that the legislature was originally trying to cut $175 million in soft capital? Why did they choose to cut $144 million instead?
.
Ah –ha! Great question!
.
In order to receive federal stimulus money, all US states had to agree not to cut education spending below their 2006 state expenditure of education, otherwise known as the Maintenance-of-Effort (MOE) requirement. This latest cut of $144 million sets us back to the 2006 number for this fiscal year.
.
If our legislature decides to cut anything else from the overall education budget this year, Arizona would be in danger of losing the $1 billion + in State Fiscal Stabilization Fund money that we are scheduled to receive between 2009-2011.
.
Governor Brewer is reportedly going to ask for an exemption to the federal guidelines so our legislature can continue to cut below 2006 funding levels. More on that in the ‘What’s Next’ section below.
.
Was there any attempt at all to address our declining state revenue, tax loopholes or any other fiscal measures?
.
No. Despite some speculation that Governor Brewer’s proposed 1-cent sales tax increase might gain some airtime in the legislature, there has been little public discussion of the measure and no serious move within the legislature to review any revenue measure, including any of the alternative plans already put forward by the minority party and outside groups.
.
How will this impact our schools? While the $144 million reduction represents yet another financial blow directly to the classrooms, school districts had been told right from the beginning of the year that this cut was highly probable. All of the school officials we have spoken to had made ‘worst case scenario’ contingency plans for soft capital cuts this year and had not allocated all of the initial budget funds they had been assigned at the beginning of the year.
.
That said, this additional round of reduced payments will certainly impact our classrooms. As more dollars are allocated to the most basic mandated services, many schools are already reporting that they expect to run out of their already-rationed classroom material (paper, etc.) before the end of the year.
.
What’s Next?
.
Legislators are already discussing a second special session for December, and we anticipate that leadership will meet again before the holidays.
.
Now that the education budget is cut down to the 2006 Maintenance of Effort threshold and state agencies are shutting down offices and facilities, do you think that revenue discussions might be on the table? It’s doubtful.
.
Senator John Nelson recently remarked pointedly that too many of his fellow legislators are still devotedly beholden to Washington DC Lobbyist Grover Norquist and the anti-tax pledge they signed earlier in the year. When asked by the Capitol Times if there was any hope for a serious examination of our revenue situation, Sen. Nelson, who did not sign the pledge himself, told the Az Capitol Times that “Grover (Norquist,) is not going to allow that to happen. Everyone who signed that no-tax pledge is going to be told (to vote) no.”
.
So…while you reflect on the fact that a special interest lobbyist and non-Arizona resident is instructing our elected officials how to vote, here’s the skinny on the latest legislative leadership proposals for bridging our budget deficit:
.
Plan One: Let the Lottery Ticket Buyers of 2020 Bail Us Out.
.
The latest scheme would involve borrowing…though we can’t call it that, because the Arizona Constitution strictly prohibits long-term borrowing. To get around these silly semantic details, the latest buzzword de jour is “securitization”.
.
Though the plan is somewhat convoluted, legislators think that they can skirt the Constitution by pledging future funds off a single source--in this case it would be the Arizona Lottery--and therefore ‘secure’ the future funds for this year’s budget rather than ‘borrow’ them.
.
State lottery director Jeff Hatch-Miller reports that the lottery contributed $43.2 million to the state treasury last year. Legislators are looking to borrow against (er, “secure”) anywhere from 20-30 years worth of future lottery revenue….though this plan is further hampered by the fact that Arizona voters only authorized the state lottery through 2012. It’s quite a feat to dodge both the Constitution and to borrow now from a program that still doesn’t legally exist 3 years from now, but that’s the proposed plan.
.
Plan Two: State Fundraiser!
.
Legislator Judy Burges has gathered 33 majority party legislators to sponsor a voluntary donation option on the upcoming Arizona State Tax return forms. The hope is that each Arizona household would forgo some of their tax return money to help bridge the state budget deficit.
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Is this a viable idea? Capitol News Service reports that Arizonans donated $7.6 million to various causes (Clean Elections, veteran’s health, etc.) via their tax returns this last fiscal year. That said, even if the legislature collects a similar sum under this scheme, it would only amount to roughly .25% of our $3 billion dollar projected deficit. In other words…it’s a bit like running a lemonade stand this weekend in the hopes of covering your yearly mortgage.
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Plan Three: Cuts, Cuts, Cuts!
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Prime target this time? You guessed it – Education!
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House Majority Whip Andy Tobin and Senator Russell Pearce, head of the Appropriations Committee, have already stated that the federal stimulus education maintenance-of-effort (MOE) waiver should itself be waived. Senator Pearce has stated that he “wants all those political handcuffs removed” so that the Senate can extend further cuts to education. Rep. John Kavanagh, the Appropriations Chair in the House, also agrees with this assessment: “These cuts we’re making today barely make a dent in the problem…this is cosmetic.”
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If those words aren’t enough to give us all pause, Senator Pearce has gone further to suggest that the legislature should perhaps cut deeper into education in spite of the potential loss of federal stimulus dollars. When asked what the legislature should do if the federal Department of Education refuses to waive the MOE requirement, Pearce opined: “Let’s cross that bridge when we get there. It’s worth asking, and it’s worth maybe ignoring.”
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What to do?
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At the risk of sounding like a broken record, we encourage you to continue contacting your legislators to insist that they seek a balanced, measured plan. Right now we aren’t finding evidence of a plan at all…just random cuts without much foresight into the future of our state.
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We also encourage you to write to local papers and TV stations. Whether you chose to write an editorial or just a simple email to a reporter, it is important to let them know that we want relevant and factual information about our state budget and that we hold education in the highest priority.
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Find Out More:
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Bill: Won’t you donate to ailing state? Arizona Daily Star, November 30, 2009
Governor, lawmakers slash $300 million from budget, YourWestValley.com, November 24, 2009
Borrowing plan using lottery weighed, Arizona Daily Star, November 23, 2009
State lawmakers to hold another special session, Yuma Sun, November 20, 2009
Lawmakers consider seeking exemption from stimulus requirements, Arizona Capitol Times, November 20, 2009
Trimming Around the Edges / Lawmakers attempt to cut state spending – but Arizona remains on the edge of a financial disaster, Jim Nintzel, Tucson Weekly, November 19, 2009
Budget agreement fails; Senate will try again Monday, Arizona Republic, November 20, 2009
GOP deal to OK $450M in budget cuts falls apart, AZ Daily Star, November 20, 2009
State borrows $700M; first external loan since Great Depression, AZ Capitol Times, November 19, 2009
Loan to Pay Arizona’s Bills (Video) State Treasurer Dean Martin discusses the $700 million load the State of Arizona is seeking to meet its financial obligations, November 19, 2009
Voters still locked out of budget process, Douglas Dispatch, November 11, 2009
Billion-dollar deficits to plague Arizona through 2013, Arizona Capitol Times, September 8, 2009
Beyond California: States to Watch, (Arizona Report), Pew Center on the States, October 2009
Finance Advisory Committee, Revenue & Budget Update, Arizona Joint Legislative Budget Committee (JLBC), October 22, 2009
JLBC – Monthly Fiscal Highlights, October 2009
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Wednesday, November 25, 2009
Happy Thanksgiving!!!
These are challenging times for our state. And when we're careless with our perspective, our everyday lives are affected, and our ability to find joy in the simple things is compromised. But as we all take a few steps back to gather with loved ones this holiday season, it is important to bank away a reserve; a bit of thanksgiving to carry with us throughout the year for those things big and small.
Schools are still open. Minds are still encouraged to learn. Each day promises of yet another child learning to read. And classrooms are full of students dreaming of ways they'll change the world. Another generation awakens a dream of being a teacher some day. Books enlighten curious minds to lands just beyond our grasp. Imaginations climb. Computers connect to Internet portals, uniting our front doors; bring cultures together, promising peace. The world is a classroom with limitless capacity. And we are all welcome to dwell within it. Young and old.
These things hold true long after the Thanksgiving holiday has come to pass. And these are the tokens we must tuck away for those days where advocacy is met by prolonged droughts of inspiration and progress. Be thankful this holiday and every day forward. Because for as long as there is a mind eager to learn, there is still so much to be hopeful for.
Happy Thanksgiving.
~Your AEN Team
Schools are still open. Minds are still encouraged to learn. Each day promises of yet another child learning to read. And classrooms are full of students dreaming of ways they'll change the world. Another generation awakens a dream of being a teacher some day. Books enlighten curious minds to lands just beyond our grasp. Imaginations climb. Computers connect to Internet portals, uniting our front doors; bring cultures together, promising peace. The world is a classroom with limitless capacity. And we are all welcome to dwell within it. Young and old.
These things hold true long after the Thanksgiving holiday has come to pass. And these are the tokens we must tuck away for those days where advocacy is met by prolonged droughts of inspiration and progress. Be thankful this holiday and every day forward. Because for as long as there is a mind eager to learn, there is still so much to be hopeful for.
Happy Thanksgiving.
~Your AEN Team
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