Original URL: http://www.azcentral.com/news/articles/0317edbills16.html

Education funding still fuels fight
The Arizona Republic
Mar. 17, 2004

Pat Kossan

Lawmakers try to change laws

There's good news when it comes to education funding in Arizona, thanks to voters.

In 2000, voters approved a law that will add $75 million to the state education budget this year. The 2000 ballot measure, known as Proposition 301, will add about $60 million from an automatic increase to match yearly inflation and an additional $15 million to help schools pay to add a 179th day to the school year.

But all the news from the Legislature about paying for education isn't good.

This year lawmakers have introduced a number of bills to cap the amount of money schools can raise through property taxes, said Chuck Essigs, lobbyist for the Association of Arizona School Business Officials.

"That seems to be the mood of the times," Essigs said. "If you don't know what to do with a problem, you freeze it."

Michael Hunter, a policy analyst for the business-funded Arizona Tax Research Association, said taxpayers in school districts where property values are high, such as the Paradise Valley district, don't feel the pinch of property taxes. Small tax rates can generate plenty of money.

But school districts in areas where property values are low, such as parts of south Phoenix and some rural areas, must levy high property tax rates on people and businesses that can least afford them. Despite these tax rates, the schools can't raise as much money as wealthier districts.

Hunter said it creates a unique political struggle because all of Arizona's schools are forced to rely on property taxes to survive.

That dependence creates inequities in school funding, Hunter said, which means wide differences in such things as teacher pay and benefits. That struggle spills over into the Legislature, where lawmakers still appear unwilling to fund all schools equally from one pot of money.

As a result, some bills originally created to boost school funds now have amendments that do the opposite:

A bill originally meant to help all schools get more money for transporting their students, now has an amendment that would mean less transportation money for 150 of the state's 227 school districts.

Another bill was originally aimed at helping school districts that won voter approval to sell bonds to help build new schools but lost override elections that generate property tax money to furnish and equip those schools. The bill would allow districts to use 10 percent of their bond money to equip the new schools. But a recent amendment would severely limit the amount any district would be allowed to raise through an override election.

Arizona has a law that allows school districts to levy property taxes without voter approval to help pay for utility costs, such as cooling, heating, telephones and Internet connections. Some lawmakers want to cap how much money schools can raise from "excess utilities" taxes.

Sometimes, the courts or the federal government have stepped in to force Arizona to spend more money on schools. For example, federal courts or agencies have granted 19 Arizona school districts the power to levy property taxes to aid in their efforts to desegregate schools or meet the needs of minority students through special programs. This fiscal year, another bill attempts to cap the amount a school can make from these "desegregation taxes."

In 1994, the Arizona Supreme Court required the state to set up a fund to build new schools and repair old ones. Lawmakers created an acceptable plan in 1998, but during the economic downturn the Legislature stopped paying into part of the fund designed to maintain schools.

This year, if the maintenance pot had been left untouched, schools would split $130 million for maintenance costs. A new bill would restore some of the money, but only about 60 percent, or $70 million.

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