Referendum sought on school debt limit

Organizer opposes law doubling districts' bonding capacity
2013-07-06T00:00:00Z Referendum sought on school debt limitHoward Fischer Capitol Media Services Arizona Daily Star
July 06, 2013 12:00 am  • 

PHOENIX - Arizona voters may get the final word on a controversial provision in the state budget that doubles the bonding capacity of school districts around the state, opening the door for higher property taxes.

Wesley Harris, founder of the Original North Phoenix Tea Party, said lawmakers are not living up to their constitutional obligation to provide adequate funds for construction of new schools and making repairs on existing ones. Rather than come up with the cash, Harris said legislators have decided to dump the obligation onto local taxpayers.

To do that, he said, they voted to allow unified school districts to borrow up to 20 percent of the total assessed value of all property within the district - double the current limit. The bonding capacity of elementary and high school districts is doubled to 10 percent.

The referendum Harris is promoting seeks to block that change.

Backers have to file 86,405 valid signatures before Sept. 12 to put the issue on the 2014 ballot. Harris said he believes there are enough people upset with what he sees as an inevitable increase in school taxes to get the necessary signatures.

Rep. Eric Meyer, D-Paradise Valley, conceded Harris is correct in his basic assessment.

"The state isn't funding its obligations," he said. But Meyer, who voted to increase bonding capacity, said there were no other options since there were not enough votes in the Legislature to provide the necessary state funds for new construction and repairs.

"We did the best we could, given the circumstances we find ourselves in," he said.

Harris, however, called it a political cop-out by legislators.

"They're saying, 'We're not going to fund it, you go somewhere else,' " Harris said, and that allows lawmakers to boast that they did not raise taxes.

But Harris said it forces local school boards to ask voters to hike taxes to pay off the new borrowing.

"The school board becomes the bad guy as far as the taxpayers are concerned," he said.

Tim Hogan, attorney for the Arizona Center for Law in the Public Interest, said the bonding capacity increase is designed to paper over the failure of the Legislature to properly fund public schools.

But Hogan said this is more than a question of politics. He contends it violates the Arizona Constitution. And he is preparing a lawsuit to ask courts to force lawmakers to meet their legal obligations.

Hogan has been down this path before.

Two decades ago, each school district was responsible for building its own schools and keeping them in repair.

But the ability of each district to raise money was based on the value of all the property located there, creating a situation where some districts could afford domed stadiums while others had crumbling plaster.

In 1994 Hogan got the Arizona Supreme Court to rule that dependence on local resources violates the constitutional requirement for the state to finance a "general and uniform" school system, that it was the responsibility of the state to provide enough money for schools that are "adequate."

Although lawmakers created a program to fund school building and maintenance, they haven't funded the renewal formula since the 2008-09 school year. And this year they voted to repeal the formula.

There is some money for repairs in the budget for the new budget year that begins July 1. But it is set up as grants - not guaranteed dollars - forcing schools to compete for limited funds.

Chuck Essigs, lobbyist for the Arizona Association of School Business Officials, said his group backs the increase.

He said it most immediately deals with the problem created when the housing bubble burst and property values plummeted.

Essigs said that left some districts with bonds that were authorized by voters, but which they could no longer sell because the declining property values also reduced the bonding capacity, which was tied to total assessed value of each district.

Sen. Rich Crandall, R-Mesa, said close to a quarter of the more than 200 school districts are in that situation.

Harris said the logic of the legislative solution escapes him.

"When the rest of us have no money and our homes have been devalued, we need to give government the ability to tax more?" he said. "If that isn't a statement of insanity, I don't know what is."

But Sam Polito, who lobbies for a number of Southern Arizona school districts, said the situation came down to a question of how to deal with problem created when lawmakers stopped funding building repairs.

Polito said his hope is that lawmakers will once again come up with the dollars for school construction, at which point each district's bonding limits could be lowered again.

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