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Schools in Arizona could lose access to more than $1 billion lawmakers gave them this school year if the state doesn’t take action to lift a 40-year-old spending limit placed on school districts.
School superintendents from districts across the state with markedly different student populations — from Bullhead City School District on Arizona’s western border, which has a student poverty rate of around 36%, to Scottsdale Unified School District, where just 7.8% of students live in poverty — banded together to ask the state to lift the limit for the 2023 fiscal year.
Around 190 superintendents signed onto a letter sent Tuesday, urging the Arizona Legislature to support Gov. Doug Ducey in calling for a special legislative session to lift the Aggregate Expenditure Limit prior to the fall’s election. The legislature is currently not scheduled to return to work until January 2023.
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The AEL, added to the Arizona Constitution by voters in 1980, implemented a shared monetary limit based on the spending and enrollment at all public school districts in the state, according to the Arizona Education Association. Once districts reach their shared limit, they can do no more spending in that fiscal year.
In the Scottsdale Unified School District, the expected shortfall if the cap isn’t lifted is expected to be more than $28 million — enough to cover more than six weeks of operational costs for the district and amounting to 20% of its annual maintenance and operational budget, SUSD Superintendent Scott Menzel told the Arizona Mirror.
The cap goes into effect April 1, with around two months left in the 2023 school year.
“The impact of that kind of reduction that late in school is pretty significant,” he said.
The legislature and the governor dedicated around $600 million in new, permanent funding to K-12 schools in the 2023 state budget, passed in June. But once districts across the state meet their shared limit, they can’t spend any of that money even if they have it in the bank. That’s why superintendents are so desperate to see it lifted.
“The sooner this is addressed, the better it will be for schools in terms of moving forward,” Menzel said.
In the letter, the superintendents stressed that the additional education funding in this year’s state budget made it possible to approve pay raises for teachers and support staff, which were necessary for districts to be competitive. In Arizona, around a quarter of the state’s teaching positions typically remain unfilled a month into the school year, according to annual surveys conducted by Arizona School Personnel Administrators Association.
On Tuesday night, the SUSD school board voted to raise the district’s minimum wage to $15 per hour, to give teachers and principals a 3% raise and to give a $2,500 raise to other administrators.
Those increases were meant to help employees deal with inflation and to attract and retain talent, but the pay raises will be at risk if the cap isn’t lifted, Menzel said.
The state constitution allows a two-thirds majority in both the state Senate and House of Representatives to override the limit for one year. Lawmakers have only voted to do so three times, in 2002, 2008 and in February of this year, according to the Arizona Education Association. The vote in February lifted the cap for the 2022 fiscal year, which came to a close at the end of June, and spared schools from having to cut roughly $1.2 billion from their spending plans in the final weeks of the school year.
If the spending limit isn’t lifted, the impact will vary by school district, Menzel said. Some small rural districts that receive a lot of aid from the state might not be able to make payroll if the cap isn’t lifted, he said.
“As some of the largest employers in our respective communities, these cuts would devastate our local economies and the families in our communities, not to mention the aggregate effect on the state economy,” the superintendents said in their letter to the legislature.
Gov. Doug Ducey did not respond to a request for comment from the Mirror asking if he planned to schedule a special session to lift the spending limit.
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