Like many school districts in Arizona the three public school districts that serve Gilbert are in an improved situation this school year; however, work remains to be done to restore their financial health, district officials said.
State officials last spring committed to a three-year teacher salary increase program; an extension of Proposition 301 taxation, which is a 0.6-percent sales-tax increase dedicated to funding education; and the restoration of some District Additional Assistance, or DAA, funds, which are used for district capital costs—physical items like buildings and buses.
The biggest wishlist item for the 2019 legislative session is to continue restoring DAA funds, officials from Gilbert Public Schools, Chandler USD and Higley USD said.
Despite the restoration of some DAA funds earlier this year, those funds are about a third of what the state’s funding formula says the districts should receive, according to the state’s funding reports for each district.
“You have a group of people, educators, who are fighting, who are believing they’re really doing what they feel is best for their profession,” Gilbert Public Schools Superintendent Shane McCord said. “And then you have another group of legislators who were making those decisions for education. They’re going to have to listen (to each other).”
With DAA funds still lagging, officials from all three districts said they may be forced to put bond elections and overrides before voters.
Funding restoration impact
The lack of school funding dates to the Great Recession in 2007-09, which caused a crash in state revenues and home values. School districts suffered on two fronts – from a decrease in state funding and a decrease in property tax collection.
By fiscal year 2015-16, DAA was being funded at fewer than 15 percent of what the state’s formula showed the state owed to districts, according to data from the Arizona Association of School Business Officials.
“Trying to run a school district on 15 percent of the required capital costs from the state is very difficult,” HUSD Superintendent Mike Thomason said. “Things that fall through the cracks are things that are very visual: carpet, paint, new furniture for our students, curriculum.”
Even in a district such as GPS, where building new schools is largely over, lack of capital funding made dealing with routine maintenance problematic and caused districts to pull from the maintenance and operations fund, McCord said.
However, the additional DAA money coming in for fiscal year 2018-19 means districts do not have to pull from the M&O fund at the same rate as in past years. Keeping more M&O money intact had a domino effect that allowed for pay raises not just to teachers, but all staff at the three districts, officials said.
Future funding mechanisms
Despite state funding additions district officials say bonds for capital needs and overrides, which allow districts to increase the M&O budget by up to 15 percent, remain an option. Bonds and overrides require voter approval.
HUSD last passed a bond in 2013 by a slim margin. It allowed, among other things, the district to upgrade school security with single-access points of entry at each school that did not have it, Thomason said. At a Sept. 26 board meeting, Chief Financial Officer Gary Holland said the district may seek another bond in 2019.
McCord said GPS also will consider another bond election. GPS is utilizing funds from its 2015 $98 million bond. In the 2017-18 school year during the first phase of bond expenditures, the district spent $32.1 million on technical upgrades; safety, mechanical and structural upgrades at schools; and the purchase of 53 buses.
Voters approved CUSD bond packages in 2010 and 2015. The district may ask its board for permission to go for another bond in 2019, in part to build another school, possibly in Gilbert, to keep up with anticipated enrollment growth, CUSD Chief Financial Officer Lana Berry said.
Overrides typically last seven years, with a phaseout in the final two years. Because of that phaseout, schools frequently ask for a renewal at five years.
GPS had overrides fail in 2012 and 2013 but got a 10 percent override passed in 2015. HUSD received approval from voters on a 15 percent override in 2015, and Holland told the governing board Sept. 26 district staff would ask permission to seek a renewal next fall. CUSD had a 15 percent override pass in 2013, and voters agreed to renew it in 2017.
In addition to continued restoration of DAA money, district officials said they also hope to see the promises from the state on pay raises the next two years fulfilled, which will help with recruiting and retention.
In HUSD, which already has a 95 percent staff retention rate, Thomason said the next big challenge to tackle is non-certified staff’s compressed salary scale. That came in the wake of minimum-wage hikes from Proposition 206, passed in November 2016, which has resulted in custodians making the same wage as some nursing staff, for example.
Berry and McCord said another issue they would like to see addressed is equitable funding for districts and charter schools. Charter schools, which are funded entirely from the state’s general fund, receive more money per-pupil from the state, district officials said. However, charter schools cannot ask voters for bonds or overrides.
“I think if we’re all public schools, we should all be held to the same standard,” McCord said.
Berry said groups will have to figure out how to move education funding forward so that Arizona remains attractive to families and businesses. McCord called for compromise.
“I want them (Legislators, educators) to be able to come together and have an agreement and there is somewhere in between,” McCord said. “I think that there can be a compromise. I’m just not sure we’re there just yet.”
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