Education Legislators

April 22, 2009

Transcript:

Ted Simons:
In recent weeks school districts have had to lay off thousands of teachers knowing they might have the money to hire some of them back. But they won't know for sure until lawmakers pass a budget for 2010. Schools are waiting to find out how painful budget cuts will be and to what extent federal stimulus money will soften the blow. In just a moment, members of the House education committee tell us what they know, but first here's what State School Superintendent Tom Horne had to say about his expectations for cuts to K-12 education. This was last week on "Horizon."

Ted Simons:
You have said the districts especially are overreacting to budget cuts. Explain, please.

Tom Horne:
Well, this first came to my attention because we got calls from teachers from a large district that gave layoff notices to 30% of their teachers. 30%. And they cut out all their music teachers, all their arts teachers, all their P.E. teachers. So I looked into it because I have access to easy access to information from the joint legislative budget committee. And under the federal stimulus plan, Arizona can get $1.5 billion if they abide by certain rules. I assume the legislature will not give up $1.5 billion. They will abide by those rules. I don't think it's a reasonable assumption that they'll say good-bye to $1.5 billion. The rules say that the legislature cannot cut more than $800 million from K-12 education, and that the federal funds will backfill 600 million of that. The net cut is $196 million, which is 2%.

Ted Simons:
Joining me now are members of the House Education Committee, committee chairman, Representative Rich Crandall, a Mesa Republican and former school board member and Representative David Schapira, Tempe Democrat and former high school teacher. Thanks for joining us on "Horizon."

Rich Crandall:
Thank you.

Ted Simons:
A 2% cut likely. A five to six percent cut, perhaps, says Superintendent Horne. Has he got his numbers right?

Rich Crandall:
Maybe for some district out there, but for the majority, no. The bigger reason is if you look at the state's share that may be true. But by the time you add all the cuts that have nothing to do with the legislature unfortunately the cuts will be larger than that.

Ted Simons:
I want to get back to those in a second. Again, when Tom Horne says he adds up the numbers, looks like 2% to him, does it look like 2% to you?

David Schapira:
It doesn't look like anything to me, because we haven't seen anything. Here we are four months into the legislative session and we really have no idea what the budget looks like. There have been no concrete numbers put out. There's been no complete budget package for fiscal year â€˜10 introduced and so we really don't know. We've heard all these different ranges of what it can look like, but as Rich said it's going to be different depending on the district. Different districts have different impacts because of utilities costs and other things. We are calling on the majority of the legislature to put out a budget so that school districts will have the information to work on.

Ted Simons:
You referenced here the idea that it's not just what the legislature does that affects school districts. Things like declining enrollment, those sorts of things, talk to us about how that affects a district.

Rich Crandall:
Two of the biggest things we had this year start with the investment return on the state trust land and sales tax dollars, typically referred to as prop 301. $390 per kid last year was the estimate. This year the estimate is $244. If you're my district, Mesa, that's about an $11 million hit. Add excess utilities, declining enrollment, by the time you get all through with everything mesa's facing a $64 million cut this fall with legislative proposals and all these other factors we talked about.

Ted Simons:
These other factors that come in, are they being talked about, negotiated, discussed, when the legislature looks ad education cuts?

Rich Crandall:
Early on, I asked Mesa to prepare a spread sheet for me. Cuts that the legislature can do nothing about and cuts that we can do something about. I spent the last three or four weeks going to legislators saying remember guys, anything we do is piling on to the cuts already there.

Ted Simons:
I want to go back to Superintendent Horne. He was saying school districts were overreacting when, I don't know which district it was, but according to the superintendent was talking about 30% layoffs and cuts, these sorts of things. Were districts overreacting a bit when you got Gilbert with 400 people laid off and Mesa with hundreds, 200 over there. Is that a bit of overreaction here?

David Schapira:
Let me be clear, the districts are operating on whatever information they have. It's not the district's fault the decisions they're making. They can only base it on what they're hearing from the legislature, expectations as far as the stimulus package. And I felt this on a personal level, because my wife was one of those to receive a riff letter from Kyrene School District. And she is one of many teachers across the state who is uncertain about her future and unsure if she'll have a job next year, but it's not those districts' fault. It's the state legislature which hasn't stepped up to the plate and passed a budget to give these districts the information necessary. You can't say someone's overreacting if they have nothing to react to. They're reacting to what they're assuming is the guess of what's going to happen when we pass a budget.

Ted Simons:
Again, the superintendent says listen to me. Here's what's going to happen, 5%, 6% at the worst. You're overreacting in Gilbert when you tell 400 people might be losing your job.

Rich Crandall:
Here's the challenge. The consequence if you lay off too few is that you have to pay the contracts regardless of whatever additional information comes out as David mentioned. If you lay off too many, you can always hire back. If you lay off too few, you can't do an additional layoff in July or August. You're kind of stuck with what you have. So everybody is probably erring on the side of caution. There are a couple of districts I think went too far. Erred too far and I think Superintendent Horne's talking about those, but the majority have a very good idea where their budget's going to be.

Ted Simons:
Real quickly, the idea that schools have a savings plan, a carry forward idea, where a school has a rainy day fund. There's an idea planned afoot right now as I'm sure you're well aware to maybe use some of that money, as far as backfilling or doing something regarding the cuts. Is that a good idea?

David Schapira:
No. Frankly calling it a rainy day fund is the mislabeling of the purpose of the money. It's money the legislature authorized districts to spend in each given year. It hasn't been a rainy day fund or slush fund as it's called. It's money we've given to districts in the past. If we take that money we're essentially punishing districts that have done well with accounting and made it through the fiscal year still maintain that money. That's a mistake to go and punish those districts by sweeping those funds and really as I'm sure Representative Crandall mentioned, it's an undue burden on the districts and taxpayers, it ends up having a tax impact on our communities.

Ted Simons:
Is it a punishment or using the money for what it was designed to do?

Rich Crandall:
There's two very important concepts here. Number one, it is literally as inequitable cut as possible. Some districts have cash, some don't. We're going to take from those who do? Here's a great example. We have excess utilities that ends June 30, 2009. Tom Boone, the last three years when people talked about extending excess utility, says you know, people knew it was ending June 30, 2009. They need to be responsible and plan for it. He's exactly right. We come along and say all you districts who planned for excess utilities to go away by saving for the dropoff, we're going to take that money you were planning with.

Ted Simons:
I can't let you guys go without a talk about higher education and university tuition and the such. There are concerns that with the surcharge now on top of tuition increases that there might be a constitutional issue here regarding the state's universities and providing this tuition to education as nearly free as possible. Do you see a crisis or perhaps a question coming up here constitutionally?

David Schapira:
Certainly. And this is a question we've been debating for many years now because tuition has gone up in the past few years, as to whether we're meeting our obligation to keep higher education in Arizona as nearly free as possible. Certainly tacking on an extra thousand dollars or whatever it's going to be for next year as well, that raises those questions even more. The courts have decided we have to maintain at the top of the bottom third. We can't have our tuition any higher than that. I'm sure we will be above that. That is not the University's problem. That is not the Board of Regent's problem. These are public universities funded by the state government and if the state doesn't step up to the plate and put the money where the founders intended it to go, we are punishing the students.

Ted Simons:
The legislature, are you guys the ones not making the education as nearly free as possible.

Rich Crandall:
The biggest challenge we face, right now we have stimulus money allowed to be put back into the universities. We do know how much but we don't know when or where it will be placed back so the universities like the districts have to make decisions based on the information they have currently, not what may or may not come six months down the road. So we're watching that closely.

Ted Simons:
Do you see a constitutional question here?

Rich Crandall:
We're definitely butting up against that. But I went to Notre Dame, it was 33,000 a year.

Ted Simons:
All right. We'll stop it right there. Gentlemen, thanks for joining us. We appreciate it.

Rich Crandall:
Thank you.

David Schapira:
Thanks.