Education Funding

July 7, 2009

Transcript:

Ted Simons:
Before lawmakers restored $3.2 billion in k-12 cuts, there were lots of questions about how the governor's veto would impact public education.

Richard Stavneak:
The k-12 line item veto as I mentioned eliminates 3.2 billion of funding to school districts. Now, school districts still retain $604 million of a rollover payment for '09 obligations that was due to them at the beginning of July. So that was funded by separate legislation and a year ago at this time and so that remains in place. However, the next payment to school districts is due on July 15th and then September 15th and then October 15th and charters are paid on those same days, except they are also paid on August 15th, with the veto, there is no money to make those payments. So again schools are covered to the extent that they are getting $600 million of a rollover payment, but any money beyond that for the payments on the 15th of the month, there is not money at this point to support those payments. And then as I previously noted the federal stimulus legislation requires states to maintain the '06 maintenance of effort level, meaning to qualify for the billion dollars in federal stabilization funds you've got to maintain at least what you spent in fiscal '06.

Ted Simons:
Now, many of those concerns were avoided with the budget fixes approved by lawmakers yesterday. Here to talk about restored education funding is Chuck Essigs of the Arizona association of school business officials. Good to see you again, thanks for joining us.

Chuck Essigs:
Thanks for having me.

Ted Simons:
Your thoughts on the legislature's actions yesterday?

Chuck Essigs:
It was surprising to everyone, I think, who studies legislative process, that they could move that quickly and have that kind of agreement. It was amazing that there was not one no vote on some controversial issues.

Ted Simons:
With those results do you think the governor did the right thing by vetoing k through 12 education?

Chuck Essigs:
I think it proves she did the right thing, got them back together, got the republicans and Democrats working together in a unified manner, so I think it was a gutsy move on her part, but it certainly paid off.

Ted Simons:
It was a gutsy move when you first heard about it though, were you confident that something would come out of it?

Chuck Essigs:
Well, I think there's two things, one is she stuck with her word. She said she would not allow a budget to be approved by her office if it made significant cuts to k-12 education and she felt those cuts were too significant, so I don't think it was a surprising action on her part because she did what she said she was going to do.

Ted Simons:
Now, we have k through 12 at '09 levels correct plus 2% increase.

Chuck Essigs:
Plus 2%.

Ted Simons:
Ok. Additional funding on the table as well?

Chuck Essigs:
If the legislature doesn't take some, I've never seen this done before, but it's a unique way of doing it. If the legislature does not take some action by October 1st, then some additional funding automatically kicks in, $175 million in additional capital funding kicks in, $80 million in funding for utility kicks in. Additional money for career ladder. So the legislature has some time to try and put a budget together, but if they don't, there's automatic funding increases that will take place.

Ted Simons:
In the grand scheme of things you're looking at $100 million more in spending than before.

Chuck Essigs:
The day after that action, the school budgets basically increased in their operational areas by $100 million.

Ted Simons:
Does this fulfill k through 12 needs?

Chuck Essigs:
We're still below where we were when we started the 2008-2009 school year, so it's even with the 2% and with that money restored we're still below where we were last year, but I think when you look at the tough economic times, certainly a good faith effort by the legislature and the governor to try and get adequate funding for schools.

Ted Simons:
I know there was a lot of concern regarding charter schools as well. Are they now safe?

Chuck Essigs:
Charter schools didn't get some of the cuts that k-12 education got. But their issue was they weren't going to get their July 15th payment from the state and they would have had a hard job meet something of their obligations at that point in time.

Ted Simons:
So they're in the clear.

Chuck Essigs:
They're in the clear.

Ted Simons:
As far as formulas are concerned, I don't want to get too deeply into this, gets heads rolling and eyes spin, but as the formulas are concerned, are thicks better now than they had been in the past or does the formula have to be changed for how school districts and such are funded?

Chuck Essigs:
I think there needs to be adjustments to the formula. But the formula in Arizona and most states has two major components, the numbers of students that you have that the state is going to fund schools for, and then how much they allow the funding level to be per student, so you can change the formulas, you can adjust them a lot, but those are the two main factors, the problem in Arizona as I see it is we're 49th in spending, so even if we picked some other formula somewhere in the world that somebody said was a perfect formula, if you don't put any more money into schools we would still be 49th in revenue resources.

Ted Simons:
With that in mind overall, last question, the state of education funding right now in Arizona, how do you see it?

Chuck Essigs:
We're going through some very difficult times as all levels of government are going, but I think school districts appreciate the governor and a number of legislators who are doing all they can to try and spare excessive cuts to k-12 education.

Ted Simons:
Gearing up for 2011?

Chuck Essigs:
That in most people's minds is going to be even more difficult, because the federal stimulus moneys will be used up by then, unless the economy starts to recover relatively quickly 2011 is going to be worse than 2010.

Ted Simons:
All right, Chuck, thanks for joining us.

Chuck Essigs:
Thank you for having me.