County, State Face Off Over College Funds

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A legal opinion issued by Attorney General Terry Goddard could increase Gila County Community College coffers by more than $1 million.

Goddard's opinion, issued June 21, agrees with an earlier one from Gila County Attorney Daisy Flores that reimbursement payments from the county cease at the end of the fiscal year in which the provisional community college district was formed.

That means, because Gila County voters approved the formation of a provisional community college district in November 2002, the county was not obligated to pay out-of-county tuition beginning July 1, 2003.

It has been a two-year contention by Gila County officials including County Manager John Nelson and Legislative Liaison Lionel Martinez that the Office of the State Treasurer erroneously continued to withhold tuition reimbursement payments from the county's monthly Transaction Privilege Tax through April 2004.

In a letter dated June 24 to Arizona State Treasurer David Peterson, Nelson demanded the immediate return of the "erroneously withheld monies and that any further withholdings cease immediately." The amount Nelson claims was held is $1,202,676.67.

Nelson also included a copy of Goddard's opinion affirming the Arizona State Legislature's intent in passing a provisional community college statute in 1999 was to have county reimbursement payments end at the end of the year the provisional district was formed.

Peterson responded almost immediately.

"Since the (Joint Legislative Budget Committee) provides this office with the withholding schedule, I have requested they provide us with instructions as to how the monies withheld from Gila County in the fiscal year 2004 should be recovered and ultimately returned to Gila County."

That doesn't necessarily mean the county will receive that money from the state treasurer, according to Martinez.

He says the problem exists because the state treasurers didn't read and study the legislative statue concerning provisional colleges when it became law.

"They are too lazy or too ignorant or both to do their job," he said. "The state treasurer also doesn't want to make a decision."

That's not true, Deputy Treasurer Blaine Vance said.

"They will get it eventually. We don't have the statute authority to go in and get the money. We are waiting for the JLBC to tell us how to rectify this," he said.

Martinez predicts that if the money isn't forthcoming soon, more legal maneuvering might be needed.

The roots

The dispute between Gila County and the state treasurer began July 2, 2002 when the board of supervisors voted to sever ties with Eastern Arizona College and form a provisional district.

At the time, officials said they understood the decision to become a provisional district would possibly result in a loss of some funding for Gila Community College. The funds lost would be equalization dollars and Perkins vocational education money.

According to Martinez, the money the state treasurer is holding, out-of-county tuition, has nothing to do with equalization and Perkins funds.

County Supervisor Ron Christensen is among those who is in the midst of the fight to retrieve the out-of-county tuition reimbursements.

In October 2003, he summed up the battle saying, "The Gila County Community College system is somewhat treated like the hemorrhoid on the colon of the education system of Arizona. They don't even give us back the dollars we put into the system, so our work is cut out for us."

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