Windfall Enriches Schools

Last-minute federal money eases tight Payson budget

Payson Unified School District Office

Payson Unified School District Office Photo by Andy Towle. |

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In a welcome budget surprise, the federal government this week gave the Payson Unified School District an extra $368,000.

“This came as a complete surprise,” said Payson Unified School District Business Manager Kathie Manning.

The board hasn’t yet incorporated the added money into the budget for the upcoming school year, but may add at least a portion of the money to the reserve fund for its $14.6 million budget.

The district earlier this year approved layoffs that forced a 10 percent reduction in the district’s payroll, in part based on the prediction it wouldn’t get the federal payments.

The day before his first board meeting, Superintendent Ron Hitchcock received notice from Gila County Schools Superintendent Linda O’Dell that the district will receive federal “forest fees” money intended to compensate districts for the property taxes not paid on forest land.

O’Dell recommends to the Gila County supervisors how they should split the money amongst the various school districts, since more than 90 percent of the land in the county is owned by the federal government.

In the past, some districts have complained that O’Dell has reserved too large a share of the federal money to operate the county school system, which provides services to districts but operates only one small alternative high school.

Washington lobbyists had warned the county not to expect to get the money this year, but then Congress on July 6 included the money in HR 4348, a long-overdue transportation bill.

“The conversations behind the scenes have been ongoing,” said O’Dell. “The National Forest Counties and School Coalition (NFCSC) ... and Rep. (Paul) Gosar have been active in lobbying on this.”

The NFCSC lobbies for the federal payments to rural districts, which Congress first approved after a presidential proclamation set up the 153 million-acre national forest system in 1905.

Establishing the national forests severely curtailed the ability of counties to develop tax-paying businesses, so the federal government offered to pay fees to the counties to offset the loss of revenue.

Until 1986, this system worked well because grazing, mining and logging on federal lands generated money, which the federal government shared with the schools, but lawsuits and legal restrictions curtailed those activities, drying up the revenue used for the fees. “It’s become a political issue,” said O’Dell.

Now the payments represent a subsidy for many rural areas, which congressional representatives from Eastern states increasingly oppose, said O’Dell.

With 97 percent of Gila County owned by the federal government, the residents who own the remaining 3 percent do not generate as many taxes as an East Coast county would, said O’Dell.

The threatened loss of forest fees severely affected plans for the 2012-2013 school budget. Throughout the year, O’Dell and school administrators bleakly reported that due to the poor state of the economy, the federal government planned to eliminate the forest fee payments.

In her previous presentations to the board, Manning blamed the loss of forest fees on a significant decrease in the budget bottom line. She said the fees had covered many teachers’ salaries last year. But anticipating the loss of those fees this year, Manning moved all salaries and benefits into the maintenance and operations (M&O) budget this year, forcing cuts in other areas.

“What you have to be concerned about is taking one-time money and applying it to ongoing expenditures,” said Manning.

The district doesn’t know whether Congress will continue the forest fees program next year.

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