The state Legislature has made it all but impossible for Payson schools to repair buildings, update facilities, keep up with technology or even replace aging school buses, the school board learned last week.
The briefing on the 2014-15 budget came heaped with bad news about efforts to repair aging buildings and cope with other capital improvement needs.
And to add insult to injury, the state will most likely charge the district some $33,000 to provide high-speed Internet connections for other districts.
“We won’t see a dime of that,” said Technology Director Joni deSzendeffy. “It’s supposed to be to bring the cable to the door of districts that don’t have any Internet at all — but it’ll probably go straight into the state coffers.”
Administrators told the board the 2,400-student district needs $1.4 million in building, vehicle repair and replacement and new technology. However, the district has only about $500,000 to spend — unless it uses most of the roughly $1.2 million it received from the sale of Frontier Elementary School. The district had hoped to use that money to perhaps add classrooms at overcrowded Payson Elementary School. Instead, the full amount will barely cover the most critical capital needs.
Moreover, the district this year must also convince voters to renew a budget override, which provides for a property tax surcharge that brings in more than $1 million. The district has a projected $1 million shortfall in the operating budget and a roughly $800,000 shortfall in the capital budget this year, even with the override money coming in. If voters reject the override, it would add to the school’s woes in the 2015-16 budget.
“You will have to make some painful decisions,” district finance manager Kathie Manning told the board.
The district learned that four of its $150,000 school buses have more than 175,000 miles on them — as do several smaller vans.
In addition, administrators said the district’s 20-year-old phone system constitutes a safety problem, since many classrooms don’t have phones. Moreover, the phones don’t have caller ID so teachers can’t tell who is calling in and emergency personnel like police and paramedics can’t determine where a call originates — which would make it hard to respond in a medical emergency or a threat to the school.
The district may also have to shelve ambitious plans to upgrade school’s technology, with high-speed wireless Internet, upgraded servers and a system that makes it possible to expand use of computers, tablets and laptops on campus.
Technology director deSzendeffy had earlier won board support for a more than $400,000 annual plan to upgrade district technology over the next three years — but scaled the plan back due to the bleak budget news.
She presented a new plan that next year would cost $100,000 for a new phone system, $191,000 for a new set of servers and $75,000 for high-speed, districtwide Wi-Fi Internet connections.
Her original plan called for leasing new equipment — but the district can’t afford to enter into a lease without assurance it can pay next year. “I just don’t feel that we can commit to future payments,” she said.
Instead, she suggested the district could use most of the $325,000 in anticipated federal forest fee payments this year to buy as much equipment as possible up front. The federal government has for years made payments to school districts so hemmed in by federally owned land that they have a narrow property tax base. But Congress has signaled it may well stop funding the program this year.
“I do understand,” said deSzendeffy of the need to scale down the program. “Nearly every piece of equipment we have is well past the ‘end of life’ cycle. But we have a critical lack of support for education in Arizona. The governor has decided that all the capital cuts are going to remain permanently. It makes it difficult to do anything when you have no money coming in.”
The capital budget presentation came after the board learned that the district will also have to cut about $1 million from a proposed operations and maintenance budget of $15 million. The district’s enrollment has risen and Gov. Jan Brewer’s budget included a 1.4 percent increase for inflation — but other charges and increases in cost have eaten up those increases in the operations budget.
Unfortunately, the capital budget offers even tougher choices, thanks to the convolutions of state educational funding policies.
Back in 1998, a group of school districts with low property values sued the state on the grounds that property-tax-rich districts had far more to spend per student. The state Supreme Court ruled the property-tax-based school funding system was unconstitutional and ordered the state to equalize funding.
The Legislature created the School Facilities Board and set aside $1.3 billion to upgrade facilities for the low-property-value districts. Lawmakers also reduced by about two-thirds the ability of school districts to issue bonds to raise money to build their own facilities.
However, for the past four years the Legislature has almost stopped funding capital improvements for districts statewide.
The state’s decision to cut capital money compounded the virtual elimination of the ability of school districts to seek voter approval for bonds to fix their own facilities.
Worse yet, the decline in property values in the past several years has made the debt-to-property-value so high that districts can’t issue any bonds at all. Even when they have some bonding capacity left under state law, the tax rate for new bonding on a shrunken property tax base is so high that voters have mostly rejected the requests for extra funding.
As a result, most districts in the state have no way to repair existing buildings and equipment, much less build new facilities.
Gov. Jan Brewer has proposed scrapping the old building-renewal formula and instead providing about $33 million annually for the School Facilities Board to dole out. She would also double the bonding capacity of individual districts. However, districts could only issue bonds to add facilities if no schools within 10 miles had space for new students. However, the Legislature has repeatedly cut the governor’s budget proposals in the past several years.
The school board will have to grapple with the impact of the still unpredictable state budget decision and figure out what the district can do without between now and the deadline for adopting a budget in June.