A fretful Payson School Board this week asked for a resolution to be brought to them at the next board meeting to seek voter approval to continue a 10 percent budget override that produces $1.2 million annually for the financially strapped district.
Superintendent Greg Wyman said voters have repeatedly approved the 10 percent override since 2004, with money going to reduce class sizes, provide advanced classes for high school students, bolster technology programs and support music, physical education and other programs.
The law would allow the board to change those priorities or seek a 15 percent budget override for specific purposes. The 10 percent override would simply extend the existing programs and tax rate. Taxpayers would therefore see no increase in their tax rate. However, a 15 percent override would boost the district budget by about $600,000 for specific programs and purposes and so increase property tax rates.
“If you chose to go out for the 15 percent and it fails, then you will have to start the three-year phasedown. So if you don’t pass the 15, you lose the 10.”
After briefly agonizing over the choice, the board told Wyman to bring to the June 10 meeting a board resolution to extend for five years the existing override. If voters reject that measure in November, the district will have to cut $400,000 in each of the next three years as it phases out the override money.
Wyman advised the board not to change the priorities for the 10 percent proposal, since voters have repeatedly approved the existing list of programs.
“You have to be careful in writing your language for an M&O (maintenance and operations) override. If you say we’re going to change to something different and it passes, then you have to find another way to fund those items that are currently being funded by the M&O override, such as music, or whatever it is. That’s why I recommend you go with the same language for the M&O override that is currently in place.”
Board member Jolynn Schinstock said, “So if it doesn’t pass, voters know these are the things you’re looking at cutting.”
“It’s critical that the community sees this as a matter of promises made, promises kept,” said Wyman.
Board member Shane Keith said loss of the override would prove “devastating” to the district’s roughly $14 million budget, with the overwhelming majority of the money going to salaries. Arizona already has among the lowest teacher salaries and largest class sizes in the nation.
State law allows districts to exceed the state spending limit with voter approval, renewed every five years. The current system evolved out of assorted court cases after judges ruled the old property tax based system allowed rich districts to spend far more per student than property-tax-poor districts like Payson. The current system attempts to “equalize” funding by collecting property taxes from the richest districts and sharing them with property-tax-poor districts.
However, lawmakers also gave districts a limited ability to spend more with the support of local voters. School districts also have a limited ability to seek voter approval for bonds, although the state remains responsible for major capital projects — like new school buildings. The state has refused to actually fund the capital improvement budget statewide for most of the past decade.
Many school districts have come to rely increasingly on the override money, with the state still roughly 48th nationally when it comes to per-student spending.
In 2018, voters statewide approved 77 percent of the school bonds, operations overrides and capital overrides. However, many school districts can’t reliably pass the overrides and have all but given up, according to the Arizona Education Association.
In 2018, voters approved all seven of the 10 percent override requests for capital spending and 19 of the 24 efforts for maintenance and operations overrides. Voters approved seven of the 12 bond requests for specific projects.
So statewide, only about 70 percent of the override efforts won voter approval.
Payson schools have enjoyed mostly consistent support from the community. Only 24 percent of students attend the 39 districts like Payson with a 100 percent pass rate. About 43 percent of students live in districts with pass rates above 50 percent. About 12 percent live in districts that have never passed an override or bond issue.
All told, only 28 percent of students live in districts that can reliably pass bonds and overrides, said Anabel Aportela, research director of the Arizona School Boards Association.
School bond issues have not fared as well as overrides. The pass rate for bond issues has fallen to just 58 percent — the worst in years.
Overall, the number of districts seeking override money for voters has declined steadily since 2004, likely because districts that can’t muster community support have increasingly given up, said Aportela.
Most of the money raised by overrides and bond issues goes to districts in Maricopa County, although there are three times as many districts outside that county. The pass rate for operations overrides inside Maricopa County is 74 percent, compared to 62 percent in outlying counties.
That makes the support of Rim Country voters for the school measures even more noteworthy.
The big difference in community support means the system still creates a system of winners and losers when it comes to per-student funding
“When I hear lawmakers say districts have an average of $600 per student in bond money, I say, well, no: There are 40 districts that have bond money. The rest of them don’t have any. It might average out, but that doesn’t mean everyone has those dollars. Same with overrides and capital overrides,” said Aportela. “Why does it matter? If you think about funding and all of the needs that districts have and why they go out for these, only less than a third — 28 percent of students — are in a district that can reliably pass one of those measures, meaning that since 2011, they’ve passed everything they’ve gone out for.”
Payson voters have routinely extended the M&O override and in 2006 also approved a school bond issue for upgrading and maintaining facilities.
The latest extension of the $1.4 million operations budget would not help the district with another problem, a $12 million accumulation of deferred capital improvements detailed in a consultant’s report. Those improvements include a host of changes to improve security on the district’s four campuses in the event someone with a gun seeks access.
The consultant recommended the district budget $3 million to $4 million annually to catch up with the long-deferred capital needs. Instead, the budget usually spends about $300,000, including the last of the money raised by the sale of Frontier Elementary School.
The Legislature has failed to fund the court-ordered capital funding plan for schools statewide. Gov. Doug Ducey has sought funding for the capital funding formula for the first time in years. But lawmakers have so far not adopted his proposed budget and an alternative Senate budget features significant cuts in the money Ducey proposed for schools.
In the meantime, an anxious Payson School Board asked Wyman to return in June with a formal resolution to put a continuation of Payson’s 10 percent M&O budget on the ballot.