Finance Department Scoop                             December 2017 Edition

Bond Election 2018

The last bond election held by the district was in 2011 for $21 million.  The district successfully used bond funds to construct a Boy’s and Girl’s Club, purchase school buses, provide for student technology upgrades, upgrade buildings (roofing, flooring, painting ,etc.) and pay off an energy-financing contract. 

The district is exploring the feasibility of a new bond election for November 2018.  The 2018 bond will provide for a new middle school at the Balsz campus, new classroom furniture, remodeling of facilities, school buses, painting, and roofing, among other projects.  The board will receive a report in March regarding the sizing of the bond election and the potential impact to the tax rate.  In order for the election to be on the November 2018 ballot, the board is required to call for the election by June of 2018.  Assuming the election is successful in November, the district will sell bonds in January 2019.

Budget Reductions

The Governing Board voted in November 2018 to return to the 180-day school calendar. In 2009 when the district went to the 200-day calendar, it received an additional five percent funding in the budget from the State for the additional days.  Now, the district is required to reduce funding by five percent for FY 2018-19. 

This is only part of the reduction equation.  In addition to the reduction for the shorter school year, district enrollment has declined for over ten years.  Now, because of current year funding, the district is required to reduce the budget by approximately five percent more for student decline.  In short, the district is facing almost a ten percent decline in funding for FY 2018-19, which equates to approximately $1 million dollars.   We will evaluate all areas of the budget for efficiencies.

Replacement of Classroom Site Fund

As most of you are aware, Proposition 301 (Classroom Site Fund) dollars will expire at the end of the school year in 2021 unless replaced by another funding mechanism.  Voters approved the 0.6 percent sales tax increase in November 2000.   Through the district’s Interest Based Bargaining process, there is a plan to have Prop 301 funds last for teachers until FY 2022.

Governor Ducey has said that he supports renewal of the tax but has not said if he would support an increase to it.

In an article in the Arizona Tax Research Association’s November 2014 Newsletter, it shows that statewide there are eighteen school districts that receive $211,350,871 in Desegregation money that the rest of the districts in the state don’t receive.  The districts in Maricopa County are Phoenix Union, Tempe Elementary, Roosevelt, Phoenix Elementary, Mesa Unified, Scottsdale Unified, Washington Elementary, Cartwright Elementary, Glendale Union, and Isaac Elementary.  Collectively, these districts levy an additional $132,918,565 to correct their segregation issues and/or civil rights deficiencies.

The ability to levy the additional money came through what is commonly called a Deseg order which is handed down from the U.S. Department of Education Office of Civil Rights (OCR).  The OCR ensures compliance through two methods: 1) OCR initiated cases or, 2) reviews of complaints made by any party who feels discrimination is occurring at an educational institution that receives federal funding.   If a district is found in violation, they enter into a settlement agreement with the OCR and then receive a Desegregation order letter.  Then the district is allowed to levy additional money to correct the complaint.   For example, it has been over thirty years since Tucson Unified was placed under a desegregation order and in 2014, the district levied an additional $63 million from local taxpayers to comply. 

State audits show that the additional money is used for additional Maintenance and Operation spending capacity and is not linked directly to desegregating pupils or remediating civil rights violations. [1]

The reason that Balsz does not have the ability to levy Deseg funds is because either no complaints were filed or the OCR did not conduct a random site visit on the district.

This is one of many variations in school funding that can make a substantial difference in a district’s ability to pay higher salaries and why comparing teacher salaries on the surface may not be the whole story.