2010 Budget - When it Rains, it Pours

School districts across Arizona receive funding from several different sources, not just the state budget (although that is the largest piece). Unfortunately, mainly due to the economy, several of these additional funding sources are down for 2010.

For example, a majority of districts in Arizona had declining enrollment in 2009. A large percentage of the decline can be attributed to foreclosures and relocations due to job losses. Because districts are paid one year in arrears, the impact of declining enrollment will be felt hard in 2010. With that said, there are a dozen or so districts that are still growing rapidly and we will have to address their unique issues in the 2010 budget (i.e. new school facilities, soft capital for furniture, etc.)

One other area impacting school funding is sales tax. School districts receive sales tax proceeds as a result of Prop 301. A large portion of this funding is used for teacher salaries. Schools are being told that as a result of declining sales across all categories, the proceeds from prop 301 will be down by at least $60 per student. For the Mesa Public Schools and their 70,000 students, this is a $4,000,000 hit that is completely outside of the state budget.

A similar conversation can occur for casino gaming proceeds. As a result of the tribal gaming agreement signed several years ago, school districts receive a percentage of casino earnings per student. Because casino revenues have dropped this year, so will the portion going to education in 2010. This is also outside of the state budget.

Finally, the Arizona Department of Education recently made a decision to fund English Language Learners at $8.8 million for 2010, instead of the $40 million they funded in 2009. It is the opinion of someone at ADE that the state can comply with the ELL Task Force model for 25% of the funding it took to comply in 2009. Whereas the Mesa School District received $1.8 million of ELL funding in 2009, they will be receiving zero in 2010. This is also outside of the state budget.

So what does all of this mean? There are actually two important points to make. First, we recently received several e-mails from a group of teachers in eastern Arizona complaining that the Legislature had cut their district budget by 8%. We truly feel for these teachers and the situation they are in; however, the legislative cuts for 2009 were around 2.5%. After staff looked into their situation, it was determined that this particular district had been hit hard by a whole wave of bad luck including declining enrollment, job losses and rising expenses. With that said, it still does not provide much comfort when your paycheck has been reduced so that the district can make it through the end of the school year.

Second point, all legislators need to remember that any cuts proposed for 2010 will be on top of the items already discussed here. For many districts, they will face at least a 5% budget cut before any impact from the 2010 state budget. We promise to consider these outside reductions as we set our 2010 budget and try to grapple with a $3.2 billion deficit.