What's next for Arizona's controversial cap on school spending? GOP says don't worry, be patient

Republicans in the Arizona Legislature have two messages about a controversial spending cap on schools that could lead to big budget cuts in a few months.

First, they say they'll get it done. Second, they're not in a hurry.

“Hear us now: Schools will not lose out on the money we have allocated for them," House Majority Leader Leo Biasiucci, R-Lake Havasu City, said in a videotaped statement Monday, with his Senate counterpart, Sonny Borrelli, nodding in agreement. "We will address this. But we will not rush the process.”

For a second year, Arizona's district schools are watching nervously as a March 1 deadline looms. The combined spending plans of Arizona's school districts exceed a constitutional limit that was set more than 40 years ago, and March 1 is D-Day: Schools will have to cut their budgets by 17% in the final two months of the school year unless a bipartisan supermajority of lawmakers waives the limit.

That vote came at the 11th hour last year as Republicans hemmed and hawed, while Democrats pressed for quick action. Both parties will have to provide votes for the measure to pass.

This year, despite the GOP leaders' early statement of support, there is skepticism that Republicans might want to tie their vote for the waiver to other bills that Democrats would find hard to support.

There's good reason for lawmakers to raise the limit: They voted in overwhelming numbers last summer to boost school spending, including the addition of $1.2 billion to the formula that provides basic school aid. But that boost pushed the schools past the limit, to the tune of $1.3 billion.

Former Gov. Doug Ducey told lawmakers he would call a special session in late 2022 to raise what is formally called the Aggregate Expenditure Limit. But that plan collapsed as lawmakers and Ducey piled on other requirements for the session.

So school districts find themselves in basically the same situation as a year ago: A will-they-or-won't-they game of waiting for lawmakers to act.

House Speaker Ben Toma, when asked last week about the prospects of raising the limit, characterized it as inevitable.

"It always happens, doesn't it?" said Toma, R-Glendale.

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Schools waiting to spend money

Assurances from Republicans haven't dispelled worries, however.

The "don't rush us line" has fueled suspicious that GOP approval might be used as leverage for other bills, which could complicate matters.

“There’s no reason not to get it done as soon as possible and to do it without additional strings attached," said Greg Wyman, superintendent of the E.O. Combs Unified School District in the far southeast Valley.

The spending cap is almost guaranteed to emerge as an issue again next year, and there are growing discussions about asking voters to modify or abolish the limit via the ballot in 2024. Dealing with it quickly this year would free up time and energy for those pending discussions, Wyman said.

Waiving the cap requires a simple vote: 20 in the Senate and 40 in the House. Gov. Katie Hobbs has no role, although Hobbs has made it clear she will use her bully pulpit to push lawmakers to act and used her marquee State of the State speech to raise the issue.

Hobbs on Monday said she was "hopeful" lawmakers could take that vote quickly in the normal course of their business. But, she added, "(I)f we need to call a special session to get it done, we will."

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Paul Tighe, executive director of the Arizona School Administrators organization, said the uncertainty has caused budget officials to hold back on spending some, if not most, of the extra money lawmakers approved in late June. There's a wariness to sign new contracts without the assurance that the money will be there to cover costs, he said.

“I don’t know a district that doesn’t need it," Tighe said of the extra spending.

And if lawmakers opt not to raise the limit, forcing budget cuts, the downside goes beyond immediate school operations.

"In the end, $1.3 billion to $1.4 billion out of the state economy would be devastating," Tighe said. Schools are a major contributor to the local economy, from the salaries for employees from janitors and teachers to utility payments to the equipment schools need to operate. In rural areas, schools play an outsize role in the economy, he noted.

The limit does not affect charter schools, which are publicly funded. That's because the constitutional spending limit was created before charter schools came into existence.

Bills ready to advance at Capitol

Two Republican lawmakers have introduced resolutions to waive the spending cap. Both bills have quickly passed the procedural hurdles needed to bring the issue up for debate and were assigned to the House Education Committee.

Rep. David Cook, R-Globe, said he sees no reason for delay.

"This is business we should have taken care of in the last legislative session," Cook said of his House Resolution 2001.

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Hobbs cited Cook's bill in her State of the State speech, urging lawmakers to follow that lead.

Rep. Matt Gress, R-Republican, has filed identical legislation that would allow for a vote. And Rep. Jennifer Pawlik, D-Chandler, said she is putting the finishing touches on her own plan to address the expenditure limit.

Teresa Martinez, the House minority whip, said the expenditure limit is an issue that can bring Republicans and Democrats together. She suggested the GOP reticence to immediately jump on the issue is due to Hobbs' tone. The governor urged lawmakers to act quickly, noting Democrats are ready to go.

"It would be helpful if she gave us the benefit of the doubt instead of demanding (a vote)," Martinez said.

Reach the reporter at maryjo.pitzl@arizonarepublic.com and follow her on Twitter @maryjpitzl. Reporter Stacey Barchenger contributed to this story.

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This article originally appeared on Arizona Republic: GOP: Arizona school spending limit will get lifted; distrust remains