Arizona voters may get the final word on a controversial provision in the state budget that doubles the bonding capacity of school districts around the state, opening the door for higher property taxes.
Wesley Harris said lawmakers are not living up to their constitutional obligation to provide adequate funds for construction of new schools and making repairs on existing ones. So rather than come up with the cash, Harris said legislators have decided to dump the obligation onto local taxpayers.
To do that, he said, they voted to allow unified school districts to borrow up to 20 percent of the total assessed value of all property within the district, twice as much as now allowed. The same legislation also doubles bonding capacity of elementary and high school districts to 10 percent.
The referendum seeks to overturn that.
Backers have to file 86,405 valid signatures before Sept. 12 to put the issue on the 2014 ballot. Harris, founder of the Original North Phoenix Tea Party, said he believes there are enough people upset with what he sees as an inevitable increase in school taxes to get the necessary signatures.
Rep. Eric Meyer, D-Paradise Valley, conceded that Harris is correct in his basic assessment.
"The state isn't funding its obligations,'' he said. But Meyer, who voted to increase bonding capacity, said there were really no other options since there were not the votes to provide the necessary state dollars for new construction and repairs.
"We did the best we could, given the circumstances we find ourselves in,'' he said.
Harris, however, said the move amounts to a political cop-out by legislators.
"They're saying, 'We're not going to fund it, you go somewhere else,' '' Harris said of legislation.
He said that allows lawmakers to boast that they did not raise taxes. But what it does, Harris said, is force local school boards to be the ones to have to ask voters to hike taxes to pay off the new borrowing.
"So they kick the can down to the school board and then the school board becomes the bad guy as far as the taxpayers are concerned,'' he said.
Harris has an unlikely ally, but not in his bid to overturn the law. Tim Hogan, attorney for the Arizona Center for Law in the Public Interest, said the bonding capacity increase is designed to paper over the failure of the Legislature to properly fund public schools.
But Hogan said this is more than a question of politics.
He contends it violates the Arizona Constitution. And he is prepared a lawsuit to ask courts to force lawmakers to meet their legal obligations.
Hogan has been down this path before.
Two decades ago, each school district was responsible for building its own schools and keeping them in repair.
But the ability of each district to raise money was based on the value of all the property located there. That created a situation where some districts could afford domed stadiums while others had crumbling plaster.
In 1994 Hogan got the Arizona Supreme Court to rule that dependence on local resources violates the constitutional requirement for the state to finance a "general and uniform'' school system. And the justices said while nothing requires each district to have equal funding, it was the responsibility of the state to provide enough money for schools that are "adequate.''
Lawmakers ultimately came up with a program called Students First, making the state responsible for new school construction and "building renewal,'' essentially the cash for major repairs.
Only thing is, lawmakers have not funded the renewal formula since the 2008-09 school year. And this year they did more than ignore the formula: They voted to repeal it outright.
There is some money for repairs in the budget for the new budget year that begins July 1.
But it is set up as grants -- not guaranteed dollars -- forcing schools to compete for the limited funds. Hogan said he believes a court will ultimately conclude that the state is once again in violation of its constitutional obligations.
He's not the only one who thinks lawmakers have not lived up to their end of the deal.
"It is black and white dishonest what we've done in the last 10 years,'' said Sen. Rich Crandall, R-Mesa. In fact, he said the Legislature never adequately provided funds for building renewal "even in the good years.''
But Crandall, like Meyer, voted for the bond capacity increase, saying lawmakers needed to do something to ensure that local districts had some way of getting the money they need.
Chuck Essigs, lobbyist for the Arizona Association of School Business Officials, said his group backs the increase.
He said it most immediately deals with the problem created when the housing bubble burst.
Property values plummeted. Essigs said that left some districts with bonds that were authorized by voters -- bonds they could no longer sell because the declining property values also reduced the bonding capacity, tied to total assessed value of each district.
Crandall said close to a quarter of the more than 200 school districts are in that situation.
Harris said the logic of the legislative solution escapes him.
"When the rest of us have no money and our homes have been devalued, we need to give government the ability to tax more?'' he said.
"If that isn't a statement of insanity, I don't know what is,'' Harris continued. "But I can see how some perverted politicians will justify an unjustifiable act by something that's totally ridiculous.''
But Sam Polito, who lobbies for various Southern Arizona school districts, said the situation came down to a question of how to deal with problem created when lawmakers stopped funding building repairs.
"The problem was the state was not fulfilling its obligation,'' he said. Polito said his hope is that lawmakers will once again come up with the dollars, start providing the necessary fund, at which point each district's bonding limits could be lowered again.
Harris acknowledged part of what's behind the referendum is his opposition in general to property taxes -- the very taxes that repay bonds. He said it's not fair to fund government based on the value of what people own.