| Tucson Unified School District | $16,700,000 |
| Maricopa Unified School District | $3,677,000 |
| Phoenix Union School District | $720,000 |
| Roosevelt School District | $439,000 |
| Isaac Elementary School District | $226,000 |
| Cartwright School District | $155,000 |
| Phoenix Elementary School District | $95,000 |
| Wilson Elementary School District | $1,869 |
| TOTAL | $22,013,869 |
On Tuesday, the Arizona Senate Appropriations Committee will consider SB1174, which if passed, would require desegregation dollars to be voter-approved. The bill is the latest effort by sponsor Sen. Debbie Lesko to reign in the abuse of desegregation monies.
While the public is most familiar with the abuse of desegregation funds by the Tucson Unified School District, it is the abuse of monies association with Office of Civil Rights settlements that have concerned most education activist and tax hawks.
For example, in 2015, the Arizona Auditor General conducted a performance audit of the Maricopa Unified School District including its desegregation spending. The District taxed for, and spent $1.3 million for activities that it classified as desegregation activities.
According to the audit, the “District could not demonstrate that the monies addressed its violation because it did not have any documentation related to the desegregation case, and district officials could not explain the purpose or goals of its desegregation spending.” In other words, it had no idea why it was collecting desegregation dollars.
The audit reads in part:
OCR cases originate from a complaint alleging discrimination in programs that receive federal monies from the U.S. Department of Education. If the OCR investigates the allegation and determines that a violation occurred, the OCR works with the school district to negotiate a voluntary administrative agreement that describes the specific actions that the district will undertake to address the violation.
In fiscal year 2012, the District increased its budget and spent approximately $1.3 million, or $239 per student, for activities that it classified as desegregation activities. Most of this additional spending was used to pay a portion of the salaries and benefits of approximately 25 teachers. However, the District did not have any documentation related to its desegregation case, such as the original complaint and related administrative agreement explaining the violation that resulted in the need for the desegregation spending and the specific actions the District agreed to take. Because district officials did not know what violation the program was to address it could not explain how the District’s desegregation spending addressed the violation or whether the program was successful at addressing the violation.
According to the Senate Fact Sheet, SB1174 “Allows a school district that was previously authorized to budget for expenses that were exempt from the revenue control limit (RCL) due to a previous court order of desegregation or Office of Civil Rights (OCR) administrative agreement, beginning in FY 2020, to request an additional budget increase.”
TUSD Governing Board president, Michael Hicks stated, “For years the District has fought desegregation. Because of this, a Special Master was assigned to oversee desegregation efforts. The Special Master has ordered layers of administrators that I feel do little to nothing to serve the kids in our classrooms. It is my hope that under new leadership the District will rapidly move towards unitary status. With that said, we will still require desegregation money in order to maintain high quality classrooms for all of our students, and avoid resegregation. If we do what we’re supposed to do, we will be ready in 2020 for a change. Hopefully by 2020, the voters will have enough faith in our efforts to approve desegregation funding. Still I’m not sure this bill is the ideal solution.”
Long-time education activist and educator, Rich Kronberg stated, “I don’t think this is a good bill. The point we all have trouble is the way TUSD uses its desegregation money for anything it wants. If the voters who live within TUSD had a real stake in how that money is used I would say it is a great bill, but after so many years of abusing the money they get TUSD has pushed out so many families into other districts or charter schools there are thousands of voters who have no stake in TUSD and will almost surely vote down such an override even if the money was going to actually be spent in the classroom to help those kids who really need the help, i.e. by creating a serious bonus for great teachers who want to teach in schools that historically have had a great deal of trouble staffing positions. The legislature could appeal to the courts to do what the special master was supposed to do and ensure that TUSD spends its desegregation money only in ways that promote student learning. As written this is just a bill that would throw out the baby with the bathwater. It is debatable whether it would be enforceable if TUSD went to federal court. If I had my way the bill would say that any desegregation money is going to be used outside of TUSD classrooms that amount would have to be voter approved.”
The Senate Fact Sheet reads:
SB1174 – Background
Currently, 19 school districts in Arizona budget for costs resulting from a court order of desegregation, which applies only to Phoenix Union and Tucson Unified (TUSD), or an ongoing or resolved OCR administrative agreement, which applies to other school districts. Arizona statute allows a school district to budget and levy an additional property tax above and beyond the tax used for regular maintenance and operations for expenses incurred for any measures or activities designed to remediate alleged or proven racial discrimination. This budget authority is typically referred to as desegregation funding, although monies may be used to remediate any civil rights category violation.
Arizona school districts may budget for desegregation activities due to an OCR administrative agreement or consent decree if the expenses incurred for these activities were initiated before the termination of the court order or an OCR administrative agreement. School districts budgeting for an OCR administrative agreement or consent decree costs must: 1) prepare and employ a separate maintenance and operation and capital outlay desegregation budget; 2) utilize a budget format that allows the school district to detail all of the expenditures resulting from any program implementation required by a consent decree or an OCR administrative agreement in their annual financial report; and 3) annually collect and report program activity data related to the consent decree or an OCR administrative agreement to the Arizona Department of Education (ADE). The ADE must compile and submit a report to the Governor and the Legislature that includes an annual financial report regarding desegregation activities, the programmatic and per pupil costs for desegregation activities, a summary of the results of desegregation activities, a summary of all relevant court filings, pleadings and correspondence and the actions taken to achieve equitable status.
Finally, school districts must ensure that desegregation expenses are educationally justifiable, result in equal educational opportunities, promote systemic and organizational changes within the district, align with the Arizona Academic Standards, accomplish specific actions to remediate the violation and used in accordance with the plan the school district submits to ADE.
According to the Arizona Constitution, Article 9, Section 18, the total amount of taxes collected on residential property for primary tax purposes is not allowed to exceed one percent of the parcel’s limited property value. Through FY 2015, the combined primary property value taxes on a parcel of residential property that exceeded this limit was reduced through a commensurate increase in additional state aid to schools. The 19 affected school districts continue to budget for $211 million in desegregation expenses. This amount is funded with local primary property taxes, except that the state is essentially paying the following amounts because of the following school districts levying in excess of the “1% cap.”
Provisions
Special Override Election
1. Allows a school district that was previously authorized to budget for expenses that were exempt from the RCL due to a previous court order of desegregation or OCR administrative agreement, beginning in FY 2020, to request and authorize an additional budget increase.
2. Limits the maximum amount of the budget increase request to the amount budgeted by the school district for desegregation expenses in FY 2009. The approved amount is in addition to any regular override.
3. Requires a school district governing board to order the special override election and to contain the same information report as regular override elections, including:
a) the year of the original federal court order or administrative agreement that allows the school district to budget for desegregation expenses; and
b) a summary of information also required for regular override elections (A.R.S. § 15-481) and the school district’s plan to remediate alleged or proven civil rights violations.
4. Requires the ballot to contain the words “desegregation/OCR tax, yes” and “desegregation/OCR tax, No”, if the proposed increase will be fully funded by a levy of taxes on the taxable property within the school district.
5. Requires the ballot to contain the amount of the proposed budget with the proposed tax compared to the alternate budget, a statement that the amount of the proposed tax will be based on a percentage of the school district’s RCL in future years, and the following statement:
“Any budget increase authorized by this election will be entirely funded by a levy of taxes on the taxable property within this school district for the year for which adopted and for ____ subsequent years, will not be realized from monies furnished by the state and is not subject to the limit on taxes specified in article ix, section 18, Constitution of Arizona.
Based on the current net assessed valuation used for secondary property tax purposes, funding the proposed increase in the school district’s budget would require an estimated tax rate of ___________ dollar per one hundred dollars of net assessed valuation used for secondary property tax purposes and is in addition to the school district’s tax rate that will be levied to fund the school district’s revenue control limit allowed by law.”
6. Requires the ballot to contain the words “budget increase, yes” and “budget increase, no”, if the proposed increase will be fully funded by revenues from other than a levy of taxes on the taxable property within the school district. That ballot shall also contain the amount of the proposed increase of the proposed budget compared to the alternate budget and the following statement:
“Any budget increase authorized by this election will be entirely funded by this school district with revenues from other than a levy of taxes on the taxable property within the school district for the year for which adopted and for ______ subsequent years and will not be realized from monies furnished by the state.”
7. Limits the maximum period of a special override to seven years.
8. Limits, in the second to last year of the original or renewed budget increase, the budget increase to two-thirds of the initial proposed percentage increase.
9. Limits, in the last year of the original or renewed budget increase, the budget increase to one third of the initial proposed percentage increase.
10. States that if the voters in the school district do not authorize the budget increase amount, the existing budget increase remains in effect for the time period for which it was authorized.
11. Requires that budgeted expenditures approved for special overrides shall be made in accordance with statutes relating to other overrides (A.R.S. § 15-910).
Reductions Beginning FY 2020
12. Limits a school district that has an existing or previous administrative agreement with the U.S. Department of Education OCR directed toward remediating alleged or proven racial discrimination or previously was subject to a court order of desegregation, beginning in FY 2020, to the amount approved by a special override election for desegregation expenses.
13. Allows any desegregation amount that is not approved at a special override election to be budgeted and annually reduced for five consecutive fiscal years by at least 15 percent beginning in FY 2020.
14. Prohibits a school district from budgeting for desegregation expenses outside the RCL that exceed the amount approved in a special override election after FY 2024.
Unitary Status
15. Prohibits a school district in unitary status, beginning in the second fiscal year following the declaration of unitary status, from exceeding any amount:
a) approved for desegregation expenses in a special override election;
b) over the hard cap legislated in 2009 not approved at a special override election; or
c) budgeted in the fiscal year before a declaration of unitary status and annually reduced for five consecutive fiscal years by at least 15 percent.
16. Prohibits a school district in unitary status from budgeting for desegregation expenses outside the RCL that exceed the amount approved in a special override election after five fiscal years.