House bill HCR2039, which passed in the Senate on Monday, increases the K-12 aggregate expenditure limit by over 1.1 billion dollars.
The aggregate expenditure limit was placed in the AZ constitution in an effort to force some discipline on the part of school officials for whom there is never enough funding and/or spending, regardless of how much funding is increased.
The constitutional limit, which may be found in Article 9, Section 21, includes two common sense automatic increases. The limit may be adjusted according to both student enrollment and inflation. It also allows for a 10% automatic increase, apparently to accommodate errors in calculations, which always seem to result in higher expenditure demands.
The same part of the AZ constitution (Article 9, Section 21) contains a very extensive list of expenditures that are exempt from the limit. This means that there is no good reason to exceed the limit except under the most severe of emergencies.
However, this year, when schools are flush with money from all sources, including covid bucks and other federal subsidies, they are claiming that they must have a limit increase or else will have to have serious cuts.
It is against this background that house bill HCR2039 was introduced.
Unfortunately, the members of the legislature did not give citizens the courtesy of the customary committee hearings or an opportunity to express their views. They did this by suspending the rules and railroading the HCR2039 in both chambers.
Since this bill passed both chambers with the required 2/3 majority, it may go into effect immediately. There appears to be no provision in the AZ constitution about requiring the governor to sign the bill or for the customary 90 day waiting period.
Most observers will agree that the enactment of HCR2039 will affect the AZ supreme court ruling on the constitutionality of proposition 208.
When the supreme court ruled Proposition 208 unconstitutional and reverted it to a lower court, it stated that the reason for the ruling was that Proposition 208 exceeded the constitutional aggregate expenditure limit. It makes sense to conclude that if that limit is increased by 1.1 billion dollars, then the ruling would no longer be applicable.
If that is the case, Arizona is in for some dire straits because the provisions of Proposition 208, if enacted, will place Arizona’s income tax among the highest in the nation. This of course will have serious negative consequences for our economy.