Aug 8, 2022 - Politics

Possible budget fight looms over Arizona school year

Illustration of a dollar made out of chalk on a chalkboard being erased

Illustration: Sarah Grillo/Axios

Arizona schools got a big budget increase this year, but that doesn't mean they'll actually get to spend all their new money.

Catch up fast: Voters in 1980 enacted an aggregate expenditure limit (AEL) that created a formulaic cap on the total amount of money that K-12 schools can spend each year, regardless of how much funding has actually been budgeted.

  • Lawmakers can permit school districts to exceed that limit in any given year with a two-thirds vote in each legislative chamber.
  • School districts narrowly avoided budget cuts earlier this year when lawmakers suspended the limit following a months-long fight.

What we're watching: School spending this year is again expected to exceed the AEL, which the Arizona Department of Revenue calculated to be $6.4 billion.

  • Total school spending for the current fiscal year won't be known until this fall, but Arizona School Boards Association lobbyist Chris Kotterman tells Axios Phoenix that he expects budgeted expenditures to go over the limit by $2 billion.

Of note: School districts set their budgets based on the amount of money the legislature has allocated to them, so if they're unable to spend some of that money because lawmakers won't suspend the AEL, they'll have to make cutbacks late in the academic year.

The intrigue: You might think it's a given that legislators would allow schools to spend the money they've already budgeted, but there are factors that could complicate things.

  • The budget for fiscal year 2023 was a bipartisan compromise instead of the strictly GOP affair that most budgets are, so Republican lawmakers who opposed it may not feel compelled to approve a one-time exemption to the AEL.
  • Some new Republican lawmakers who weren't around last session could also decide to oppose an exemption as a way of holding the line against a budget that some conservatives believe spent too much.

Much will depend on the composition of the legislature after the November election.

Meanwhile: Kotterman is holding out hope that voters will get an opportunity to amend or even abolish the AEL.

  • Lawmakers could place the issue on the November 2024 ballot or even schedule a special election sometime before then.
  • K-12 advocates could also collect enough signatures to put the issue on the ballot in two years.

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