PHOENIX -- Gov. Janet Napolitano vetoed two related bills Friday designed to restrict the ability of some school districts to increase their taxes.
One measure says the primary property tax rate cannot exceed $4.26 in elementary or high school districts and double that for unified school districts. But HB 2143 is written in a way to apply largely to districts located in counties with low property valuations.
"Imposing this type of cap on school district tax rates would involve an inappropriate intrusion on local government," the governor wrote. "Absent financial abuses or constitutional violations, school district governing boards should generally have the ability to set their own budget priorities, and be held accountable by the local populations whom they are elected to represent."
Rep. Steve Huffman, R-Tucson, said the legislation "didn't take away one penny." He said it simply prevented the districts from making the situation worse.
"Just because they can raise taxes doesn't mean they should," he said.
The other measure, HB 2498, would have frozen speeding on programs designed to comply with federal court orders or agreements with the U.S. Department of Education to eliminate segregation and its effects.
Napolitano said that is a flawed proposal, placing an artificial cap on spending by affected school districts "that entirely fails to account for student growth within those districts."
Huffman said affected districts could have asked the Legislature to have the state pick up excess costs. He said that would let lawmakers determine if the spending really is necessary to meet a district's legal obligations.
He also said the lack of hard caps on desegregation expenses financially rewards the districts that broke the law in the first place.
But Sam Polito, who lobbies on behalf of several Southern Arizona school districts, said the measure would have left the affected districts at the mercy of the political process at the Capitol. He said if lawmakers refused to provide the funds it is the students -- and not the administration -- that would be hurt.
Napolitano's vetoes are a relief for the more than two dozen school districts throughout the state which would have been affected.
At the heart of both issues are provisions in state law permitting school districts to impose tax rates higher than otherwise allowed.
One of those exceptions applies to school districts which have a history of discrimination. That can involve anything from concentrating minority students only in certain schools to practices that result in inadequate funding for students who need additional instruction in English.
But a 1980 constitutional provision designed to protect homeowners limits the combined primary tax levy to no more than $10 per $100 of assessed valuation. That includes not just the school tax but also what's imposed by the city, county and community college.
Businesses, however, have no such protection, which is why the Arizona Tax Research Association, which lobbies on behalf of many of the state's major corporations, fought for the change in law.
And what schools can't raise from their homeowners is paid by taxpayers from throughout the state.
That same situation exists in some other school districts which are not subject to desegregation orders. But they are property "poor" school districts, where the normal tax rate is insufficient to raise the money needed.
Napolitano said the limits proposed by lawmakers made no sense. "By capping the property tax rates that these districts can assess, the Legislature would have effectively eliminated their ability to better invest in education for their children," she wrote.
Napolitano also said it might be illegal because it would exacerbate the discrepancies in per-student spending among the high and low property wealth districts. That, she said, would run afoul of constitutional provisions requiring the state to maintain a "general and uniform system" of education funding.
She also said federal judges would not take kindly to the desegregation funding measure. "We should not be passing laws that will lead to even more litigation against the state and its school districts," Napolitano wrote.
School districts under either court orders or compliance agreements with the Office of Civil Rights to resolve desegregation issues that would have been affected by HB 2498:
Agua Fria Union
Window Rock Unified
*District does not levy an additional tax for desegregation expenses
-- Source: Arizona Department of Education
School districts that would be affected by HB 2143 setting a maximum tax rate:
Ash Creek Elementary
San Simon Unified
-- Source: Legislative research staff