East Valley school districts already laying off staff and canceling programs now face millions of dollars in new cuts this year as the Legislature narrowly ordered them to roll back their spending on utility costs.
The effect of a bill adopted in a special budget session Monday will force school districts statewide to shift spending by an estimated $10 million through budgetreductions for an area called "excess utilities" that must be returned to their pre-2002 level.
Through a special formula, school districts are allowed to exceed their spending limits and raise property taxes to pay for new utility costs, including electricity, water, telephone and trash fees. Critics claim excess utilities have become a hidden budget override.
Last year, the Legislature set new limits that will remain in place until a 2009 deadline that eliminates excess utility costs altogether.
But several school districts used another section of state law to raise their excess utility budgets last year before the new limits went into effect, said Michael Hunter, vice president of the Arizona Tax Research Association. In just two years, the statewide total for excess utilities went from $59 million to an estimated $81.5 million.
"With excess utilities going up despite the Legislature’s efforts to cap it, you’re going to see school districts not just falling off the cliff but taking a flying leap off the cliff," Hunter said Monday.
Republican leaders said the plan adopted Monday sends a message to school districts.
"This bill is an effort towards responsibility and accountability," said House Speaker Jake Flake, R-Snowflake.
East Valley school districts will lose $4.89 million under the plan.
"If we can’t reduce our utility expenses by $1.9 million, we’ll have to cut $1.9 million from somewhere else in our budget," said Chuck Essigs, adviser to the superintendent in the Mesa Unified School District .
Gov. Janet Napolitano said she will not block the bill’s enactment because districts already have been on notice about the issue.