The High Cost of Education Reform

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Since Symington took office, the state has failed to fund school districts for more than 8 percent of inflation costs.

During that time, of course, the price of education hasn't gone down. The textbook that cost $21.13 in 1991 is now $31.60. Paper costs 18 percent more. Pencils went up another 15 percent. Teachers' salaries have risen 8 percent.

And students with special needs continue to be very expensive. Special education--the program that deals with disabled students--is underfunded by at least $40 million, according to a state Department of Education study.

Children with limited English skills are becoming an ever-larger portion of Arizona's school population, now making up 15 percent of all students. They are at greatest risk to become dropouts. Right now, educating a child with limited English abilities costs about $334 more each year than school districts receive from outside funding sources.

As bleak as the picture has looked, the next few years offer little prospect of improvement. State budget projections say school districts should expect little, if any, increase in funding through 1997. On top of that virtual freeze in state funding, limited-English and other school programs are targeted for federal budget cuts next year--and perhaps every year, until the federal government balances its budget.

At the state level, the Republican view of this funding squeeze is broad and theoretical.

State Senator John Huppenthal, a Republican who chairs the Senate Education Committee, uses supply-side-economics theory to explain why budget cuts will actually be good for education. In his view, those cuts will make for a healthier economy, which will increase tax revenue, so more money can be invested in education.

"I look forward to the cuts," Huppenthal says. "The payoff could be pretty big in terms of being able to pump money into education."

But schools have yet to enjoy the fruits of three years of robust economic expansion in Arizona. Over that time, school districts have begged and borrowed from their regular education programs to make up state funding shortfalls.

The effect of Symington's policies on day-to-day education has been dramatic:

Arizona ranks 46th among the 50 states in education spending. Four years ago, the state ranked 39th.

Arizona has the fifth-highest ratio of students to teachers in the nation.
In the past four years, Arizona has dropped from 24th to 28th nationally in teacher pay. A beginning teacher is paid just $22,000 a year.

Conservatives argue that it's not prudent to put more money into an educational system that's broken. Before throwing more money at school districts, they want to see improved academic achievement.

That approach may sound pragmatic. But in Arizona, there has been no payoff, even when schools have improved.

"We've cut the budget, we've trained our staff, we've put computers in the classroom, and our test scores are the highest in the Valley," says Cheryl Crates, an assistant superintendent in the Madison Elementary School District in north central Phoenix. "I've done what you [state government] told me to do, so where's the check?"

Governor Symington and the Republican leaders in the Legislature want their constituents to believe that stripped-down public education in Arizona is doing more with less.

Exactly the opposite is true. Unless you own a large business, you are probably paying higher taxes for a degraded educational product.

Schools depend on local property taxes for the lion's share of their budgets. While state funding tightened over the past five years, school districts have looked to property-tax payers to make up at least some of the shortfall.

In the name of supply-side economics, however, the state Legislature, with loud support from Governor Symington, has embarked on a series of tax-cutting moves--mostly aimed at business--that directly affect the ability of school districts to raise revenue through property taxes.

The tale of the Scottsdale Princess resort illuminates how arcane, seemingly uncontroversial tax "reform" has pushed Arizona's school districts to their financial limits.

In 1986, the state instituted a tax on private property located on nontaxable government land--such as land leased from the City of Scottsdale by the Princess hotel, a tony resort.

The tax was a response to cities' increasing use of free or low-cost government property as an incentive for business expansion or relocation. But the tax didn't apply to businesses already operating on government-owned land.

In 1993, the Scottsdale Princess sued the state and Maricopa County, arguing it was being taxed unfairly. The court agreed.

Instead of applying the tax across the board, the Legislature repealed what is known, in government-speak, as the possessory interest tax.

Once the tax was abolished, a legislative committee was formed to study whether and how businesses located on government land should be taxed. In the meantime, however, those businesses stopped paying property tax--probably forever.

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Lisa Davis