While the contests weren’t as significant as in other states , last Tuesday, Arizonans concluded a month of elections, which largely took place via absentee ballots.
The majority of races across the state, primarily in Maricopa County, were for bond approvals. Flagstaff voters made decisions on almost two dozen questions, while Tucson voters considered mayoral and city council selections.
Opponents of municipal bonds had a decent night of results. On the Arizona Republic’s Election Tracker page, twelve of forty-four of those questions appeared to be rejected by voters. Many of those results came in the west and east regions of Maricopa County.
In the lead-up to the election, both the Arizona Free Enterprise Club and the Arizona Tax Research Association (ATRA) shed light on the spending requests up for adjudication by the voters. ATRA wrote in September that the “$3.5 billion in bonds is easily the largest statewide K12 bond request in history.” The Arizona Free Enterprise Club added, “This level of borrowing being sought by local school districts is both unwise and unnecessary, especially given the large amounts of money that have been pumped into the system.”
Most of the bond questions were approved, however, with several of those results occurring in Glendale and Phoenix. Glendale had five successful bond outcomes and Phoenix had four.
Jeff Barton, the City of Phoenix’s Manager thanked his municipality’s voters for their positive support for the bonds, saying, “Thank you, Phoenix residents, for supporting the 2023 General Obligation Bond Program. Because of your support, we will be able to fund critical infrastructure and rehabilitation needs of both aging City facilities and areas of rapid growth, with new and enhanced parks, libraries, fire and police stations, affordable housing, street improvements and more.”
In 2024, Arizona voters will have higher-profile races to make determinations on, including a President of the United States, a U.S. Senator, and a bulging list of initiatives with critical implications for the future of the state. Although elections in even years have both mail-in and in-person components, most of the voting is still done via absentee opportunities, making the return of those ballots critical to candidates’ and propositions’ successes.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
K-12 schools in Arizona are currently flush with cash. Between billions in increased state spending from the legislature, COVID cash from the feds, and declining student populations, district school spending is at an all time high. But next week, voters across Arizona will decide the fate of 23 bond requests from schools that total a historic $3.5 billion.
This level of borrowing being sought by local school districts is both unwise and unnecessary, especially given the large amounts of money that have been pumped into the system. State funding has increased so quickly in the last 36 months that the legislature decided to override the constitutional spending limit the last two fiscal years. This is funding over and above the formulaic cap in the constitution that exists to protect taxpayers from runaway and unaccountable spending.
And contrary to what you probably hear from teachers’ unions and their sycophant friends in the media, lawmakers continue to increase school spending with every state budget. With all this new spending, district schools receive more money per student than ever before, and it’s not even close.
Not included in the state spending cap, however, are federal funds. And when schools were shut down during COVID, the federal government poured trillions of dollars into them. Many of the school districts asking their taxpayers to hand over hundreds of millions of dollars in bonds next week are still sitting on a pile of unspent COVID cash…
As Arizona’s largest public school district, Mesa Unified School District is a critical case study for the future of K-12 funding, particularly in a state that champions competition and choice for its families. Despite headlines boasting of population growth across the state, the nationwide decline in childbirths and cost-of-living increases will weigh heavily on district enrollment and balance sheets for years to come.
While solving these policy issues is admittedly outside the scope of superintendents and governing boards, how districts adjust to these changes remains within their control. In the case of Mesa USD, the district faces an existential crisis in enrollment that will almost certainly require consolidation and closure among its 78 schools over the next 10-20 years. Furthermore, the district’s statewide assessment performance leaves much to be desired, with just 38% and 31% of Mesa USD students achieving proficiency in English Language Arts and Math, respectively.
Next month, Mesa taxpayers will have an opportunity to make their voices heard and rein in the district’s spendthrift ways by rejecting a $500 million bond and an override continuation that, if passed, would allow the already overstretched district to exceed its revenue control limit by 15% for another seven years.
When voters last approved a bond for Mesa USD in 2018, they did so with a margin of <1% and at a cost of $300 million to taxpayers. A year later, the district was beset with allegations of financial impropriety and steep administrative costs, leading to the resignation of the district’s superintendent. The poor transparency on the part of the school board in communicating the issue to the public further underscores the lack of taxpayer accountability. Furthermore, over the last three years, Mesa USD received over $245 million in federal pandemic relief funds, with hundreds of millions still unspent.
Nevertheless, Mesa USD’s pitch to taxpayers remains unchanged, and approval of the bond and continuation of the override will result in little more than throwing away hundreds of millions of dollars in costly capital projects for underutilized campuses and unsustainable personnel costs.
Demography Is Destiny
In the early 2000s, Mesa boasted a population of over 400,000 residents. During the same period, Mesa USD reached its peak enrollment at over 87,000 students during the 2002-2003 school year. Today, the city is home to nearly 510,000 people, yet the city’s population growth over the last 20 years never trickled down to Mesa USD’s enrollment. Today, the district serves fewer students than it did in 1990 when Mesa had just 290,000 residents.
An additional cause for alarm comes from the pronounced decline in Mesa USD’s Kindergarten-6th grade enrollment. For large, comprehensive school districts like Mesa, enrollment in feeder schools is an important signal of a district’s future headcount. Over the last 20 years, 16 of Mesa USD’s elementary schools have lost over 40% of their students. In the same period, the district’s junior high schools saw an average decline of 50% of their enrollment.
Source: Mesa Public Schools – Demographics Report 2021-2022
As another signal of its unpopularity, Mesa USD is one of the state’s largest sources of ESA students, which has its most substantial adoption rates in the elementary grade levels. Given the expansion of ESAs and charter schools, Mesa USD will continue competing for a depleting student pool. In turn, a decline in enrollment necessitates a reduction in operational expenses, which Mesa USD has rebuffed in favor of taxpayer-funded bailouts.
Around 77% of school districts in Maricopa County have one or more overrides in effect. While East Valley voters have typically displayed enthusiasm for K-12 bonds and overrides in the past, the powerful impact of free market principles via ESAs makes the decision different today. With nearly 70,000 Arizona families using ESAs today, enthusiasm for the program has made it larger than any school district in the state, with the additional benefit of not requiring bonds or overrides.
To realize the substantial cost savings from ESAs, a corresponding change is required from public schools in rightsizing their districts by adjusting their property and personnel costs. In preparing for the inevitable, Mesa USD must take steps now to address under-capacity and explore the sale of its real estate before requesting additional funds from taxpayers. In rejecting this bond and override, Mesa voters sidestep a lousy deal and send a clear message about taxpayer accountability.
Arman Sidhu is a lifelong Arizona resident and previously worked in K-12 education as a principal and teacher. He currently leads a nonprofit microschool.
One Arizona leader is using her statewide office to support Israel at a time when that nation faces tremendous threats to its security.
Arizona State Treasurer Kimberly Yee recently announced that her office “plans to increase Israel bond holdings to support Israel during this time of crisis.” Yee’s press release shared that the State Treasurer’s Office “has been investing in Israel bonds since 2013 and currently has $15 million in holdings.”
Today I announced my commitment to increasing Arizona Treasury @IsraelBonds holdings in support of Israel. Arizona is a friend and ally of Israel, and it is imperative that we support them through our actions, not just our words.
— Arizona Treasurer Kimberly Yee (@AZTreasurerYee) October 16, 2023
Treasurer Yee issued a statement in conjunction with her announcement, saying, “In the wake of the distressing news of the horrific terrorist attacks in Israel, I promptly directed my investment team to contact our esteemed partners in Israel to increase our Israel bond holdings as we continue to stand firmly with Israel. The state of Arizona is a friend and ally of Israel, and it is imperative that we support them through our actions, and not just our words.”
Yee also took an opportunity to highlight the importance of her action and encourage her colleagues around the country to follow suit. She said, “Israel bonds are a secure and reliable investment option that not only contributes to the Arizona Treasury’s diversified investment portfolio, but also strengthens our support and partnership with the State of Israel. Investing in Israel bonds is something that I not only support, but also urge my fellow state financial officers to do as well, especially in this time of crisis. In this time of adversity, it is our duty to stand resolute and support Israel as a nation.”
The Treasurer’s Office noted that “Israel bonds serve as an investment option for individuals, institutions and nations worldwide to support the economic growth and stability of the State of Israel,” adding that “investments in Israeli bonds offer both reliable financial returns and contribute to Israel’s economic and strategic well-being.”
According to Yee’s office, “the Israeli government will be issuing new bonds and Arizona has been placed at the forefront of the list of institutional buyers.”
The second-term Republican Treasurer has been a staunch supporter of Israel throughout her time in public service, using her platform and her office to stand with the American ally to the full extent of her authority. During her first term, Yee led the efforts to become “the first state in the country to enforce Anti-BDS laws (Boycotts of Israel) by divesting $143 million from Unilever, the parent company of Ben & Jerry’s, in response to the company ending distribution of its products in parts of Israel.”
In 2022, Treasurer Yee also notified Morningstar Inc. that they were at risk of being placed on the Arizona Treasury’s prohibited investment list for violating Arizona law by actively boycotting the State of Israel. Yee said, “It is my duty to defend Arizona’s anti-BDS law and I will ensure that Arizona does not do business with companies that are attempting to undermine Israel’s economy.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
Amid the passage of historic school choice legislation in Arizona, the educational opportunities available to students and families today are unparalleled with the state’s universal ESA program. In addition to providing Arizona families with voice, choice, and agency in their child’s education, the ESA program has the potential to save Arizona taxpayers considerable funds from future school district bond and override measures.
However, to realize these savings, a long overdue conversation about rightsizing Arizona’s public schools is necessary. Despite significant population growth within Arizona, the enrollment forecasts for most school districts anticipate a period of long-term decline due to lower childbirths, affordability, and alternative options. This demonstrates a pressing need to review the budgets and assets of public school districts and align them with future enrollment projections.
Given the significant competition from the rise in homeschooling, as well as charter and private schools, public schools are no longer the only game in town. As a result, greater scrutiny from local taxpayers is needed in holding school districts fiscally accountable by questioning their need for additional funds through bonds and overrides.
What Are School Bonds & Overrides?
School bonds are loans that school districts sell to investors, who are repaid through the district’s future property taxes. These bond funds have specific limitations on their use and cannot be used to increase staff salaries. In most instances, these funds are leveraged for infrastructure projects involving the construction of new facilities or upgrades to existing ones. In contrast, overrides go directly to school districts and can be used for staff salaries and various programs outlined by the district requesting the override.
This November, a total of 23 school districts in Maricopa County will have bond and/or override measures on the ballot. Among these 23 districts, at least 4—Kyrene Elementary School District, Mesa Unified School District, Gilbert Unified School District, Scottsdale Unified School District—are in dire need of rightsizing before requesting additional funds from taxpayers based on their pronounced decline in enrollment.
In particular, Mesa USD, the state’s largest school district, enrolls fewer students today than it did in the fall of 1990. Yet, the district’s real estate portfolio somehow contains 78 schools, in addition to various non-instructional facilities and offices throughout the city. Mesa USD, as well as surrounding districts in similar positions, need to do right by taxpayers in exploring the sale of underutilized real estate before passing the buck to taxpayers.
As seen in the table below, only Gilbert USD has shown an increase in enrollment since the fall of 2000, and none of the districts can report an increase in enrollment in the last 10 years. Given the growth in ESA adoption and charter school enrollment, the pragmatic move is to respond to these declines now by rightsizing these districts, pursuing the sale of district assets, and removing administrative bloat.
Among the clearest signs of waste and inefficiency can be found in the amount of unspent federal pandemic relief funds provided to schools around the country. In the case of the 4 school districts requesting additional funds from taxpayers, they collectively still have access to tens of millions in unspent, flexible funds that are set to expire in a year.
What this experiment in “helicopter money” confirms is that the problem ailing local school districts is not a lack of funds, but rather their inability to direct funds efficiently. In the absence of a public monopoly, this decline in public school enrollment will continue to eat into taxpayers’ wallets with the additional forces of demographic shifts, affordability, and competition from the growing number of viable and efficient alternatives in the form of charter schools, private schools, microschools, and homeschool co-ops.
In adjusting to this historic era of school choice, the need for fiscal accountability remains essential on behalf of public school districts that have been reluctant to change and control their costs. To avoid perpetually funding buildings and bureaucracy, local taxpayers and residents must ensure their voices are heard.
Arman Sidhu is a lifelong Arizona resident and previously worked in K-12 education as a principal and teacher. He currently leads a nonprofit microschool.
