What?

by David Safier

Cutman_hatchet
It sounds like we're going to get some news soon about a budget deal between the Rs in the legislature and the Guv. One of their plans is simply stunning.

The Legislature is expected to take action today on a fast-track bill to strip another $300 million from school districts — potentially forcing schools in Pima County and statewide to borrow money or raise taxes to pay their bills.

The plan would halt almost all of this month's scheduled payment of state aid for schools. Instead, schools would be told to either use cash on hand or, if necessary, borrow money to meet expenses.

That's the set-up, not the stunner. It's an accounting move to delay payments — a rollover, where you make the payment later. The short term problem for districts is, if they don't have cash balances, they'll have to borrow to meet expenses. When I think "borrow," I think "interest," which means districts will end up with even less of what they don't have enough of already.

I suppose they'll be able to find better short term rates than they'd get at the corner Payday Lender. That's some consolation.

This is the stunner. Let's say a district has maintained a cash balance, meaning it won't have to borrow to meet current expenses. Then it will never see that rollover payment.

The twist in this case is there is no plan to reimburse most of the districts after the new budget year starts on July 1. Those found to have what lawmakers consider "excess" cash in their accounts will not get repaid.

Excess cash? So if a district decided to squeeze its budget early to ease next year's budget pain, it's too bad, Charlie. It will never see that money again. And if it's put away money against later payments — a standard procedure — it might not see that money again either.

This is a new wrinkle on the earlier, much maligned plan to take back all those "excess funds" the districts are supposedly hoarding, then redistribute them to other districts.

Did I just say "redistribute"? Where are McCain and Joe the Plumber when you need them?

Cutman, aka Russell Pearce, can always be counted on to give us the money quote at a time like this:

"It's taxpayer dollars,'' [Pearce] said of the money being taken. "If that's what we need to do to avoid additional cuts to education, that's what the taxpayers can expect.''

We're avoiding cuts by taking away districts' money, then giving it back to them and calling it new funds. I guess that's what passes for logic in these strange budget cutting days.

The most likely result of all these gimmicks will be increased local taxes in one form or another to replace the dollars the state is taking away. In other words, the state just pushes the funding problems downhill to the locals. Great.

0 responses to “What?

  1. The Republicans claim the districts are holding on to more money than they are allowed to save. ATRA has issued some reports on the that Pearce, et al. , have been citing. Does anyone know if districts have responded to this claim?

    It is truly stunning to think that they are going to take money that they claim has been illegally collected from taxpayers and then use it to pay the state budget. How is that right? Oh, I forgot, the number one priority is no tax increases no matter what.