Arizona lawmakers eyes impact aid funds, rez schools cry foul

 

With a $2 billion deficit still gaping at them, Arizona legislators are sniffing for cash anywhere they can find it.

But a measure passed last year to cut state funding to school districts that have cash on hand at the end of the present fiscal year has reservation school districts crying foul.

The reason is that reservation schools get a big chunk of their budgets from impact aid - federal payments in lieu of taxes.

While most school districts can ask voters for a property tax increase when they need more funding, schools on Indian reservations, military installations and other federal land can't do that because federal land is tax-exempt.

"Basically, we have one taxpayer and it's the federal government," explained Larry Wallen, superintendent of Piñon Unified School District.

Elaborated Quincy Natay, business manager for Chinle Unified School District, "The federal government said, 'OK guys, we took all your land off the rolls, so here's some cash to make up for it.'"

The way reservation school districts budget impact aid funds is a little different from the way off-rez schools budget property tax dollars. Like other Arizona school districts, the reservation schools are subject to budget caps, even though they might get more money than some schools that rely on property taxes.

So reservation school districts are allowed to carry over impact aid funds and save them up for major projects like, for instance, Chinle's Wildcat Den.

The result, explained Wallen, is that most savvy superintendents on the rez are going to have plenty of cash on hand at the end of any given fiscal year.

Which does not, he believes, give the state the right to make a grab for it.

"The question," Natay said, "is are those impact aid funds or are they state funds? We say they're impact aid funds."

"But once they all go into the budget pot," Wallen added, "It's impossible to say 'This is a federal dollar and this is a state dollar.'"

The fact remains that if the state pulls back one month of funding - which is what it's proposing to do to its more flush districts - the district loses the same amount whether you call it state or federal.

In Piñon, which received nearly $7 million in impact aid this fiscal year, the carryover funds have gone to buses, re-roofing buildings, an updated heating and cooling system, and lime slurry to protect the pavement.

Chinle, the state's biggest recipient of impact aid at $20.6 million, saved up its carryover funds for years to build the Wildcat Den and Aquatic Center.

That's why members of the Arizona State Impact Aid Association (colloquially known as "Asia") are in Phoenix this week asking legislators to balance the budget on someone else's back.

"I really think that even here in Arizona, the state that receives the most impact aid, most people don't understand impact aid," Natay said. "It's up to us to educate them."

One person who will not need educating is state Sen. Albert Hale, D-St. Michaels, who grew up on the reservation and knows a little about the importance of impact aid. Hale successfully tacked an amendment onto another bill that will allow schools to account separately for state and federal funds - in effect proving which dollars are federal and off-limits to the state.

"It will at least keep the state from sweeping those funds," Hale said in a telephone interview shortly after the bill passed out of the education committee Wednesday.

When they're done with the legislators, ASIAA members including Wallen and Natay will travel to Washington to meet their umbrella group, the National Association of Federally Impacted Schools.

Each state delegation will then visit its congressional representatives to impress upon them the importance of impact aid. They're not allowed to lobby, per se, only "educate," Wallen explained. It's a fine line.

"It's something we have to do every year," he explained. "We say, 'Hey, remember us? We still need that money. Here's what we're doing with it.'"

Natay said the group expects impact aid levels to be maintained this year - President Obama has already come out in favor of that - or even increased slightly.

It's a good time to ask for more money, explained Wallen, because of America's recently beefed-up military.

"We've got about 30,000 more kids coming into schools on military bases, so we can make a good case that we need more than last year," he explained.

With or without impact aid, however, there's a good chance the state will cut its funding to Arizona's schools, Natay said.

"What they're talking about now is eliminating full-day kindergarten," he said. "That would have a big impact on our district, so that's another thing we're going to be watching very closely."

Over the years, however, Natay has learned that you don't really know what the fallout will be until the dust settles on the legislative session.

"While they're on the floor, anything can happen," he said.

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