DALLAS - With state funds for school repairs frozen amid a severe budget crisis, Arizona school districts appear reluctant to use their own bond funds for maintenance projects.
At the Tolleson Elementary School District west of Phoenix, officials need about $153,000 to repair a sewer pipe at one of the schools. But while they have $80,000 provided by the Arizona School Facilities Board, officials do not want to add money from $22 million of authorized debt, even though it would be legal.
Voters approved the Tolleson bonds for athletic facilities and libraries, projects not funded by the state, superintendent Bill Christiansen said.
Under the formula for building comparable schools in districts of varying wealth, the Arizona School Facilities Board issues debt to cover the construction costs. The board also distributes funds for school repairs.
In May, as lawmakers struggled to cover a $1.2 billion budget shortfall, $86 million for repairs that districts had expected was frozen. State funds for new school construction also were put on hold.
Arizona established the repair fund in 1998 in the wake of a 1994 federal lawsuit on behalf of districts in poor districts with lower property values. The courts required Arizona to equalize funding across all 227 school districts.
In 2002, Arizona expanded its role in financing school facility needs through its Students FIRST capital program administered by the Arizona School Facilities Board.
The state School Facilities Board was authorized to distribute money from the state general fund for repairs, but lawmakers have appropriated the full amount for the repair account only once.
To build new schools, the SFB issues debt backed by revenue from land held in trust by the state.
In the Yuma Union High School District 70 in the western part of the state, the SFB built two schools in recent years, allowing the district to maintain a modest debt burden.
As a supplement to the SFB-funded projects, district voters approved $70 million in class B bonds in November 2005 to construct performing arts, athletic, and vocational educational facilities, as well as for renovation and remodeling projects.
The district this week issued the final $9.3 million of the authorization, which is expected to finance facility needs through fiscal year 2011. To handle growth, the SFB approved funding for construction of another high school to open in the fall of 2011, but the state freeze left those plans in limbo, according to Fitch Ratings analysts.
"Fitch will monitor the state's actions with regard to school funding and its impact on the school district's financial performance," analysts wrote. "Ongoing residential development throughout the district is producing tax base and population gains, and the subsequent enrollment increases continue to drive facility expansion needs."
