DALLAS — A new Arizona law doubling the bonding capacity of local school districts is being challenged in a petition drive organized by members of the Original North Phoenix Tea Party.
The measure, which was passed during the budget special session by the 2013 Legislature and signed into law by Gov. Jan Brewer, increases the general obligation bonding capacity for unified school districts to 20% of total assessed property within the district from the current 10%. Capacity of common school districts, which operate only elementary or high schools, is raised to 10% from 5%.
The petition drive seeks to return the capacity limits to 10% and 5%.
Opponents of the increased capacity must obtain 86,405 valid signatures from registered voters by Sept. 12 to force a referendum next year on the increased bonding capacity.
Wesley Harris, who organized the Tea Party group and is heading the petition effort, said the Legislature increased the bonding capacity in lieu of adequately funding local districts' school construction and maintenance efforts.
State lawmakers can claim they did not raise taxes, Harris said, but that is because the local districts must issue and support school bonds.
Harris said the bond capacity bill was part of a budget compromise that surprised his colleagues.
"We had no idea that anything like this was in the works until it passed and the session ended," Harris said. "This gave us 90 days to do everything from filing with the secretary of state to printing the petitions to lining up volunteers to get signatures."
Many districts have authorized debt that they cannot issue because property values have plummeted since the bond referendums were approved.
An estimated $368 million of approved bonds cannot be issued by 21 capacity-capped districts, the Joint Legislative Budget Board said in its analysis of the bond capacity bill. Even with the increase, the analysis said, some of the districts will not be able to issue authorized debt as property values continue to lag.
School districts' bonding capacity was lowered by the Legislature in the late 1990s with the establishment of state programs to assist local districts with facility funding. The Arizona Constitution retains a provision allowing unified districts to bond up to 30% of their assessed valuation with a 15% limit on common districts.
Voters in Mesa last year approved $230 million of GO bonds for Maricopa Unified School District No. 4, but the district acknowledged it could only issue about half due to the capacity cap.
The district issued $46 million of the 2012 bonds in April, but said it would have to limit annual sales to the amount available under the cap.
Jeremy Calles, CFO at Maricopa County Elementary School District, said the higher capacity will allow the district in Kyrene to catch up with a growing enrollment.
The capacity cap has kept the district from issuing any of the $110 million of GO bonds approved by voters in 2010, he said.
"We're relieved that the state has recognized the dire need for capital funding and has passed the bond legislation," Calles said at a recent trustee meeting. "This legislation is critical since assessed values will continue to decline this August and many districts are unable to sell voter-authorized bonds."
Trustees of Maricopa County Unified School District No. 60 sent a hand-delivered letter to Gov. Jan Brewer in April to protest the limited bonding capacity. The Higley district cannot issue $50 million of a $71.5 million authorization from 2006 due to the limitations, the trustees said.
The 2012 Legislature passed a bill raising the capacities, but questions over its constitutionality kept any bonds from being issued under its provisions.
