Ducey school wait-list plan has money but scant details

• This month%2C the Legislature handed Gov. Doug Ducey %2424 million to fund the wait lists at high-performing schools.
• Lawmakers approved the %2424 million with the stipulation that no money be spent until Ducey%27s office submits a plan to the Joint Legislative Budget Committee.
• Ducey%27s office says it%27s still working on the plan%27s details.

This month, the Legislature handed Gov. Doug Ducey $24 million to help fund the expansion of high-performing schools that are struggling to meet demand.

The money — intended to fund the "wait lists" Ducey talked about during his campaign — came with few strings, other than it be used to help schools in a yet-to-be-established "public-school achievement district" expand.

There was no criteria for how the money would be allocated, or information on who qualifies for the new district, or when — or how — the money would flow. It also wasn't clear if the money applied to charter schools only, as many suspected, or would include district schools as well.

The lack of specifics has fueled speculation about the plan and raised questions about whether the Legislature, which is tasked with allocating funds, is too trusting of the new Republican governor.

"They don't think they need legislation," Sen. Kelli Ward, R-Lake Havasu City, said of Ducey's staff.

Ward, chairwoman of the Senate Education Committee and a budget hawk, shrugged when asked if she disagrees, saying she's taking a wait-and-see approach.

So are many others, as Ducey's staff works on one of his key educational initiatives. His office says they are still working on details and likely will reveal those after the Legislature ends its session.

Lawmakers approved the $24 million with the stipulation that no money be spent until Ducey's office submits a plan to the Joint Legislative Budget Committee, a bipartisan committee that meets periodically to review state spending. The committee's approval is not needed. The money could be used to guarantee loans or bonds.

Absent more detail, some lawmakers are filling in the blanks.

"It's a violation of the gift clause," said Sen. Steve Farley, D-Tucson. He says using state money to back up construction loans would violate the state Constitution, which bans loaning money, or the state's credit, to "any individual, association, or corporation."

"Based on what he has said in past public statements, I can't imagine how this can be anything but unconstitutional," Farley said, referring to Ducey's oft-repeated talk of "funding the wait lists" at excelling schools.

Others aren't as definite on the plan's constitutionality, but are concerned about the prospect of using state assets to help private charter-school operators. (The state has paid for public-school district construction, although that funding has been minimal in recent years.)

Senate President Andy Biggs, R-Gilbert, said he is "uncomfortable" with the idea.

"I have struggled with using government to back private bonds," Biggs said. While he applauded the governor for "thinking big" about how to improve educational performance, he said Ducey's plan needs detail before he's comfortable with how the $24 million will be used.

Attorney Tim Hogan, who has successfully sued the state over education policies, said it's impossible to evaluate the constitutionality of Ducey's plan because there isn't a plan.

"Have you seen the plan? Is something written?" asked Hogan, who works for the Arizona Center for Law in the Public Interest.

He, like other onlookers, has lots of questions but few answers.

Would the $24 million be used to secure debt incurred by private charter-school operators? Or would the state just hand out money for construction? How does Ducey's proposal to put what he calls "400,000 empty seats" in classrooms fit into the plan, if at all?

School supporters, from district and charter schools, say the $24 million could help back revenue bonds. That would give charter operators lower interest rates than they could get on the private market or even through local industrial-development authorities, which have provided funding for charter schools in Arizona.

Others wonder if the plan would also extend to publicly run district schools, since the wait-list crunch that Ducey has repeatedly referred to is not unique to charters.

House Appropriations Chairman Justin Olson, R-Mesa, said he's comfortable with the framework lawmakers approved and doesn't feel he's ceded legislative authority to the executive branch.

Any release of the $24 million would need legislative review, he said, so there's a check and balance in the program.

Likewise, Rep. Eddie Farnsworth, R-Gilbert, said he is willing to wait for the governor to formulate details, even if the Legislature has to return in a special session to authorize it.

"It's the governor's plan: He's going to have to come up with it," Farnsworth said.

Farnsworth, president of the for-profit Benjamin Franklin Charter School with four locations in the Valley, said he's not looking for any benefit from Ducey's plan.

Other charter operators, however, see promise in the idea.

"We're eager to see it," said Rhonda Cagle, senior vice president of communications for Imagine Schools, a charter operator that enrolls 8,300 Arizona students.

The charter group works primarily in areas where students qualify for the federal free and reduced-price lunch programs. And Ducey's budget stipulates that half of the money spent by the Access Our Best Schools Fund will go to projects in low-income areas.

The concept of state-backed aid extending to charter schools is nothing new, said Eileen Sigmund, president of the Arizona Charter School Association. It's already done in various ways in Colorado, Texas and Utah, she said, but it can get complicated.

"We support the concept," Sigmund said. "Right now all we have is what we heard during the State of the State," a reference to Ducey's speech, delivered in January.

Funding the wait lists

Here are the details thus far on Gov. Doug Ducey's plan to "fund the wait lists" at high-performing schools. The language is from the budget lawmakers approved March 7:

"The monies appropriated in the Access Our Best Public Schools funding line item shall be deposited in the Access Our Best Public Schools Fund established by section 15‑2042, Arizona Revised Statutes.

"Monies in the fund shall not be expended until the executive branch submits an expenditure plan to the joint legislative budget committee for review.

"Monies in the Access Our Best Public Schools Fund are appropriated for the purpose of developing mechanisms that an Arizona public school achievement district could use to assist in the expansion of member schools or the construction of new facilities for member schools, including mechanisms for the state to act as the guarantor for debt financing for member schools.

"The executive branch shall recommend proposed legislation to codify the mechanisms developed."

— Senate Bill 1469/House Bill 2671