Arizonans approve 77% of school bond, override elections
Arizona voters approved 77 percent of school bond and override elections on the 2018 midterm election ballot, said Randie Stein, director of the public finance team at Stifel Nicolaus in Phoenix.
Bonds and overrides are voter approved community support for schools generated by local property taxes. They are for a specific period of time and purpose.
But just 28 percent of Arizona’s students attend school in districts where the community reliably passes bond and override elections, said Dr. Anabel Aportela, research director for Arizona Association of School Business Officials and Arizona School Boards Association.
Infographic by Lisa Irish/AZEdNews
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Eight percent of students attend school districts that have not passed a bond or override election since 2011, and four percent of Arizona students attend schools that have made no attempt to pass a bond or override since then, according to a dashboard Aportela created using school district election results.
“As we continue to rely more and more on these local elections to pay for basic needs in school districts, I think it’s important to keep in mind that not everyone has access to these dollars,” Aportela said.
In this midterm election, all of the school district capital or district additional assistance overrides, 79 percent of maintenance and operations overrides and 58 percent of bonds passed, Stein said during a presentation at an Arizona Association of School Business Officials meeting on Wednesday.
But Stein cautioned that results are not final yet, because “there are still about 150,000 ballots statewide that are being counted. We don’t know where they are, but some of these school district elections could be that close and those things could change.”
Stein said she’s still watching for final results in Casa Grande Union, Crane Elementary, Humboldt Unified, Joseph City Unified, Mesa Unified, Nadaburg Unified, Tanque Verde Unified and Vail Unified.
Casa Grande Union High School District’s M&O override, Mesa Unified and Vail Unified’s bond have all gone from fail to pass in the last week as more ballots were tallied, Stein said.
“Humboldt Unified looks like it’s getting closer. Crane Elementary looks like it’s holding just fine,” Stein said. “Nadaburg actually seems to be trending away with less percentage of yes votes. Tanque Verde’s bond actually seems to be trending closer. The question is are there enough ballots to count to put them over the line there.”
Maintenance and operation overrides had an average year with just five of the 24 elections being new or increased overrides – the rest were continuations, Stein said.
“School districts that have maintenance and operation overrides are managing to keep them, but there’s not that many new districts that are getting access to maintenance and operation overrides,” Stein said.
There were a record number of capital override or district additional assistance override elections this year, Stein said.
“It was a record annual dollar amount over $25 million, and the pass rate has followed as it has for the past couple of years at 100 percent,” Stein said.
The district additional assistance override elections were concentrated mainly in Maricopa County with Crane Elementary’s in Yuma County being the exception, and most are going to be used for technology and student transportation, Stein said.
Bonds also had a record year, but “not in a good way, although not as bad as first thought. When we went to sleep on Tuesday night there were only five of those measures that had passed, not seven of them,” Stein said.
There were fewer bond elections this year, but a relatively large dollar ask amount, “which is consistent with what we’ve seen in the prior three years,” Stein said.
“This is the worst pass rate since Students FIRST implementation, and the worst amount approved since Students FIRST implementation,” Stein said.
Students FIRST (Fair and Immediate Resources for Students Today) is a capital finance program funded by appropriations from the state’s general fund that is administered by the Arizona School Facilities Board for building renewal, deficiencies or corrections and new school facilities.
“The pass rate is only 58% (7 of 12) whereas the approve rate – the dollar amount – is $529 million out of $815 million,” Stein said. “What that tells you is that some of the big ones passed.”
Right now, that includes large bond elections in Mesa, Flagstaff and Vail, Stein said.
Stein attributed the low pass rate to several things.
“There was a lot that happened in the legislature. There was a lot that happened at the ballot. There was a lot that happened around Red For Ed, and around education in the past several months. I think that there’s something there, but I’m not sure what it is,” Stein said. “I don’t know if the ESA measure was confusing. I don’t know if taking the income tax initiative off the ballot was confusing.”
Trends over time
Since Fiscal Year 2004, the number of bond and override elections has been decreasing, Aportela said showing the dashboard results.
“Even though the economy has recovered what we see is that there is not necessarily more districts going out for measures every year. There are actually fewer,” Aportela said.
Districts whose bond and override elections fail often “have to go back to their voters, so that might be part of the explanation that as we have higher success rates, higher pass rates, then you would see fewer districts going out and asking their voters,” Aportela said.
But Aportela said that the 38 districts with measures on the ballot in this most recent election make up just a small number of the more than 200 Arizona school districts.
While some districts like Avondale have had some measures that were approved and some that failed since 2004, other districts like Bullhead City haven’t had a school election since before 2003.
Another factor was the pass rate for ballot measures in and outside Maricopa County. From Fiscal 2004 to Fiscal 2018, school districts outside Maricopa County were less likely to put a bond measure on the ballot and were less likely to pass it, Aportela said. The same trend is seen in district additional assistance overrides.
During that time, 120 of the 133 bond measures on the ballot passed in Maricopa County, compared to 95 of the 116 bond measures on the ballot in other Arizona counties, Aportela said.
Yet, there are three times as many school districts outside Maricopa County than there are within Maricopa County, Aportela said.
The trend differs for maintenance and operation overrides, where 203 of the 274 measures in Maricopa County passed during that same time period, compared to 233 out of the 365 elections in other Arizona counties, Aportela said.
Yet, 85% to 86% of M&O override dollars are in Maricopa County which has 66% of all Arizona students, Aportela said.
A map of all school districts that passed a bond or override since 2011, shows many districts have not passed a ballot measure, Aportela said. Districts who have passed measures and the percentage of measures they have passed are in shades of blue, while those that have not passed measures are in shades of white.
“What I hear during the (legislative) session is that districts have on average of $600 per student in bond money,” Aportela said. “Well, no. There are 40 districts that have bond money. The rest of them don’t have any. It might average out, but that doesn’t mean that everyone has those dollars. Same with overrides and capital overrides,” Aportela said.
“Why does it matter? If you think about funding and all of the needs that districts have and why they go out for these, only less than a third – 28 percent of students – are in a district that can reliably pass one of these measures, meaning that since 2011, they’ve passed everything that they’ve gone out for,” Aportela said.
School districts need capital for five main areas – new construction, building renovation, technology, buses and district administration, Stein said.
“It’s not like maintenance and operation. You can’t do a per-pupil thing for all these items,” Stein said. “New construction – it doesn’t matter whether you’ve got 10 kids or a 100,000 kids – if you’ve got 100,000 new ones coming, you need a school. There’s no two ways about it. This is not a one-size fits all.”
For building renovation, the square footage, age of the building and previous upkeep matters, Stein said.
“This is relevant, because the state had underfunded education for so many years,” Stein said. “They let you transfer your capital into maintenance and operations and said ‘Do what you think is best.’”
That was a different decision for every school district – one might need more M&O to keep teachers, another might need capital for repairs but “per-pupil (funding) is just not going to cut it,” Stein said.
What are school districts’ funding options for these capital needs?
“Basically, what you’ve got is bonds and overrides, and that is why we continue to see year after year districts going to the voters,” Stein said. “There is such a substantial need out there that is just not being filled at a capital level by the state.”
Many districts need funds for renovation of existing facilities, for technology and equipment for student safety and transportation, Stein said. The adjacent chart shows the bonds that are passing in pink, the ones that are not in white, and the district additional assistance overrides that are passing in green.
“You can see lots of districts needing funds for renovation of existing facilities, for technology and equipment for student safety and transportation,” Stein said. “These are the biggest categories.”
“For new construction, the School Facilities Board although they’re out there and they’re available as a funding source, their funding is often later than what districts are looking for,” Stein said.
“With existing facilities, the School Facilities Board can be somewhat of a cumbersome process. The timing is also a little difficult with the SFB. Some districts are looking to be ahead and be a little bit proactive of repairing roofs and HVACs before they actually fail,” Stein said.
Schools have “needs for technology and the formula – no matter what formula you’re talking about – has just not contemplated computers and refreshing computers for students like school districts are using them now,” Stein said.
“School safety and security is obviously an issue that has come to the forefront, and it is highlighted as more and more important every year,” Stein said. “There’s almost no other way for school districts that have a substantial fleet of buses to be able to maintain them.”
Slideshow: Data from School Elections from 2003 through 2018