Arizona’s per student education funding is among the lowest in the nation, ranked 45th among the 50 states in the “Education Week” rankings for 2018. For that reason, the Sedona-Oak Creek School District has relied on tax credits for additional contributions.

“It’s critical to us because the funds we get from the state are some of the lowest in the nation, so we have to rely on these types of things,” SOCSD Superintendent Dennis Dearden said.

Tax credit contributions are different from direct donations, because they allow state taxpayers to designate money that they already owe to the Arizona Department of Revenue to go directly to school funding. Without such a designation, tax payments go into the general fund where less than one cent comes back to the school.

Recently, some parents have become concerned because SOCSD’s tax credit contributions form changed, removing several categories. Before 2018, the form listed Sports, Fine Arts, Clubs, Student Field Trips and “Educational Enhancement,” e.g., funding for Advancement Placement classes.

It also allowed a “specification optional” selection. But that option was removed from the latest version of the application going into the 2018-19 school year. The change was recommended by an internal audit team, Director of Finance Heather Shaw-Burton said.

Nothing in state law required the change SOCSD made to its form.

“As superintendent, I am very adamant about doing the right things and making sure we’re credible with the public, so that’s why we have auditors,” Dearden said. “They give us advice. We listen to them.”

“[Arizona Revised Statute §43-1089.01] is very detailed [regarding] what you can spend tax credit money for and what you can’t,” Shaw-Burton said.

Each February we have to send reporting to the state of Arizona on how we spend those funds.” “In 2017-2018, when they [taxpayers] were able to select very specific activities, we collected fewer tax credit dollars than we did this past school year when there wasn’t the opportunity,” Assistant Superintendent Deanna Dewitt said.

Tax credit funds are still designated to the same categories but the “specification optional” line was removed.

Once earmarked, donations cannot be redirected to another category. For example, contributions specifically for a club must be used for that purpose.

“The Dungeons and Dragons Club did get donations,” Dewitt said. “There were people who were particularly interested in funding that club, so they made tax credit donations to that club. When the club went away, whether the sponsor left or students lost interest, the money still sat there, so it benefited nobody.”

“Unfortunately, now those dollars don’t help students because they’re tied up because they’ve been earmarked for something,” Dearden said.

“The audit showed the ‘specific’ line didn’t benefit all of our students,” Shaw-Burton said.

Smaller interests are taken into consideration when funding is allocated, Dewitt said.

“Those funds, because it is a larger general fund, there is more flexibility in making sure that all of our programs are successful,” Dewitt said.

“We also want them [taxpayers] to know that we are very credible and we are spending those dollars on what they want it to be spent for,” Dearden said. “The athletes, those teams are getting exactly what they want. I don’t think we’ve denied anybody of anything they asked for this year.”

“If a coach wants to purchase new uniforms for their team, they submit a requisition,” Shaw-Burton said. “When approved it creates a purchase order, so it goes through a lot of layers of finance, checks and balances.”

“Educational enhancements come to me first, so I’m that first-in-line,” Dewitt said. “If that is something that qualifies for tax credit funding … then I send it off to the Finance Department to be processed and paid. That’s the chain of how it works. There’s not one single person responsible for saying ‘yay’ or ‘nay’ on anything.”

Amid the discussion of tax credit contributions, Arizona Rep. Jeff Weninger [R-District 17] sponsored House Bill 2425 last year, which expands what schools can spend money on and allows districts to transfer funds between schools.

Tax credit funding expands eligible purchases to include furniture, books, playground equipment, instruction aids and other capital items. The changes under HB 2425 are effective now through June 30, 2022.

“The bill expands the items that the tax credit money can be spent on. Now districts can also purchase playground equipment, shade structures, health care supplies and contribute funds to community school meal programs,” Weninger stated in an email. “The bill also allows the site
council of a public school to transfer undesignated contributions to any school within the same district.

The problem has been that some schools have excess funds built up and couldn’t spend the money in the existing parameters.” “When we talk with those people who might have concerns about — ‘Well where does this money go?’

We share with them our interest of equity for all students and making sure that all students feel as if their interests matter just as much as their peers’,” Dewitt said.

“We’ve got to do a better job of communicating to everybody because we’re coming in new,” Dennis Dearden said. “We’ve got this vision and people are starting to support that.

“We’re making progress, but there are still big needs here and there’s always going to be here in Arizona.”

Don Eicher can be reached at 282-7795 ext 126 or by email at deicher@larsonnewspapers.com