AI- 2373
.
Special / Executive Session Board of Supervisors Meeting
- Meeting Date:
- 05/19/2015
- Title:
- SB1476 -- Impact on County -- Possible Litigation
- Submitted By:
- Britt Hanson, County Attorney
- Department:
- County Attorney
Presentation:
No A/V Presentation
Recommendation:
Document Signatures:
# of ORIGINALS
Submitted for Signature:
Submitted for Signature:
NAME
of PRESENTER:
of PRESENTER:
Britt Hanson
TITLE
of PRESENTER:
of PRESENTER:
Chief Civil Deputy
Mandated Function?:
Source of Mandate
or Basis for Support?:
or Basis for Support?:
Information
Agenda Item Text:
Discussion and Possible Action Regarding SB1476, which shifts State Aid to Education to Counties and Other Local Government, and possibly joining Pima County in a lawsuit against the State.
Background:
This past session, the Legislature enacted and the Governor signed SB1476. Part of this legislation, revising ARS § 15-972, shifts some of State Aid to Education from the State to Counties and other local governmental entities. I've attached § 15-972, including the revisions to it, to this agenda item. As you can see, new subsection K contains an extremely difficult to understand outline of a formula (laid on top of an already extremely complicated set of school finance formulas), with undefined and ambiguous terminology, for determining when and how much of this Aid will be shifted and to whom. It also delegates interpretation of this outline to the Property Tax Oversight Commission (PTOC), which will ultimately decide who pays how much to which school districts.
It is fair to say at this point no one at the State or elsewhere truly understands what formula PTOC will ultimately arrive at. Thus, the potential impact to Cochise County is unknown. Moreover, even when PTOC arrives at a formula, since implementing the formula will depend on school district budgets and levies for 2015-16, the impact to Cochise County (and other local taxing jurisdictions) will not be known until after those levies are established in August. Using 2014 levies, and making assumptions as to PTOC's formula, estimates as to the potential impact by JLBC and the CSA have varied widely. County Administrator Vlahovich has assigned Financial Services Manager Nike Noack to assist in developing an estimate. But it must be borne in mind that this legislation is a permanent shift from the State to counties and other local entities, so even if there is no impact to the County this year, it could affect the County in subsequent years. This will depend on changes in school district levy rates, which are out of County control.
Making assumptions as to the formula, Pima County is quite certain that SB1476 will significantly shift the State Aid burden from the State to Pima County. Accordingly, Pima County is preparing a Petition for Special Action to overturn the revisions to ARS § 15-972. Pima County has retained outside counsel Joe Kanefield of Ballard Spahr to represent it. A draft of that Petition will be made available to the Board before this meeting. (The County Attorneys Office has entered into a "common interests" agreement with the Pima County Attorney so that this can be shared confidentially). Cochise County is evaluating whether to join that lawsuit. Advice to the Board about joining this lawsuit will be made in executive session.
It is fair to say at this point no one at the State or elsewhere truly understands what formula PTOC will ultimately arrive at. Thus, the potential impact to Cochise County is unknown. Moreover, even when PTOC arrives at a formula, since implementing the formula will depend on school district budgets and levies for 2015-16, the impact to Cochise County (and other local taxing jurisdictions) will not be known until after those levies are established in August. Using 2014 levies, and making assumptions as to PTOC's formula, estimates as to the potential impact by JLBC and the CSA have varied widely. County Administrator Vlahovich has assigned Financial Services Manager Nike Noack to assist in developing an estimate. But it must be borne in mind that this legislation is a permanent shift from the State to counties and other local entities, so even if there is no impact to the County this year, it could affect the County in subsequent years. This will depend on changes in school district levy rates, which are out of County control.
Making assumptions as to the formula, Pima County is quite certain that SB1476 will significantly shift the State Aid burden from the State to Pima County. Accordingly, Pima County is preparing a Petition for Special Action to overturn the revisions to ARS § 15-972. Pima County has retained outside counsel Joe Kanefield of Ballard Spahr to represent it. A draft of that Petition will be made available to the Board before this meeting. (The County Attorneys Office has entered into a "common interests" agreement with the Pima County Attorney so that this can be shared confidentially). Cochise County is evaluating whether to join that lawsuit. Advice to the Board about joining this lawsuit will be made in executive session.
Department's Next Steps (if approved):
Possibly join Pima County's Petition for Special Action regarding SB1476
Impact of NOT Approving/Alternatives:
Cochise County will not join Pima County's Petition for Special Action
To BOS Staff: Document Disposition/Follow-Up:
Cochise County Attorney will follow up with the Pima County Attorney