• Local school districts were recently forced to sue the state for adequate funding
• From 1966 to 2006, AZ dropped from 130% of the national average to 80% in K-12 education expenditures (Chart 12, p. 33)
• AZ currently now ranks 48th in K-12 education funding and many quality metrics (pp. 5, 6, 43, 44, 50, 53 in the above link)
How did ASLD manage to fail so miserably in its purpose? By getting the green light from the courts to seek maximum selling price for K-12 Trust Lands, regardless of K-12 funding liabilities incurred during rezoning for highest price. This legal policy has enriched real estate developers, but impoverished school districts.
Case in Point: the Annexation at Tangerine and Thornydale
The Site Specific Plan for the Tangerine and Thornydale annexation (page 75) says that 1,767 K-12 students will be added to the Marana School District if Oro Valley should annex and develop the land using the recommended zoning. I wondered why the Marana Unified School District (MUSC) would accept such a burden and, after multiple discussions with different officials, I got the answer: MUSC will get its ~$8500/student/year from the State, or ~$15 million/year, regardless of the selling price of this tract of land.
Where will this ~$15 million/year come from? Well, if the ~3100 houses in the plan pay a similar school tax to me in Sky Ranch, each household will contribute ~$1400/yr in school taxes, for a total of ~$4.3 million. That means, for this annexation to make financial sense for K-12 education, the revenue stream from the sale of the land needs to be ~$10.7 million/year.
What selling price is required to generate annual interest revenue of $10.7 million/year? First, we need to know a safe interest rate, so let’s try 2-4%. At 4% interest, the sale price would need to be $267 million, or ~$302,000/acre, given that the annex is 885 acres in size. At 2%, those figures have to double to $534 million dollars or ~$604,000/acre. Is anyone going to pay ~$300,000 to $600,000/acre for that land?
In my opinion, this is why AZ K-12 education funding is in crisis. The crisis will only deepen, and beneficiaries of the Trust will be more and more harmed, if Site Specific Plans like this are applied to the millions of acres of State Trust Land.
Solution: Future Revenue Stream Must Cover Future Expenses
When ASLD demands aggressive rezoning from a Town in order to achieve the highest selling price for a tract of State Trust Land, ASLD should be required by affected towns and school districts to demonstrate, from its appraisals and data on K-12 education costs, that the predicted future revenue stream will equal the predicted future expense stream. The farce of ASLD simply trumpeting their record-breaking revenue additions through land sales without revealing that it was accomplished by taking on more student expenses than the expected revenue and school tax stream will support has got to stop.
Parting Shot: Don’t Forget Water Liabilities Either
The 860,000 gallons/day required by this plan (p. 75, Water, 2nd paragraph) is another piece of “the rest of the iceberg.” What is going to happen with regard to AZ water demand if this pilot project goes Statewide, with Towns and developers eagerly adopting its aggressive rezoning and entitlement techniques? With Arizona currently under a Drought Contingency Plan, this is, in my opinion, another reason for Oro Valley to reject this pilot plan out of concern for the whole State, and take it up only after the overallocation of the Colorado has been dealt with.
The little-known “pilot plan” aspect of this annexation should have been discussed with the public and their elected officials before trying to push it through a struggling Town approaching buildout.
View the Site Specific Plan HERE
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Jim Tripp has a Bachelor’s degree in Biological Sciences from Cornell University and a Ph.D. in Molecular and Cellular Biology from Oregon State University. Prior to retirement, he was employed as a Federal Regulations Analyst for Wisconsin Power and Light and as a Research Scientist at UC Santa Cruz and Berkeley National Labs. He has over 30 scientific publications to his credit.
