Troubled Isaac School District receives $6M as state leaders demand accountability
PHOENIX - Educators at the Isaac Elementary School District received good news on Monday from the federal government.
Money is on the way. For now, however, the county says it won’t go toward paying the district's payroll.
Why is the district in such financial distress?
What we know:
The Arizona Department of Education said the school district is "somewhere between $12 million - $15 million underwater."
Maricopa County says the debt is actually much higher.
Those on every side of this issue said they want a solution, and teachers just want a paycheck for their work.
Even if everything works perfectly from here on out, it won’t happen in time.
The backstory:
Per a Dec. 31, 2024 letter sent to Superintendent of Public Instruction Tom Horne by Maricopa County School Superintendent Steve Watson, the district has a total overexpenditure of approximately $12.6 million.
Additionally, the letter states that Isaac School District has a negative balance of approximately $6.6 million in relation to a federal program that aims to provide discounted phone and internet services to eligible schools. The letter states the expenses would need to be "corrected to an appropriate fund" if the district does not have adequate financial claims to support the expenditures, which will increase the overspend even further.
Per the minutes from the state board of education meeting, the state board of education voted unanimously to place the district under receivership.
Arizona Education Association President searching for answers to Isaac School District financial crisis
The Isaac School District is facing a $12-15 million financial crisis as teachers, families and Arizona Education Association President Marisol Garcia are all searching high and low for answers to keep students and educators in the classroom.
What's next:
Arizona Superintendent of Public Instruction Tom Horne announced the Feds released $6 million in old COVID-19 relief money for the district, but the state won’t hand it over until the county agrees to use it on payroll.
"They’re refusing to use the money for payroll. They say if we send them money, they’ll use it to pay back debt," Horne said.
The county says they legally have to pay off debt first.
Teachers express worries over pay
As the turmoil at the school district continues, teachers within the district are still rallying and bringing attention to the financial woes.
Dig deeper:
On the morning of Jan. 27, teachers rallied outside the district's buildings, not knowing if their pay had run dry. Payday is on Wednesday, and many have said if they don't get paid, they are not sure if they will show up to work.
Despite knowing they are not getting paid, 650 Isaac employees went to work on Jan. 29.
What they're saying:
"I think the educators will have to take it a day at a time and make a decision," said Marisol Garcia, President of the Arizona Education Association. "Right now, they are committed to going to work today, not receiving a paycheck, and knowing they may not be paid, with no future plan, they’ll have to make the decision again tonight on whether they can show up again tomorrow and take another day of unpaid work."
"We’re frustrated because we didn’t do this as parents, the teachers didn’t do this, the schools didn’t do this," said parent Juan Rojas. "Members that are in charge of our district, that didn’t do their job like they were supposed to."
State lawmakers demand accountability
Meanwhile, Arizona state legislators are demanding accounting accountability, as the scale of Isaac's financial woes become clear.
Republicans in the State Senate are launching an investigation into what they call "a tremendous amount of overspending." One House Republican, State Rep. Matt Gress. has criticized the school district's leadership.
"The district leadership engaged in some pretty appalling practices over the last several years, driving this district into the ground," State Rep. Gress said.
On Jan. 28, State Rep. Gress introduced a bill that, if approved, would allow the district to continue operating for two weeks, offering $2.5 million to cover one payroll in the form of an advance on state aid.
In exchange, all of the district's board members, along with the superintendent, would lose their job.
In His Own Words:
I don’t think the current board is adding any value to Isaac School District. They’ve done the exact opposite. So I don’t think they need to be part of the solution," said State Rep. Gress.
What Could Be Next:
Meanwhile, State House Speaker Steve Montenegro and State House Majority Leader Michael Carbone are asking for an immediate criminal investigation into the district’s Governing Board, Superintendent, and Chief Financial Officer. They want to know if any laws were broken, if illegal payments were made, monies were mismanaged, or there was any conflict of interest.
The two also sent a letter to Arizona Attorney General Kris Mayes that reads, in part:
"We were shocked to learn that you confirmed that you have no intention of investigating this school district, claiming that there is no evident warranting an investigation and chalking it all up to ‘mismanagement’ in a ‘poor school district.’ To be clear, mismanagement of public monies is precisely the type of conduct that justifies your office’s investigation."
AG Mayes, in her response to Republicans, called their statement "inaccurate and misleading," and said she is currently reviewing materials, and will determine if they warrant a criminal investigation.
For his part, State Senate Education Committee Chair David Farnsworth said this is a larger issue involving a number of school across Arizona facing budget shortfalls and being put under receivership.
What He's Saying:
"My understanding it was not really a money issue because that district was receiving a large amount per student. It was a problem of administration," State Sen. Farnsworth said. "That’s why I say we got to carefully craft the solution to meet the immediate need, and also it’s an opportunity to really get people to the table and look at the problem, so that this will not happen over and over again."
What's next:
What's the long-term plan?
"The long-term is they have a lot of property they can sell so everything that was advanced can be paid back," Horne said.
A receiver has taken over the district to find what happened.
"It’s hard to make this type of money just disappear and not really have the things to show for it, in which they said they were doing. And that concerns me," Allen said.
So, now the focus shifts to the state capital and the legislators here.
Even if something came through Monday night, the money would not arrive in time for payroll on Jan. 28.
Arizona education board places Isaac School District in Phoenix under receivership: Here's what to know
On Jan. 14, the Arizona State Board of Education placed Isaac School District, which is located in the Phoenix area, under receivership. Here's what to know about school receiverships, as well as how it works.