A judge has ruled against Pima Community College in its attempt to force Santa Cruz County to pay it approximately $2 million for educating local students during the past two years, and to continue making annual million-dollar tuition payments to it in the future.
Rudy Molera, chair of the county board of supervisors, called Tuesday’s decision by Pima County Superior Court Judge Scott Rash “awesome.”
“That’s a huge sigh of relief for us,” Molera said.
Rash’s ruling, if it stands up to appeal, will save the county from paying a total of approximately $2.7 million in out-of-county tuition for the past two years, as well as $1.35 million for subsequent years. That’s the amount it previously contributed each year to Pima and other college districts, including Maricopa, Pinal, Graham and Cochise, to help educate Santa Cruz County residents.
The county stopped paying tuition to Pima and the other college districts after local voters approved a tax in May 2010 to support the new Santa Cruz County Provisional Community College District. But the Pima district, which had received approximately $1 million in annual tuition from Santa Cruz County, protested the move, saying that under state law, the nearly $300,000 raised by the new tax was not enough to excuse Santa Cruz County from the much larger amount it had been paying each year to other districts.
In July 2011, it sued, arguing in court documents that Santa Cruz County’s interpretation of the law “would allow a county without a community college district to form what is in essence a sham provisional district that is only minimally funded, simply to avoid the necessity of reimbursing out-of-county districts.”
The state’s Joint Legislative Budget Committee (JLBC) had earlier sided with Santa Cruz County, as had the Arizona Attorney General’s office. In his ruling this week, Rash cited comments from the JLBC and previous legislative decisions.
“It appears from the legislative history [that] the legislature understood there would be some inherent unfairness to an existing community college district that continues to service out-of-county residents from a county that has formed a provisional district,” the judge wrote. “Whether the unfairness is a result of the political process or an oversight is for the legislature, not the courts, to address.”
Spokesman C.J. Karamargin said Pima Community College was disappointed by the ruling.
“The college does not believe it is fair for the taxpayers of Pima County to subsidize the college education of students from Santa Cruz County,” he said.
According to Karamargin, PCC enrolled 1,026 students who listed a permanent address in Santa Cruz County during the recently concluded academic year.
The Santa Cruz County Provisional Community College District currently contracts with Cochise College to provide local classes. Last semester, approximately 560 county residents were enrolled at the college’s Nogales campus, director Sue Nielsen said.
Nielsen said the fact that so many local students continue to enroll at Pima is to be expected, considering the relative size of the schools and counties. She said she expects that many small Arizona counties that have community colleges send a lot of their students to larger schools in larger areas.
“The way the system is set up, there’s always going to be a disparity between the counties, especially the rural counties that have trouble finding enough students to fit in its of programs,” she said. “Pima has lots of programs that we can’t have here.”
Rash’s ruling this week came in response to motions for summary judgment filed both by Santa Cruz County and Pima Community College. In rejecting PCC’s request for a ruling in its favor and granting Santa Cruz’s County’s, the judge told SCC’s lawyers to submit a so-called “form of order” within 10 days summarizing his ruling. If PCC accepts the form’s wording, or if it objects and the wording is modified, Rash will then issue a final judgment in the matter.
PCC could then appeal the judgment, and Karamargin said administrators intend to ask the college’s governing board to authorize an appeal.
The possibility that the suit would go in PCC’s favor had been weighing heavily on county officials and administrators. On Wednesday, prior to learning of the judge’s ruling, the board of supervisors voted to transfer $1.25 million from the County Flood Control District to the county’s general fund, in part to cover potential lost revenue from the lawsuit. And county administrators have asked department heads to draw up two proposed budgets for the coming 2012-13 fiscal year: one with a 3-percent overall spending cut, and another with a 6-percent cut in case of an unfavorable ruling in the lawsuit.
County Manager Carlos Rivera said the 6-percent contingency would still be required, just in case Pima were to appeal the ruling and win. But he still called Judge Rash’s decision “a big relief” considering the financial stakes.
As Rivera explained it, Arizona counties don’t actually “pay” out-of-county tuition obligations. Instead, the Joint Legislative Budget Committee deducts the tuition payments from a county’s state-shared sales tax revenue.
Since Santa Cruz County receives about $3 million per year in state sales tax, a ruling forcing it to pay the last two years in back tuition would have essentially wiped out that revenue for this year, Rivera said. And it would have cost the county another $1.35 million per year after that. (To put those amounts in context, the county’s budget for the 2011-12 fiscal year anticipated $20.3 million in general fund revenues).
The only way to deal with those kinds of losses, Rivera said, “would be to eliminate positions and people.”
In addition to fighting the lawsuit, the county had also lobbied hard for a new law that would explicitly exempt it from the disputed tuition payments. However, bills introduced in two legislative sessions failed to reach the governor’s desk.
County Finance Director Jennifer St. John said the county paid a lobbyist $48,464 to try to get the bills passed. And she said it has so far spent $37,677 in legal fees to fight the Pima lawsuit.
Rivera also made numerous round trips to Phoenix on the matter – and suffered significant stress over it as well.
“There were times I couldn’t sleep at night just thinking, ‘How are we going to make this?’” he said. “This would have impacted people, families – it’s not pleasant thinking about the consequences.”