Gov. Doug Ducey said Tuesday he won’t take another round of tax cuts off the table even as Arizona schools struggle to recover the hundreds of millions of dollars in state aid they lost during the recession.
Ducey is on a swing of six schools around the state promoting his idea of dipping into the principal of the state land trust fund to put more into public education. That would require voter approval as the Arizona Constitution says only the interest from the fund, which includes the proceeds of state lands sold and leased, can be touched.
The maneuver would, in fact, create more dollars, as least in the short term.
Potentially more significant politically, it would do that without tapping state tax revenues. And that means more money for Ducey to fulfill a promise he made in the 2014 campaign to cut taxes each and every year, no matter what.
“I said what I said.” the governor said when asked about that pledge. “We intend to do that.”
But Ducey also said it’s premature to be speculating on K-12 funding for next year – and who will benefit from tax cuts.
“Let’s give it a little bit of time,” he said.
“I think everybody knows my commitment to fiscal responsibility,” Ducey continued. And one of those he said is getting new dollars for schools, “outside of the budget,” meaning not using money the governor could earmark for other purposes, including tax cuts.
Ducey’s plan has been criticized by Jeff DeWit, who succeeded Ducey as state treasurer. DeWit, who said he also has the backing of two other former state treasurers, said tapping into the trust proceeds will result in less money down the road for the public schools that depend on the regular flow of cash from the interest.
DeWit then found himself the target of a blog post by an employee of Ducey ally Sean Noble. Lisa De Pasquale wrote that DeWit either is not the fiscal conservative he presented himself to be or “he’s throwing a bureaucratic hissy fit because his office didn’t present a successful plan first.”
“Either way, he’s willing to side with unions and liberals (but I repeat myself) in holding Arizona kids for ransom in order to defeat a conservative plan with strong support from Arizonans,” she wrote.
Ducey tried to deflect questions about such tactics by his allies, saying people should pay attention to what he says as the architect of the trust-tapping plan. But he neither would disavow nor even distance himself from the tactics being used on his behalf.
“Anybody who is working to get more money into K-12 education that will result in better results for these children are being helpful to our agenda,” the governor said.
The question of how best to restore funds to schools comes as the state ended the last fiscal year on July 1 $266 million in the black, compared with the $132 million in red ink that had been anticipated.
At least some of the excess is due to actual cuts in funding during the Brewer administration and years of the state not having fully funded a voter-mandated formula to boost aid to match inflation.
A trial judge already has ruled schools are due more than $330 million in funding for last year, a ruling now on appeal. Still pending is whether schools also should get more than $1 billion in missed aid.
Ducey has sidestepped questions on the litigation, saying only that he will do what the courts require. But the governor’s own first budget for the current fiscal year adopted a view of inflation that actually resulted in an overall increase in aid of only about $11 million for more than one million students.
Instead, he has pushed the idea of dipping into the trust principal. But even if that plan is fiscally sound – an issue still being debated – it cannot take effect until after it goes to voters more than a year from now.
Ducey was noncommittal about finding some more immediate cash for schools.
“We’re talking with the Legislature right now as well as legislative leadership about what we want to do about next year’s budget and what the funding is going to look like in K-12 education,” he said.