Gov. Doug Ducey has signaled his support for extending a 0.6 percent sales tax hike that funds teachers’ salaries and performance pay beyond 2021, when it is set to expire.
Daniel Scarpinato, the governor’s spokesman, said Ducey is open to the timing of getting a measure on the ballot and other ideas for altering the tax, including expanding it, based on discussions with the education and business communities.
“Obviously, he wants to see Proposition 301 extended past the expiration,” Scarpinato told the Arizona Capitol Times. “The governor didn’t work that hard for Proposition 123 for us to then face a fiscal cliff. That would not be good for K-12. That would not be good for the state.”
Ducey’s support for extending or maybe even expanding Proposition 301 would be a major policy change, since the governor is adamantly opposed to any tax hike. In the past, Ducey has left the door open to the possibility of continuing the sales tax increase enshrined in Prop. 301.
In 2000, Arizona voters approved the additional tax, which allocates money for, among other areas, teacher pay increases and performance.
The tax brought in $644 million in FY2016, and losing the sales tax would leave a big funding hole in schools’ budgets.
Since Proposition 301’s passage, the Legislature had funded both its inflationary components – base level and transportation – until the economy tanked several years ago, when lawmakers decided to fund only the transportation inflationary adjustment and not the base level.
That led to Cave Creek v. DeWit, a protracted legal battle with schools, which sued and claimed lawmakers were not following the voter-approved law and were underfunding schools.
Upon Ducey’s urging, Arizona voters approved Proposition 123, which draws down money from the state trust land and is expected to provide schools $3.5 billion over 10 years, during a special election in May last year.
Proposition 123 also settled the lawsuit.
Since then, education groups, as well as Democrats and Republicans, have said they want to see Proposition 301 expanded to a full penny, and not simply renewed. That, they estimate, would bring in about $1 billion annually.
A December poll from Stand for Children, an education advocacy group, showed 65 percent of Arizona voters would approve a one-cent sales tax hike to fund education.
Scarpinato said Ducey is open to discussing what a “modern (Prop) 301” would look like, including a potential expansion of the tax.
But while some want to see a vote in 2018, Scarpinato said there are “strong arguments” to be made for waiting until 2020, when more people will be voting. But again, he quickly added, Ducey is open to discussing the best timing for the measure.
“Whatever we do, we want to be thoughtful and strategic to make sure that we have the biggest opportunity at success because it is very important,” he said.