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Budget calls for school districts to divvy up pay increase

MRebuffing last-minute protests by educators picketing the Capitol, Republican lawmakers took the first steps Monday to providing a 9 percent raise this coming year for teachers.

But not necessarily all teachers.

The final version of the budget deal negotiated between GOP leaders and Gov. Doug Ducey puts $273 million into the $10.4 billion spending plan for the coming year specifically for teacher pay hikes.

But unlike Ducey’s original proposal, each school district will get its share as a bulk dollar amount. That, then leaves it up to board members to decide how to divide it up.

What that could mean is a larger bump at the bottom of the pay scale, both to attract new teachers and keep them in the profession. The state Department of Education estimates that 40 percent of new teachers leave after two years.

Some of that is because the job isn’t what they expected or other non-financial issues like workload. But state schools chief Diane Douglas, who has been a prime proponent of higher pay for teachers for years, has said that money is clearly a factor.

That same plan for bulk salary grants to school districts also will apply for the 5 percent pay hike proposed for the following school year and an additional 5 percent the year after that.

Along with that flexibility, the spending plan unveiled Monday also calls for more transparency, with new requirements for school districts to annually report on their web sites their average teacher salaries. House Speaker J.D. Mesnard said that ensures “this is all out there for people to see.”

Teachers rally outside the Arizona House of Representatives Monday, April 30, 2018, in Phoenix on their third day of walk outs. Teachers in Arizona and Colorado walked out of their classes over low salaries keeping hundreds of thousands of students out of school. It's the latest in a series of strikes across the nation over low teacher pay. (AP Photo/Matt York)

Teachers rally outside the Arizona House of Representatives Monday, April 30, 2018, in Phoenix on their third day of walk outs. Teachers in Arizona and Colorado walked out of their classes over low salaries keeping hundreds of thousands of students out of school. It’s the latest in a series of strikes across the nation over low teacher pay. (AP Photo/Matt York)

None of this satisfied educators who remained on strike for a third day on Monday as they marched around the Capitol in what they hope will be a successful effort to convince lawmakers not to adopt the budget and pay-hike plan that Ducey has proposed. And all indications are that many teachers will remain on strike through at least today — and possibly until the budget is enacted at the end of the week.

Ducey and Republican lawmakers question the protests, pointing out it provides for a 19 percent increase in teacher pay, at least on average. But education groups are not confident that the funds will be there, particularly in later years, leaving open the possibility a future governor and future lawmakers could rescind the promise.

What’s also missing as far as educators are concerned are specific dollars earmarked for support personnel like janitors, reading specialists, counselors and bus drivers.

Ducey counters that his budget includes $100 million in additional district assistance, money that schools can spend on whatever priorities they have, whether repairs or other pay increases. But that, however, is only part of $371 million a year schools are supposed to have been getting all along for books, computers, buses and other minor repairs.

But the biggest complaint is that state aid on a per-student basis is less now than it was a decade ago, even before the effects of inflation are considered. The education groups want that $1 billion difference restored.

That question of whether the funds will be there to finance higher teacher pay is what’s behind an initiative to hike personal income taxes, at least on the wealthiest Arizonans, in an effort to raise $620 million.

But David Lujan, who chairs the Invest in Education campaign, denied Monday that financing increased aid to education this way is a kind of class warfare.

“Right now, lower and middle-income people are paying a larger portion of their income in taxes,” he said. “I think this is a fair way to go.”

In criticizing the plan, Glenn Hamer, president of the Arizona Chamber of Commerce and Industry, said that one big flaw is that there are not that many people in Arizona who are in those top tax brackets. The result, he contends, is that it would take only a few of the richest choosing to move — or find other ways of shielding their income — to drop the bottom out of the anticipated $620 million in annual revenues.

Lujan brushed that concern aside.

“The answer to volatility is making a more diverse economy,” he said.

“How do you get a more diverse economy?” Lujan continued. “One of the biggest ways is to invest in your public education system.”

But the most recent figures from the state Department of Revenue — from 2012 — suggest there aren’t a lot of people at the top end of the income scale to bear the burden. It found there were fewer than 15,000 filers in Arizona with a federal adjusted gross income of more than $500,000 out of more than 2.4 million tax returns.

Lujan also said that the proposal simply brings the taxes back to where they were before lawmakers started making cuts.

That, however, is not true. The tax rates that the initiative seeks to impose are actually higher than they’ve been in decades.

Prior to 1990, couples with taxable income of more than $15,480 paid income taxes at a rate of 8 percent. That year the Legislature put in a tax schedule closer to what exists now, with the top bracket being 7 percent for couples with taxable income of more than $300,000.

The initiative spells out that couples earning more than $500,000 pay $20,622 — a 4.1 percent blended rate for that first $500,000 that is identical to what they pay now — plus 8 percent of anything over that figure.

And at $1 million the tax bill becomes $60,622, a 6.1 percent blended rate for that first $1 million, as compared to a current bill of $43,322. Plus they would owe 9 percent of anything in excess.

“We wanted to hit it where it was people who were going to be able to afford it, who benefited from past tax cuts,” Lujan said.

The initiative actually differs in one key way from the original plan that had been unveiled late last week.

That would have required school boards to get approval from teachers and support staff for how they spend the money, essentially mandating collective bargaining on school districts. Lujan said Monday that controversial language now is gone.

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