Competing proposals to hike a sales tax earmarked for education differ on how to spend the potentially hundreds of millions of dollars in new revenue.
The Senate Education Committee advanced Sen. Sylvia Allen’s plan to raise the 0.6-cent sales tax, known as Proposition 301, to a full penny. If her legislation is approved, it would send a question to the 2020 ballot, asking voters to approve the tax hike.
If voters favor it, the penny sales tax would take effect on July 1, 2021, and is estimated to generate a total of nearly $1.1 billion. That’s a roughly $400 million increase over what the tax as is generates, and it all goes to K-12 public schools and higher education.
But in advancing the Snowflake Republican’s legislative package on 5-3 votes, some lawmakers expressed reservations about how Allen wants to spend all those dollars.
Sen. Kate Brophy McGee, R-Phoenix, said she spent the past year meeting with a variety of school officials, and their priorities don’t always align with Allen’s.
University officials told Brophy McGee it’s vital to preserve funding for university research and development. Prop. 301 currently raises roughly $80 million for those efforts, but Allen’s plan eliminates those dollars.
“It’s a deal-breaker” if those research dollars don’t continue, Brophy McGee said.
She also wants to preserve a tax credit designed to offset the burden of a higher sales tax on low-income families, a priority shared by Democrats like Glendale Sen. Martin Quezada.
And more taxpayer dollars should come with more oversight of those dollars, Brophy McGee said. She may introduce her proposal, which she’s drafting with Rep. Michelle Udall, R-Mesa, later this week.
Despite those differences, Brophy McGee and Allen tried to focus on the positive, like the simple fact that they’re both in favor of raising taxes.
Allen applauded Brophy McGee’s work on Prop. 301 and vowed to allow hearings on her competing proposal once it’s introduced. And Brophy McGee voted for Allen’s legislation, a “good faith” vote that she cast while assuring she’d hold firm on issues such as the university research funding.
“What I see at the end of the day are two rock-solid Republican woman who are both saying, ‘We need to do this,’” Brophy McGee said.
The three Democrats on the Senate Education Committee voted against the proposal, arguing that it doesn’t go far enough. Several hundred million dollars isn’t enough to restore recession-era cuts to K-12 schools, lawmakers like Quezada said. As for the sales tax, Quezada noted it’s regressive because it affects low-income Arizonans to a greater extent than the wealthy, a problem compounded by Allen’s proposal to repeal the Prop. 301 low-income tax credit.
Nonetheless, even Democrats praised Allen’s effort as a tone-setter for the legislative session.
That’s part of the reason why the reception to Allen’s proposal was mostly positive, even as some education advocates noted it’s not perfect. Virtually no one who testified before the Senate’s education panel outright opposed Allen’s legislation, though some made reference to Brophy McGee’s pending proposal as an alternative.
Allen expressed some openness to altering her plan, such as retaining funding for university research. But she warned against a widespread effort to implement more carve outs for certain K-12 interests.
Voter-approval of the tax hike would trigger changes detailed in a companion Allen bill that eliminates 10 distinct funding requirements for how Prop. 301 dollars must be spent.
Allen plans to consolidate those “buckets” into three distribution streams: One for K-12 schools, which would receive 73 percent of the revenues; one for universities, who would be due 22 percent of the revenues; and another for community colleges and tribal schools, which receive the remaining 5 percent.
Allen said it was her goal to get as many dollars as possible into the classroom. At the K-12 level, that means sending all revenues to school districts, and giving local officials discretion over how to spend it.
At the university level, that means earmarking funds to help cover the cost of in-state tuition for Arizona residents.
As for community colleges, Allen threw her support behind rural schools and workforce development programs.
“Businesses are crying for this. They need trained workforce development,” she said. “My rural schools need this money, and they need it up front and they need to know they’re getting it every year.”
Meddling with how the funds are distributed could leave lawmakers back where they started, Allen warned.
“If we keep putting stuff back into the pot, it’s gonna be these 10 buckets again,” she said.