Kiera Riley Arizona Capitol Times//December 20, 2024//[read_meter]
Kiera Riley Arizona Capitol Times//December 20, 2024//[read_meter]
When is the deadline to call a special election to pass a renewed version of Proposition 123 before the end of the fiscal year? It depends on who you ask.
With Proposition 123, a 2016 voter-approved measure increasing the distribution from the state land trust to K-12 schools, set to lapse at the end of the fiscal year, stakeholders are still trying to figure out how exactly to fashion the next version of the school funding mechanism, and when to send the resulting measure to voters.
According to the Secretary of State’s Office, lawmakers would need to call an election within the first week of the legislative session as county election officials need a minimum of five months to prepare for a statewide election. But a senator working on the measure said the true legal deadline is closer to mid-February.
Either way, a new iteration of Prop. 123 by the end of the fiscal year is not exactly vital. Though stakeholders are working to extend the measure sooner rather than later, the Legislature has a legal obligation to backfill about the approximately $300 million that would no longer be covered by the state land trust come July.
“It’s not a fiscal cliff,” Sen. J.D. Mesnard, R-Chandler, said. “It’s designed not to be a fiscal cliff.”
Although an election call in the first week of session may be ideal, Mesnard said he did not believe it to be the legal drop dead date. He noted, too, a call by the first week is not realistic.
“It would be hard enough if we had the same Legislature,” Mesnard said. “But we have a new Legislature, some members don’t know anything about this, even though we are picking up where we left off.”
Mesnard said he understood the deadline to be in February, though he would “admittedly get more concerned as we get into February.”
State statute requires consolidated election dates, one of which being the third Tuesday in May, which in 2025, would be May 20. The Secretary of State’s Office has a separate constitutional duty to publish the proposed amendments for at least 90 days prior to the election.
Under that time constraint, the Legislature would have to pass legislation before Feb. 18, with time to transmit to the governor and the secretary of state.
Though a special election is the initial goal, Mesnard said the question could wait, with the potential it goes to voters in the 2026 general election.
How the measure itself takes shape remains an open question.
Prop. 123 came about as part of a settlement of Cave Creek Unified School District v Ducey, in which the court required the state to keep base level funding for K-12 schools in step with inflation.
The measure, which was first enacted with 50.92% voters approval in a special election in 2016, increased the distribution rate from the state land trust fund to schools from 2.5% to 6.9% through FY2025.
Last session, as Prop. 123’s expiration date crept closer, lawmakers started to formulate how exactly to retool and revamp the draw from the state land trust.
Republicans hit first and proposed the Legislature backfill the base level for Prop. 123 and use the funds for teacher pay raises instead.Democrats shot back with a plan to increase the distribution rate from 6.9% to 8.9%, with a split to cover general school funding, educator and staff pay raises and school safety.
But no salient, bipartisan plan came to be by the end of session, leaving Prop. 123’s fate yet to be decided.
Stakeholders, including the governor, the Secretary of State’s Office, lawmakers, education groups and business groups have continued to meet about Prop. 123 since late summer.
Meghaen Dell’Artino, a lobbyist with Public Policy Partners, said in an email that spending the dollars on teachers and those who support the classroom continue to be a priority.
“For us, as long as the funding is ongoing we are okay restricting the dollars for that purpose. But if the plan only provides funding for 10 years then the funds would need to be flexible or you end up with a funding cliff and pay that can not be sustained because the funding expires,” Dell’Artino said. “Stakeholders are talking with legislators and the governor and believe that a bipartisan Prop 123 deal that benefits all public schools will get to the finish line. When, we aren’t sure.”
For the governor’s part, spokesman Christian Slater said in a text that a special concurrent legislative session is “definitely on the table if it will be necessary and productive.”
He added Hobbs is “committed to extending Prop. 123 to properly fund public education and ensure Arizona students can thrive in their neighborhood schools.”
Mesnard said he and Rep. Matt Gress, R-Phoenix, held a listening session with stakeholders “from one end of the political spectrum to the other one (and) one area of interest within education or another” to start and plan to hold another before the session starts.
“I think it’s early to say what all will be captured, but certainly within our K-12 conversation, you have a lot of support for school choice and the right of parents to make the educational decisions that work best for their kids,” Mesnard said.
He continued, “How that fits into (Prop 123)? I’m uncertain right now, but it’s just acknowledging because when we go to the voters, we’re going to want to have as broad a support as possible. We want it to pass. We don’t want to send something that is going to fail. And so hearing from all these different groups with, again, their different lens on what they see is valuable, what they know, what they prioritize, that right now can include anything.”
The key contentions with Prop. 123 last session continued to be the proportion drawn from the state land trust fund and who would benefit from the funds, with a particular fissure along party lines on whether school staff or solely teachers would benefit from pay raises.
Justan Rice, executive director for the Arizona School Boards Association, attended a Prop. 123 listening session, and said “no one has really said one thing or the other about whether this money will be strictly siloed to teachers, or where this is something that might be a little bit more expansive.”
Rice said discussion about dollar or percentage amounts from the state land trust fund is at early stages.
Mesnard added that there is a potential for a “plethora” of legal challenges down the line. There could be litigation on the single subject rule, a provision requiring a constitutional amendment be limited to one matter, and a standing question of whether the state has congressional approval to further tap into the state land trust fund under the Enabling Act, the initial federal legislation setting up the Arizona state land trust at the time of statehood.
“There are plenty of places this thing could go off the legal rails,” Mesnard said. “It’s an uphill battle, politically, policy wise, legally. We’re still working to get it done, but we’re cognizant of the land mines.”
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