Proposition 301 | Arizona Capitol Times

Business leaders calling for big tax hike to fund public schools

Business leaders are advocating for a permanent expansion of a sales tax that funds public schools by nearly three times the current amount.

In a commentary submitted to The Arizona Republic, former State Board of Education President Reginald Ballantyne III, Brewer Companies and Benjamin Franklin Plumbing CEO Mike Brewer, retired PetSmart CEO Phil Francis and Whiteman Foundation President John Whiteman proposed increasing the voter-approved 0.6-percent sales tax to a 1.5-percent tax.

“The governor’s recent budget increased teacher pay, but we should help him do more,” they wrote. “There is a growing teacher shortage in Arizona and many district superintendents report low salaries as a top reason for teachers leaving the profession.”

Voters, who approved the tax in 2000 as Proposition 301, would have to OK any increase. The tax is set to expire in 2021.

Teacher pay was at the top of the businessmen’s priorities for the additional tax dollars, with a proposed $340 million over a minimum of six years intended for salary hikes. The plan also proposed $240 million to fully fund all-day kindergarten, $278 million to restore the School Facilities Board’s building renewal fund formula, and $25 million each for teacher training and private sector grants for workforce development programs.

The commentary focused heavily on Gov. Doug Ducey’s vision, which the businessmen lauded, noting that it’s unrealistic to expect a governor who was “elected with a commitment to lower taxes” to propose new ones.

Instead, they appealed to their friends in the business communities and Arizona voters to create a supportive coalition behind their plan, which they said champions the priorities that Ducey has laid out.

“Ducey has signaled his support for extending Prop 301 and has said he does not want Arizona to ‘fall off a cliff’ when the funding program expires,” according to the commentary. “Supporting Ducey’s vision, our business-led initiative must include permanently extending Prop 301 to protect more than $600 million in recurring funding for our universities, community colleges, local district and charter public schools.”

Ducey spokesman Daniel Scarpinato declined to comment directly on the proposal to expand and extend Prop. 301, but his broader statement suggested the business community is not likely to win the governor’s support.

“The governor does not support tax increases,” Scarpinato said via email.

Ducey, who has pledged not to raise taxes, has expressed support for extending the Prop. 301 tax but has been ambivalent about proposals to increase it to a full cent.

In March, Scarpinato said Ducey is open to the timing of getting a measure on the ballot and other ideas for altering the tax, including expanding it.

Organizers of the plan to increase Prop. 301 did not specify when they hope to put the measure on the ballot, but Ballantyne told The Republic it needs to be done “ASAP” and that “the sooner we can get going, the better.”

With Prop. 301’s end in sight, the only options for the business community proposal are 2018 and 2020.

Ducey is also up for re-election next year.

Arizona Education Association President Joe Thomas said waiting until 2020 would be “a dangerous game.”

“Legislators have an opportunity every year to intervene, and the only actions that we’ve seen them take in the last decade is cutting education and calling it the new normal,” Thomas said.

“In the end, a lot of what will move forward depends on where the governor’s support is,” he said. “The governor needs to come out and talk about what his priorities are around renewing Proposition 301. We don’t know when this is going to happen. We need to get money into our classrooms now.”

But before anything is put on the ballot, Thomas said the business and education communities need to come together to work out the specifics.

Thomas said the business leaders’ plan for the tax expansion focuses on broad, big picture ideas, leaving him with questions on items like a $25 million allocation for workforce development.

He shared the same criticism for other plans touted by officials like Superintendent of Public Instruction Diane Douglas, who has also advocated for a permanent expansion of Prop. 301.

Still, both plans do address the one thing Thomas considers paramount to a successful effort.

“They’re both very broad, but they both do focus on the teacher retention crisis that we have in this state,” he said. “That is going to be a necessary component of any 301 expansion.”

Arizona Chamber of Commerce and Industry spokesman Garrick Taylor was also cautious about analyzing the plan in its early stages, echoing comments chamber President and CEO Glenn Hamer made to The Republic.

“Prop. 301, or the funding mechanism, has to continue,” Taylor said. “What form that will take going forward is what needs close analysis and deep discussion.”

He recommended ensuring business, education and government leaders are aligned behind whatever is put before voters, which he noted appears to be what the business community is striving to do.

Still, it’s too early to tell.

“When we heard about this idea, it was via the (Republic) reporter,” Taylor said. “Absent a more formal proposal and a sense of what the electorate is thinking about these sorts of issues, it’s difficult to give an assessment, especially not knowing what other proposals might emerge.”

Jeremy Duda contributed to this report.

Ducey offers teachers 20% pay raise by 2020

Arizona teachers march in protest of their low pay and school funding in front of a local radio station waiting for Republican Gov. Doug Ducey to show up for a live broadcast Tuesday, April 10, 2018, in Phoenix. Arizona teachers are threatening a statewide walkout, following the lead of educators in other states. (AP Photo/Ross D. Franklin)

As Arizona teachers threaten to strike over low wages, Gov. Doug Ducey unveiled a revised budget proposal April 12 that offers educators a 9-percent pay bump in the next school year.

The governor’s latest plan still won’t raise taxes to generate new revenue. And unlike a competing proposal floated by House Republican leaders, it won’t sweep money from other sources of funding proposed for K-12 schools, like the $371 million Ducey pledged to school districts for capital needs like new school buses, textbooks and facility maintenance.

Just days ago, Ducey had characterized teachers rallying behind the “Red for Ed” movement as engaging in “political theater.”

On Thursday, Ducey had a much different response.

Gov. Doug Ducey announces a plan to give teachers a 20 percent raise over the next three fiscal years. (Photo by Katie Campbell/Arizona Capitol Times)

“I’ve said I’m on the side of the teachers, and we’ve been listening and I’ve been working,” Ducey said.

Ducey’s proposal relies on a variety of sources, like higher-than-average state revenues and new dollars available from the legislative extension of the Proposition 301 education sales tax. Ducey has also proposed reducing state government operating budgets to pay for the proposal.

State budget analysts recently estimated there may be $46 million in ongoing revenues available thanks to strong revenue collections.

The governor may also roll back some of the legislative initiatives he proposed this year, including a tax break for some veterans. Another item that could be on the table is funds Ducey earmarked for enforcement of a new, wrong-way driving law that charges drivers who go the wrong way on the highway with a felony.

“Our economy has been growing, we have surplus revenues and we’re going to put these toward teacher pay,” Ducey said. “That’ll be the commitment. We’ll have to make other adjustments.”

Ducey’s initial budget proposal in January included a 1-percent pay raise for teachers, following through on the promise of a 2-percent pay bump phased in over two years.

The new plan boosts teacher pay by 9 percent in the upcoming school year, for a total raise of 10 percent since 2017. That amounts to $274 million for teacher pay in the proposed budget for next year, Ducey said at the press conference.

Under Ducey’s plan, when teachers start teaching in the fall they will be paid, on average, $52,725 — up from the current average of $48,372. By 2021, Arizona teachers will make $58,130 on average.

The governor is also promising future raises of 5 percent in fiscal years 2020 and 2021 for a cumulative total of 20 percent over a four-year period.

House Speaker J.D. Mesnard and Senate President Steve Yarbrough, both Chandler Republicans, offered their initial blessing of Ducey’s plan, as did other legislators flanking the governor when he announced the planned pay hikes.

Rep. Heather Carter, R-Cave Creek, said it was crucial that Ducey maintain the promise to restore cuts to capital funding and boost teacher pay.

“(Capital funding) is a critical component of any budget that we have moving forward, because it is important to realize that it is time for us to start restoring a portion of that formula funding that has been suspended for a number of years,” Carter said.

Mesnard, who this week floated a proposal that would have swept capital funding to boost teacher pay, said he supports Ducey’s concept to fund both needs.

“If we can do both additional assistance and teacher pay, that’s fine. If I have to choose, I’m always going to choose teacher pay,” Mesnard said. “Teacher pay has to be the priority.”

To do this, Ducey must now convince a majority of legislators to approve his proposal and give teachers a 9-percent raise this year.

Raises offered in the out years are no guarantee.

Ducey is up for re-election this year, as are all members of the Legislature. Future budgets may be tighter, and a Legislature with a different makeup may resist pay raises Ducey promised in previous budget years.

The governor’s latest proposal comes in the wake of an inspired protest from Arizona teachers, who’ve watched their colleagues in states like West Virginia and Oklahoma spur state leaders to boost funding for K-12 education.

Locally, Arizona teachers hopped on the “Red for Ed” movement this legislative session calling for higher teacher pay and more school funding.

Leaders of Arizona Educators United have called for 20-percent raises. While they haven’t specifically said when they want the raises, they could be dissatisfied with Ducey’s proposal to spread out the pay hike over four years. But Ducey was flanked by dozens of superintendents and other education advocates as he made the announcement.

Ducey’s earlier dismissals of teachers’ demands have left educators so incensed they’ve threatened to strike. Earlier this week, Ducey called the “Red for Ed” movement “political theater.”

Teachers at roughly 1,000 Arizona schools held “walk-ins,” in which educators rallied outside their schools before morning classes began on April 11.

Ducey’s message to those teachers is, “I heard you guys,” Maricopa County School Superintendent Steve Watson said.

“I think it was a great mobilization and movement by the teachers, and it wasn’t just teachers,” Watson said. “It was community members. My kids wore red to school on Wednesdays to show their support and gratitude for teachers. So I think it was the teachers’ ability not just to mobilize themselves, but the entire community.”

Even if education advocates do get on board with Ducey’s proposal, there’s still a chance that lawmakers could tweak the plans as they hash out the state budget.

Ducey, Garcia debate centers on education

In the first gubernatorial debate, Gov. Doug Ducey touted a record of improving the state’s economy and providing 20-percent pay raises to teachers while Democrat David Garcia accused him of breaking promises and leaving Arizona’s education system in crisis.

While Ducey and Garcia’s hourlong verbal grudge match on KAET-TV, the Phoenix PBS station, centered predominantly on education, the candidates addressed a myriad of other issues such as border security, the economy and a now defunct ballot initiative that would have increased taxes on the rich to better fund K-12 education.

Ducey repeatedly accused his opponent of lacking an education plan. The governor did not present any details of what he would do for K-12 funding with a second, four-year term, but he did tout education highlights from his first term and said he would divert more state funding to education in his second term.

During the debate and in a follow up interview with reporters, Garcia failed to provide specific details on an education plan. He said only that education needs a permanent funding source and that he would allow Arizonans to have a say on the plan at the ballot box.

“I want to go to the Legislature and challenge them and work with them and the business community to put an initiative on the ballot,” he said.

Garcia also questioned why so much of the debate was centered on the Invest in Education Act — a defunct ballot initiative to boost education funding that Garcia supported since its inception in April. The citizens initiative, which would have boosted taxes on the state’s top earners was a major prong of Garcia’s K-12 education plan.

He would not say if the ballot initiative he wants to push through the Legislature would be the same or similar to the Invest in Education Act.

Ducey said the citizens initiative, which the Arizona Supreme Court struck from the ballot last month, would have driven Arizona’s economy off a cliff.

When Garcia said the initiative was torpedoed by Ducey’s “stacked” Supreme Court, the governor accused his opponent of trying to “rig” the election with the misleading language of the Invest in Education Act.

Accused of not doing enough for education, Ducey touted signing an extension of Proposition 301, which extended a sales tax for school funding, and praised Proposition 123, which increased school funding disbursements from the state land trust. And he stood by his budget that granted teachers 20 percent raises spread out over three years.

Garcia called Ducey’s first term a slew of half-measures and broken promises.

“We had a crisis when Doug Ducey walked into office, and we have a crisis when he’s leaving office,” he said.

Ducey argued he couldn’t be held accountable for decades of poor education funding in Arizona, but said he would take responsibility for the past four years. He also stressed the state’s dire financial outlook upon his entering office right after the Great Recession.

“I was in a straightjacket four years ago with a $1 billion deficit in our state budget,” Ducey said.

He repeatedly touted that Maricopa County is now the fastest growing county in the country.

Garcia accused Ducey of being a weak leader who only commits to policy changes when feeling the political pressure of an election year.

He pointed to Ducey’s newfound support for charter school reform after legislative Democrats have called for changes for years. Garcia also cited Ducey’s change of heart on teacher pay raises after teachers threatened to strike amidst the “Red for Ed” movement.

“I want a governor who will lead and not follow,” Garcia said.

Ducey pushed back, citing previous investments in education. He also said he boosted proposed pay raises for teachers when he saw a major influx of funding coming into the state coffers. He initially proposed 1-percent pay raises for teachers this year.

Garcia touted signing the “Red for Ed” pledge promising to boost education funding and asked Ducey if he would do the same.

“What I have signed is a budget that will deliver them a 20-percent pay increase,” Ducey said. “I don’t sign activist pledges. I sign state budgets.”

On immigration, Garcia pushed back against a narrative pushed by the GOP that he is soft on border security and said he does not want to abolish the United States Immigration and Customs Enforcement agency nor has he called for open borders.

Garcia has called for a top-to-bottom reform of ICE, but he doesn’t want to do away with the agency.

“To give this idea that in any way, I would make for unsafe conditions for Arizona is against who I am,” Garcia said, citing his service in the U.S. Army.

Garcia stood firm in his opposition to President Donald Trump’s border wall and called for 24-hour, seven-day-a-week border security. He cited a recent Arizona Republic article that said the Border Strike Force, which Ducey’s administration created, has not achieved round-the-clock border security like Ducey had previously promised.

Ducey defended the Border Strike Force, saying the border is under constant watch with the help of the strike force and local law enforcement.

He also attacked Garcia for previously calling to remove U.S. National Guard forces from the border and pledging to eliminate the Border Strike Force.

“This is a really radical departure from what public safety has been in the state of Arizona,” Ducey said.

Green Party candidate Angel Torres also took part in the debate, stressing the need to grow the economy for people at the bottom. He also proposed reforms to make it easier for workers to unionize.

Education ballot measure no place for obscurity, euphemism

(Photo by Ryan Cook/RJ Cook Photography)

In what some education supporters see as a cruel blow, the Superior Court recently denied placement of the Invest in Ed measure on the November 2020 ballot. Calling the summary of the initiative “legally insufficient,” the pointed opinion stated that the description “does not accurately describe the Initiative’s principal provisions without the substantial risk of confusion for a reasonable Arizona voter.” The initiative’s supporters are appealing the decision to the state Supreme Court.

The business community is justified in their concern over the lack of disclosure provided to voters on Invest in Ed. Blithely posed as a “surcharge” on individual income taxes, the direct impacts to business are significant and widespread. Among Arizona’s more than 570,000 small businesses, estimates suggest that 40% to 50% of those impacted by the tax increase will be business owners who legally file their taxes as individuals rather than as corporations. The marginal rate change (from 4.5% to 8.0%) represents about a 77% increase in their top tax rate. Without appropriate summary, voters are left on their own to interpolate the measure’s meaning, reach and consequence. They will find no illumination from the Invest in Ed website, which provides only relative and comparative tax data and fails to calculate or estimate actual impacts.

Arizona education leaders are well acquainted with legal obligations and expectations to communicate openly and transparently with the public. For instance, informational pamphlets for bond elections must include specifics on the tax impacts to business owners as well as individual homeowners. In other communications with the public, school officials are advised that when discussing or considering school matters, which can be complex, information provided must be “sufficiently descriptive to inform the average, off-the-street person.”

The ballot is no place for obscurity and euphemism. Nor is soft pedaling to voters even necessary. Arizonans have a solid record of funding education at the ballot box, even when they are told clearly and directly that they will be paying more in taxes and shown how.

In 2000, Arizona voters supported Proposition 301, which imposed a new sales tax predominantly benefitting K-12 education, providing monies to fund teacher pay, classroom size reductions and students support programs like tutoring and dropout prevention. In 2010, Arizona voters passed a temporary additional sales tax through Proposition 100 to provide nearly $1 billion in funding to protect education budgets during the Great Recession. Although it involved changing a constitutional formula rather than raising taxes, voters in 2016 approved Prop 123 to increase distributions from state land trust earnings to raise K-12 per-pupil spending and add an estimated $3.5 billion over ten years.

Notably, those ballot measures were led and funded by a broad coalition of Arizona business and education interests, working together with elected officials in the best interest of our public schools, teachers and students. As a result, they faced little opposition due to extensive efforts to bring together diverse stakeholders in a bipartisan fashion.

In contrast, Invest in Ed has been organized and underwritten by a narrow set of special interests located outside Arizona. Campaign finance reports show that as of June 30 over $4 million has been raised to pay for campaign workers’ salaries and benefits, as well as political activities like signature gathering and text message outreach. Nearly all of that funding – over 85% – has come from a single organization located in Portland, Oregon.

Arizona’s Voter Protection Act creates a compelling reason for activists to go to the ballot rather than the Legislature to lockbox their efforts. Passed by legislative initiative in 1998, Proposition 105 immunizes measures passed at the ballot from gubernatorial veto or legislative diversion. Those who seek to change Arizona’s Constitution, laws and appropriations through the voting booth should not be surprised to find their efforts facing extra scrutiny given the act’s protective shield.

For their part, Arizona education advocates are understandably worried that calling a halt on the Invest in Ed initiative will end the conversation on school funding. They shouldn’t be so pessimistic. For at least a decade, Arizonans have said more money should be spent on schools and the majority are willing to pay more in taxes. They also want their hard-earned money spent efficiently.

Despite the legal battle underway, Arizona business leaders support spending for teachers and schools. Arizona business leaders supported the “20 by 2020” plan introduced by Governor Ducey and passed by the Legislature to raise teacher salaries 20% by 2020. It cannot be overlooked that Arizona business supported teachers and school personnel continuing to get paid even while schools were closed due to COVID, while their own employees have gone without work and without pay. Ignoring these efforts, out-of-state forces instead imported Invest in Ed to Arizona in 2018 and again in 2020, refusing to set aside their agenda even amid the hardships caused by a global pandemic.

Should the Supreme Court uphold the lower court’s decision, rest assured there will be Arizona business leaders who step forward, willing to create a more robust and comprehensive school funding plan without the threat of economic harm.

It’s time for a more modern, more sensible approach to school finance – one that is Arizona led, and Arizona backed – and that will generate revenue from more reliable resources to support schools and teachers. Beyond shoring up per-pupil spending levels, the plan must make funding allocations among schools more equitable and result in greater academic achievement for all students. Spending equity and tax equity go hand in hand in Arizona school finance, so the plan likewise should update our tax code and spur additional business investment that grows Arizona’s economy and personal income for its residents, not stifle their prosperity.

Working together, Arizona business and education leaders have the opportunity to make our state the best place to educate a student, whether they attend a public K-12 school, community college or university. The millions being spent on court battles on both sides could be put to better use by funding an inclusive stakeholder process to keep Arizona voters from going through this conflict again in future election cycles.

Meanwhile, no one should argue that Arizona voters deserve straight talk when it comes to their ballots and their pocketbooks. Back in Oregon, the commanders of Invest in Ed might heed the wisdom of Chief Joseph of the Nez Perce, a revered leader and forefather of the lands that belong to their state, “It does not require many words to speak the truth.”

Eileen Klein is the owner of a small businesses in Arizona. Her public service includes serving as the 35^th state treasurer of Arizona and chief of staff to Governor Janice K. Brewer. Eileen is past president of the Arizona Board of Regents and a former member of the State Board of Education.

Education tax-hike proposal gets warm reception in committee

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.

House Speaker gives tax increase proposal cool reception

House Speaker J.D. Mesnard (Photo by Rachel Leingang, Arizona Capitol Times)

Business leaders say they’re putting a measure to expand an education sales tax on the ballot in 2020 with the Legislature’s help or not.

But House Speaker J.D. Mesnard, R-Chandler, said an all-or-nothing approach to the future of a sales tax benefitting public schools would present “a high-risk scenario that just is unwise.”

In June, a group of business leaders that includes former State Board of Education President Reginald Ballantyne III proposed increasing the voter-approved 0.6-percent sales tax to 1.5 percent. Proposition 301, approved by voters in 2000, is set to expire in 2021, and the businessmen have drafted legislation to save it.

Their plan includes $340 million for teacher pay, $240 million to fund full-day kindergarten, $300 million for capital funding and $190 million in support for the state’s public universities.

Mesnard said the group is likely to find widespread support for an extension for Prop. 301, but in expanding it, they’re also likely to draw a fight.

“You’re going to see folks like myself and others who will explore every means possible to get additional resources before getting to a tax increase,” he said. “And there will be some, and I might be one of those, who will still not embrace that even as a last resort. Not because we don’t care about K-12 and don’t consider it a priority… but it’s no small thing when you’re taking more money from the general public.”

If history is any indication, Mesnard said, he won’t be alone in opposing the idea.

Gov. Doug Ducey certainly wouldn’t be among enthusiastic advocates for an increase.

“He doesn’t support raising taxes,” Ducey spokesman Daniel Scarpinato told Capitol Media Services Wednesday.

The governor has told the heads of state agencies to find ways to save money in their budgets instead, the idea being to redirect the savings to the K-12 budget.

“We all care about education, and you’re going to have a plethora of different ideas as to what caring about education looks like,” Mesnard said, whether that means additional resources or if room can be made in the current budget.

Mesnard said he hasn’t “detected any deep conversations” between his Capitol colleagues and the business leaders proposing the expansion. But their focus on 2020 seems to indicate to him that they’re trying to start a dialogue.

“As an incrementalist myself, I can appreciate starting a conversation and then taking some time, even multiple years to fine tune the right approach,” he said. “I’m just not familiar with what they’re proposing policy-wise. I’m only aware of the tax-increase suggestion.”

Sen. Kate Brophy McGee, R-Phoenix, attended a presentation of the business coalition’s plan on Dec. 12. She was encouraged by their engagement on the issue of K-12 funding, but she saw the plan as more of starting point and certainly not the last word on the matter.

“The more public conversations we have, the better it is in terms of moving some kind of initiative down the path,” she said. “The education interests can fight each other – they do fight each other at times – so anything we can do to build unity around an idea is really good.”

Brophy McGee was first politically active in the school board arena right around the time Prop. 301 first made an appearance.

She said she hasn’t seen the same level of grassroots enthusiasm since then, but she sees inklings of something like it in the push to do something sustainable for education.

Like Mesnard, though, she predicted the tax increase would be a tough sell.

“But it’s like our roads and infrastructure. It’s like other essential services that government provides,” she said. “We have been pushing that down to the local level, and at some point, we need to make a decision about governing and what we’re are responsible to provide. And the only way we’re going to do that is to get to the table and duke it out.”

Howard Fischer of Capitol Media Services contributed to this report.

Legislature passes education sales-tax extension

Arizona lawmakers voted to extend a sales tax that helps fund public education, ensuring that more than $600 million in state revenues earmarked for schools will continue for another two decades.

The bill to extend Proposition 301 was fast tracked through the Senate and voted out of the House on Thursday afternoon amid mounting pressure from educators who have protested at the Capitol over inadequate funding for public schools.

Revenues from Prop. 301, a six-tenths of a cent sales tax approved by voters in 2000, provide funding for teacher pay and performance-based raises, among other education-related expenses.

If not extended, the sales tax is set to expire in June 2021. As approved by the House and Senate, SB 1390 ensures the tax will continue through June 2041.

Gov. Doug Ducey (Photo by Katie Campbell/Arizona Capitol Times)

A spokesman for Gov. Doug Ducey said he would sign the measure.

SB 1390 also moves a larger portion of Prop. 301 dollars into the classroom site fund, which provides a boost to teacher salaries. By 2021, debt payments being made with Prop. 301 revenues will be settled, and the roughly $64 million annually going towards debt service will instead go towards teacher salaries.

Some Republican lawmakers opposed the measure to extend Prop. 301. The original proposition was approved by voters, and should be extended by voters if they so choose, said Sen. Steve Smith, R-Maricopa.

Rep. Eddie Farnsworth, R-Gilbert, said he simply thinks Prop. 301 is bad policy.

“I don’t know how I can vote for a tax continuation, or a new tax, however you want to characterize it… when I don’t agree with the policy,” Farnsworth said.

As Farnsworth alluded to, Republicans had to weigh whether extending Prop. 301 amounted to a vote for a tax hike. Technically, the vote was for an increase in state revenues, which triggers a provision in Arizona’s Constitution requiring a two-thirds majority to approve bills that “provide a net increase in state revenues.”

Most Republicans in Arizona have vowed to never raise taxes — among them, Ducey.

But a majority of Republican lawmakers joined all Democrats in both chambers to overwhelmingly approve the bill and avoid the risk of teachers losing all those dollars generated by Prop. 301.

The bill passed 26-4 in the Senate and 53-6 in the House.

Senate Minority Leader Katie Hobbs, D-Phoenix, called passing SB 1390 “the right thing to do to create some level of certainty with this important source of funding for our schools.”

The sponsor of SB 1390, Phoenix Republican Sen. Kate Brophy McGee, vowed that extending the Prop. 301 sales tax was simply the first step in a broader conversation about the next Prop. 301 — a new infusion of public money for K-12 schools.

Senate President Steve Yarbrough (R-Chandler) (Photo by Katie Campbell/Arizona Capitol Times)

While Democrats warned against future legislators tinkering with the sales tax revenues, something Senate President Steve Yarbrough, R-Chandler, and others have sought to do, Yarbrough said lawmakers should applaud the bipartisan vote.

“Rather than fretting, I would recommend celebrating,” Yarbrough said. “This is a good day for public education in Arizona.”

Plan to place education tax increase on ballot could spark battle

A plan by business leaders to ask voters for a 1.5-cent sales tax hike for education at the 2020 ballot could set the stage for a possibly expensive battle with Gov. Doug Ducey and his Koch brothers allies — assuming Ducey is still in office at that point.

The specifics of the plan, first proposed earlier this year, include $660 million to extend the 0.6-cent sales tax that voters first approved in 2000 as Proposition 301 to fund education. That levy will self-destruct in 2021 unless specifically reauthorized.

Ducey has already said he supports making that tax permanent.

But this plan also includes $340 million for a 10 percent increase teacher pay. That compares with the 1.06 percent pay hike lawmakers approved for this year with a promise of an identical amount next year.

There’s also $300 million to fund the formula, ignored for years by the governor and lawmakers, which is supposed to pay for new school construction and repairs.

Another $240 million would restore state funding for full-day kindergarten, dollars eliminated during the recession.

And there were would be $190 million to help restore some of the cuts made in funding for universities.

Ducey, for his part, remains opposed to anything more than the simple extension of the 0.6-cent tax.

“He doesn’t support raising taxes,” press aide Daniel Scarpinato said Wednesday. Instead, the governor has told state agencies chiefs to find ways to save money in their budgets with the idea of redirecting the dollars to K-12 education.

Ducey has a track record fighting against higher taxes for education. As state treasurer he led the successful 2012 fight against an initiative pushed by parents and educators to make permanent a temporary one-cent sales tax increase which voters had approved two years earlier.

Potentially more significant, he has shown an ability to tap financiers Charles and David Koch to fund such efforts. More than half the nearly $1.8 million Ducey spent to kill the ballot measure came from Americans for Responsible Leadership, a group that legal filings from other states revealed got its money from a Koch-financed organization.

Two years later, Ducey got elected with the help of Koch-based organizations which put more than $750,000 into ads targeting Democrat candidate Fred DuVal and spent another $650,000 promoting Ducey. Since that time Ducey has regularly attended retreats sponsored by Koch groups promoting their vision of free enteprise.

Phil Francis, the former CEO of PetSmart and one of the leaders of the coalition, said this isn’t about picking a fight with the governor, whom he said he supports. But he said financial data show that much more money is needed than what the state is now spending.

The Joint Legislative Budget Committee showed per-student state aid in the 2007-2008 school year was $4,959. Adjusted for inflation, Francis said, the figure dropped to $3,782 in the 2014-2015 school year. It’s now at $4,157.

He said simply coming up with new ways to divide the money is not the answer.

“We don’t need another vision for education,” Francis said. “We need to act.”

Reginald Ballantyne, the former president of the state Board of Education, is particularly focused on children getting more than 2.5 hours a day in kindergarten, saying it’s “no longer about cookies, coloring and naps.”

“By the end of kindergarten, students (should) understand the organization and basic features of print, blend sound to read written words with fluency and accuracy, and use phonics to write words and express thoughts and ideas in writing,” he said. And Ballantyne said he believes the success of students in higher grades is directly linked to those early years.

Ducey and the business leaders do agree on one thing: Any question about taxes for education should not go to voters next year.

Scarpinato said his boss, who only wants that 0.6-cent extension, believes “it’s going to take a broad coalition, and a lot of voter education” just to get even that approved.

For the business interests, it’s more complex.

Teachers and allies have gathered enough signatures to put a measure on the 2018 ballot to give the voters final say over a plan approved earlier this year by the Republican-controlled Legislature to expand who can get vouchers of state tax dollars to send their children to private and parochial schools.

“That’s going to take attention and money and energy,” Francis said.

He also suggested that statewide races, including Ducey’s own reelection campaign, only add to the “noise” that an education measure would have to overcome.

And there’s something else: To kill that voucher expansion, as the group wants, people have to vote “no.” But it would take a “yes” vote to boost taxes for education, something Francis said could lead to confusion.

Francis said it was a conscious decision to spell out how much of the new tax would go to specific programs rather than simply dump new dollars into the K-12 system. He said these reflect the priorities Ducey has laid out, even if the governor won’t come up with new cash to fund them.

And he said spelling out specifics “so there’s something to discuss instead of fuzzy stuff to hypothesize on.”

Ideally, Francis said, the Republican-controlled Legislature will vote to put the issue on the 2020 ballot. He said that allows lawmakers to keep their vows of never voting for higher taxes as the final decision would be made by the voters.

But Francis said if lawmakers balk the option remains to gather signatures to put the issue on the ballot.

School funding a ticking time bomb

Arizona schools are counting down to a March 1 deadline for the Legislature to override a cap on spending or face not being able to spend $1.1 billion already approved for them.

The cap, known as the aggregate expenditure limit, is determined by a formula enacted in 1980 and since then, raising it has not been a point of contention. The limit typically increases as the state adds new residents and is also adjusted for inflation and enrollment. But the limit – which relies on the previous year’s enrollment – took a hit after K-12 public schools lost roughly 38,000 students last school year due to the Covid pandemic. 

Further exacerbating the problem is the inclusion of Proposition 301 dollars in the funds that count toward the limit. Voters approved the 0.6% sales tax for education in 2000, which would have caused funding to exceed the expenditure limit in the 2001-2002 school year. At that time, legislators referred the issue to the ballot, and voters approved exempting Prop. 301 revenues from the limit. 

However, when legislators renewed the 0.6% sales tax for education in 2018, they did not exempt it from the expenditure limit, which would have again required voter approval. The renewed measure went into effect July 1, 2021. The tax brings in more than $600 million a year for education. 

The $1.1 billion schools won’t be able to spend translates to about a 16% budget cut, said Chuck Essigs, director of governmental relations at the Arizona Association of School Business Officials.

“This is the biggest problem I’ve ever seen,” Essigs said. “We have never had any problem come anywhere close to this reaching the magnitude of this problem.”

Essigs was working in Arizona school finance when the current funding formula was adopted in 1980. If the formula used the current year’s enrollment or if Prop. 301 dollars were still exempt, schools would stand to lose several million dollars, not more than $1 billion, he said. 

Essigs said there was concern that some lawmakers wouldn’t vote to override the limit because of Proposition 208, an initiative voters approved in 2020 to levy an income tax surcharge on the wealthy. But Essigs emphasized that Prop. 208 dollars are not part of the fiscal year 2022 budget. He said he saw no connection between this year’s limit and Prop. 208. 

“If the Legislature were to override the limit in 2022, that doesn’t allow (Prop. 208) dollars to be spent in 2022,” he said. “Because of the way the income tax works, districts won’t start to get any of that money until the following fiscal year.”  

“The tax rates have already been set to fund the budgets that the districts have adopted,” Essigs said.  

As the deadline approaches, Sen. J.D. Mesnard, R-Chandler, said the situation with the aggregate spending limit was “in a state of paralysis” until the Prop. 208 ruling was resolved. Mesnard was a central player in crafting 2021 legislation to sidestep the tax on the wealthy that Prop. 208 would impose. He and House Majority Leader Ben Toma are now looking to repeal and replace the so-called flat tax, which would kill the referendum on it, the legislators acknowledged to The Associated Press last week. 

Mesnard told the Capitol Times there was “a lot of interest” in dealing with the aggregate expenditure limit. He said he was willing to vote to exceed or waive the spending limit “under conditions.” 

“Among other things, I need Prop. 208 to not be a factor,” Mesnard said. “I am certainly not supportive until that is the case.” 

Democratic lobbyist Geoff Esposito said he thinks legislators will eventually override the limit but not before the March deadline – which could prove catastrophic for some schools, he said.  

“We’ve had Republicans who have supported it before, but it is not only tied to the (Prop. 208) fight but to every other pet project that these conservative voices are going to want to leverage to get in education, from critical race theory to masks and vaccines,” he said. 

One Valley school superintendent said his district is in line to lose the ability to spend tens of millions of dollars this year if the Legislature doesn’t act. The superintendent said he has heard from colleagues in other districts who could be forced to close schools temporarily.  

“There have been conversations, and one district said that the impact on their district would be the equivalent of 77 days of instruction … I would argue that a district shouldn’t ask its employees to work without being compensated,” he said.

The state budget the Legislature adopted for fiscal year 2022 automatically included money to fully fund the budget, and those dollars can’t be spent elsewhere because they’ve already been appropriated to education, Essigs said.  

If the Legislature failed to override the limit, Essigs asked what schools were supposed to do with the $1.1 billion they already had coming to them. 

“You’re not saying they can’t raise it; you’re just saying you can’t spend it,” he said. “That doesn’t seem to make a lot of sense.”  

Unlike district schools, charter schools are not subject to the limit because they didn’t exist in Arizona in 1980 when the formula was approved. 

Geoff Esposito (Photo by Ben Giles/Arizona Capitol Times)

Esposito said he believes legislators will eventually raise the limit because “it has to get done,” but not before “schools have to like, start telling parents that they’re going to be shutting down in April and to start to think of child care.”  

In August, the state’s Supreme Court ruled that Prop. 208 revenues were not grants and therefore not exempt from the spending limit.  

“(I)f the trial court finds that (Prop. 208) will result in the accumulation of money that cannot be spent without violating the expenditure limit, it must declare Prop. 208 unconstitutional and enjoin its operation,” Chief Justice Robert Brutinel wrote at the time.  

Stand for Children Executive Director Rebecca Gau said the Arizona Supreme Court’s decision regarding Prop. 208 doesn’t just affect Prop. 208. Stand for Children is one of the organizations that led efforts to get Prop. 208 on the 2020 ballot. 

“Unless that expenditure cap is dealt with permanently, one way or the other, either increased significantly or done away with, then we’re never going to be able to increase school spending to where it needs to be,” she said. 

Beyond overriding the limit, Essigs hopes the Legislature will be proactive in addressing the limit long-term because it’s not a one-year problem. As long as Prop. 301 dollars are included, the limit will be exceeded, he said. 

Essigs said he hopes lawmakers will consider the value of the 40-year-old formula.  

“First, do we even need that limit?” Essigs asked. “In the Constitution, it says that the Legislature shall adopt budget limits for every school district… It’s not like the Legislature can say, ‘Well, we don’t want to put limits on schools anymore.’ They’re required by the Constitution to do that.”  

If the Legislature decides the aggregate limit should continue to exist, Essigs said it should be modernized. To make changes or to rescind the limit, voters would have to approve a constitutional amendment.

“Very rarely do you do something that’s proper and correct four decades after you do it.” he said. “The world changes.” 

Yellow Sheet editor Wayne Schutsky contributed to this report. 

School sales tax extension to be fast-tracked at Legislature

Arizona Senate President Steve Yarbrough said state lawmakers will fast track a bill to permanently extend a sales tax dedicated to public education through both chambers on Thursday.

The Chandler Republican told the Arizona Capitol Times today that measures to extend Proposition 301 in both the state Senate and House of Representatives will get a chance to be voted on and sent to Gov. Doug Ducey’s desk by the end of the day. It’ll take a two-thirds majority vote in each chamber for the bills to be approved.

“I’m actually going to try and drive that thing home by tomorrow afternoon,” Yarbrough said, adding that both chambers are expected to devote most of their energy to those bills on Thursday.

House Speaker J.D. Mesnard, R-Chandler, said it’s possible the House could move in lockstep with the Senate tomorrow, but he’ll need to consult with House lawmakers before setting on that course of action. The bill has “a lot of support” in the House, he said.

If a bill is approved tomorrow and Ducey signs it, that would permanently extend the more than $644 million in annual funding generated by a six-tenths of a cent sales tax for public education that voters approved in 2000.

Prop. 301 revenues provide funding for teacher salaries and performance pay raises. If not extended, the sales tax is set to expire in June 2021.

Yarbrough, like many other Republicans lawmakers in Arizona, has resisted extending Prop. 301 without strings attached, or as Mesnard has said, reforms to the way those sales tax revenues are spent.

That’s put the Republican-controlled Legislature at odds with some in the education community and some business leaders, who’ve threatened to renew the Prop. 301 at the ballot, a move that would make it harder for future lawmakers to tweak the tax and how those revenues are distributed to schools.

It’s better for lawmakers to renew Prop. 301 themselves, Yarbrough said, because it ensures they’ll be able to “tinker” with those revenues in the future.

However, there will be one alteration to the revenue distribution in the bills, Yarbrough said.

A portion of Prop. 301 dollars helps pay debt for school facilities. Once the debt is paid, that portion of Prop. 301 revenues would be redistributed to the classroom site fund, which provides dollars to boost teacher salaries.

Roughly $64 million went to debt service payments in fiscal year 2017, according to figures from the State Treasurer’s Office.

The bills to renew Prop. 301 were given new life earlier this week, when House Speaker J.D. Mesnard, R-Chandler, withdrew HB 2158, sponsored by Rep. Doug Coleman, R-Apache Junction, from a committee assignment that blocked the bill’s path to a vote on the House floor.

In the Senate, SB 1390, sponsored by Sen. Kate Brophy McGee, R-Phoenix, is scheduled for a hearing in the Senate Education Committee Thursday morning. If all goes according to plan, Yarbrough said the bill would receive votes on the floor that afternoon.

It’ll take a two-thirds majority vote in each chamber for the bills to be approved.

Speaker gives bill to extend education sales tax new life

A bill seeking to permanently extend a sales tax dedicated to public education is getting a second chance in the Arizona House.

House Speaker J.D. Mesnard, R-Chandler, announced today on the House floor that he would be withdrawing HB2158 from the House Ways and Means Committee.

The move removes a legislative obstacle to the bill and breathes new life into an effort to extend Proposition 301, a six-tenths of a cent sales tax passed by voters in 2000, which funds teacher salary and performance pay.

The tax, which generates more than $644 million in annual funding for public school, is set to expire on June 30, 2021, if it isn’t renewed.

The bill, sponsored by Rep. Doug Coleman, R-Apache Junction, was double assigned to the House Education and Ways and Means committees. Though it was approved by the House Education Committee, 9-1, on Feb. 13, the measure stalled after Rep. Michelle Ugenti-Rita, R-Scottsdale, failed to hear it in Ways and Means.

By withdrawing the bill from the committee, it will allow it to continue moving through the legislative process and get a vote on the House floor.

A mirror bill introduced in the Senate by Phoenix Republican Kate Brophy McGee, SB1390, which had 56 cosponsors, was never heard in either Senate committee it was assigned to.

Coleman and Mesnard did not immediately return a request for comment.

Split widens between business and education communities

After working together to pump $3.5 billion over a decade into the public education system, the business and education communities find themselves once more at odds following the latest actions at the Arizona Legislature.

The schism has the potential to threaten not only the extension of Proposition 301, the voter-approved tax increase that provides roughly $650 million a year in resources for Arizona schools, but also future initiatives meant to carve a successful path for K-12 education.

The immediate worry revolves around Prop. 301, which is set to expire in June 2021. Some fear that time is slipping, as the groundwork needed to push its extension – or maybe even expansion – has scarcely begun.

Chuck Essigs (Photo by Gary Grado, Arizona Capitol Times)

“I’m not sure people fully appreciate how short the time is to get it (Prop. 301) reauthorized,” said Chuck Essigs, lobbyist for the Arizona Association of School Business Officials.

And while leaders from both the education and business communities agree the tax must continue, they disagree on the status of their relationship.

With Gov. Doug Ducey at the helm, the business and education communities, two of the most influential groups in K-12 policy, had forged an alliance to pass Prop. 123 in 2016, and its success at the ballot box gave educators hope they would have a seat at the table when crafting future education policy.

But K-12 advocates said that hope was dashed following this year’s legislative session, when legislators did little to address issues school advocates raised and instead passed policies they opposed.

They said the teacher pay hikes that Ducey boasted of, for example, failed to even match inflation since the last teacher raise. Similarly, they argued, merit-based funding for schools, which lawmakers approved and which was backed by the Arizona Chamber of Commerce and Industry, is ineffective in solving public education funding issues.

But business leaders said their relationship with the K-12 community is “very, very strong.”

“The business community is more engaged now than it has been, maybe ever, in efforts to align our education system with skills that are necessary for a productive workforce,” said Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry.

Indeed, while the business community has always had a robust education agenda, it has aggressively been pushing policies in the last several years.

Notably, business leaders lobbied hard for legislators to restore funding for career and technical education, and by the time the restoration legislation was approved, lawmakers were clambering over each other to get credit for it.

While the business community and K-12 advocates agree on overarching goals, such as better education outcomes and more money for teachers and low-income schools, they differ on paths to get there.

Dick Foreman, president of the Arizona Business and Education Coalition, said “inclusive” was not an adjective he would use to describe the 2016-2017 legislative session.

Foreman agreed that while school leaders were open to discussions about education policy, they were not invited to the table.

However, Foreman recognized that the business community is “sensitive, aware and interested in public education.”

Unfortunately, he added, there is very little opportunity for CEOs and superintendents to communicate on what he considers a level playing field.

Foreman attributed this unequal playing field to differing worldviews. He said CEOs are worried about making profitable decisions, and superintendents are concerned with pleasing teachers.

The relationship between the business community and the education community, Foreman added, is the “same as it always has been, mostly favorable on the surface, but not having a clue what goes on under that surface.”

The schism between the K-12 and the business communities revolves around familiar issues of controversy.

The business community pushed for merit-based funding, which public school advocates believe only favor certain schools, notably charters.

Chris Kotterman, director of governmental relations for the Arizona School Boards Association, said the merit-based funding is “disproportionately awarded to certain charter schools that do very well on standardized tests.”

But Hamer, the chamber official, denies preference for any schools.

“The business community is nondenominational when it comes to educational performance,” he said.

Lisa Graham Keegan, CEO of A for Arizona, also said the business community’s intention is to support schools that aid low-income students and produce students with the skillsets necessary to build a successful workforce and attract businesses to Arizona.

She attributed what she calls a “fast-paced moment” in Arizona’s education history to the “instinct” business leaders bring to schools.

The business community also successfully pushed for the expansion of a controversial voucher program, in which the state provides funding for a child’s private education.

Once limited to certain populations like children with disabilities, lawmakers this year opened up the program to all pupils, albeit enrollment is still capped to roughly 5,000 new students a year.

Kotterman called voucher expansion a “gut-check to true public education advocates,” which he said made clear that the business community is interested in making decisions that benefit their members, with little regard to the education community.

“When your primary economic policy is maintaining low taxes, you’re going to run into problem with institutions that depend on taxpayer support,” Kotterman said. “It does feel like they’re (business community) picking sides… and what they’re picking is a very specific model that advantages schools of choice over traditional district schools.”

Many believe that, in the end, public education advocates and business leaders would have to reconcile their differences, or at least set them aside, in order to push big initiatives.

Daniel Scarpinato, who speaks for the governor, said the success of Prop. 123 last year illustrated what can be achieved when these two groups get on the same page.

“There’s no way that you could have seen such a significant policy like that move through without real cooperation on that end,” Scarpinato said.

He noted that throughout the state’s history, monumental policies in education only happened when the business community and the K-12 advocates hunkered down together.

Ducey is keen on having these two groups work together, particularly because he is pushing big initiatives, such as the ambitious goal of having 60 percent of Arizona’s adults with a professional certificate or college degree by 2030.

More immediately, Ducey wants a “new Prop. 301.”

That reality, shared by many, will only come through if the business and education communities are on the same page, Scarpinato said.

“I don’t think one group can move this on their own,” he said. “And it’s critical, from the governor’s perspective, that there is something next on that because he didn’t fight so hard to resolve the lawsuit and pass Prop. 123 for us to then face a funding cliff.”

While not all parties will agree on every issue, what has to happen next is clear – groups must recognize the achievements that have been accomplished when “we partner,” and coalesce around policies that truly matter, Scarpinato said.

“We have every expectation it will [happen],” he said. “We really feel like we have a potential to come together again on some big issues next session and moving forward.”

But as Scarpinato recommends a unified front, some suggest that parting ways with certain elements of the business community, while cultivating collaboration with others, might be the most viable path for education advocates.

Essigs, who lobbies for school business officials, said he’s optimistic that business and education interests can work together in the future, adding he believes the schism isn’t so much between education groups and the business community at large, but with the Arizona Chamber of Commerce and Industry.

“Just because (Hamer) says there isn’t doesn’t mean that there isn’t,” Essigs said. “That could lead to a real pessimistic look, but I’m optimistic because I can see other people in the business community are looking at things differently.”

Essigs pointed to groups like the Arizona Business and Education Coalition, as well as local business groups and chambers of commerce, as evidence there are some in the business community who support the goals of education groups like his own.

He said people need to understand differences of opinion exist in the business community, and the path forward requires separating the Arizona Chamber of Commerce from the business community at large.

As long as the state chamber ignores the true needs of schools and the perception that poorly funded schools creates, the education community has no choice but to move forward without them, Essigs said.

“At this point in time, our only choice is to work with and corroborate with the business community that is supportive of public schools,” Essigs said. That would be business groups that, he said, “seem to recognize the problem and realize that, if we want to move forward as a state, and really make some progress, we’re going to have to address how to fund our schools.”

Reporter Ben Giles contributed to this article

State ramps up study of Valley Fever, ozone

A new partnership between the state’s three universities and several state agencies aims to increase understanding of issues like Valley Fever and ozone levels in Arizona – and come up with solutions.

The Arizona Board of Regents announced new Regents’ Grants for five three-year research projects in April, allocating a total of about $12 million from its Technology and Research Initiative Fund. The funding comes from sales tax revenue generated by Proposition 301.

Regent Fred DuVal, who chairs the Board of Regents Research and Health Sciences Committee, said the grants came about after he reached out to Gov. Doug Ducey and discussed making universities the state’s “think tank.” While state agencies may occasionally tap into university research, DuVal said the board wants to make that collaboration systemic.

Beyond looking at Valley Fever and the ozone, other research groups are tackling “forever chemicals” – waste management for abandoned Arizona mines and economical recycling. The five projects were selected from a total of 17 proposals state agencies submitted for the first round of grants.

“There are things the state government needs to solve for which they do not have the intellectual capital to solve,” DuVal said.

The Arizona Department of Environmental Quality in particular, DuVal said, has a variety of vexing problems for which they lack resources.

ADEQ Director Misael Cabrera said, “We started with defining the problems. There’s an old adage that says a well-defined problem is a good distance into being solved.”

Cabrera said he hopes the projects will lead to some of the researchers’ findings being implemented through technology or policy.

“I believe it’s brilliant to establish a fund that enables collaboration on some of Arizona’s most pressing needs,” Cabrera said. “And I really, really like the fact that the approach combines practical problem-solving with robust research.”

Dr. John Galgiani, professor at the University of Arizona and director of the Valley Fever Center for Excellence, is also working on Valley Fever research funded by the Technology and Research Initiative Fund. The funding comes from sales tax revenue generated by Proposition 301. PHOTO COURTESY UA

Bridget Barker, an associate professor of biology at Northern Arizona University, has focused on Valley Fever for 20 years. She was first convinced of the fungal infection’s importance when she worked as a technician under Dr. John Galgiani, who is also working on the Valley Fever project and is a professor at the University of Arizona and director of the Valley Fever Center for Excellence.

Barker said the Regents’ Grant creates the first opportunity to bring together a large group of researchers to do a more in-depth survey of the Coccidioides posadasii fungus’ hotspots and work to better understand the fungus’ source and transmission.

“Does it change from month to month? Is (the fungus) there all the time? Is it there at higher amounts at certain times of the year?” Barker asked.

The project is a collaboration among Arizona State University, Northern Arizona University, University of Arizona, ADEQ and Arizona Department of Health Services.

Different researchers will work on different aspects of the issue — from examining the soil and the fungus’ DNA to looking at the air at those sites and ways to suppress the formation of the dust that carries the fungus. Barker said they want to see what connection exists between the soil component and atmospheric release.

“When we have high fungal burden in the soil, do we also see high fungal burden in our air collectors, or are they decoupled?” she said. “That’s something that we really don’t know at all.”

Being competitive for funding is often difficult for Valley Fever research because the topic is so understudied, Barker said. Much of the work is pulled together through small grants, $5,000 or $10,000 at a time. She said she hopes the boost of $4.5 million over the next three years will give researchers a chance to gather the preliminary data needed to be competitive for bigger grants.

Another group of researchers from UofA, Arizona State University and ADEQ will spend the next three years studying how Arizona’s natural environment and possible sources of ozone affect how ozone is produced in the state.

The researchers want to better predict and control pollution. High levels of pollution are linked to more asthma attacks, other respiratory issues and hospital admissions and increased daily mortality. The researchers noted that Arizona has a large population of older adults, who are particularly vulnerable to ozone’s effects on health.

UofA associate professor Avelino Arellano and professor Armin Sorooshian are part of the research team.

“It’s a statewide problem. Air pollution doesn’t really have boundaries — it comes from anywhere,” Sorooshian said. “The more people that can work on this together with all their various tools, the better off we’ll be.”

Arellano and Sorooshian said that by the end of the third year, they would like to have an improved predictive capability to pinpoint what ozone sources or precursors drive the exceedances in ozone in Arizona.

“Is it the human activities, or is it the vegetation and unique vegetation in Arizona that needs to be really understood?” Arellano asked.

In addition to collaborating with other researchers, Arellano and Sorooshian were excited to involve their students in the project, which the Board of Regents allocated $2.8 million over three years.

“We’ll be training quite a few graduate students who we hope can continue this work and even go work at places that are collecting these data and making the big decisions like at ADEQ,” Sorooshian said. “This would be a nice feeder to train people to go to these types of places and contribute even more to the state.”

Correction: A previous version of this story inadvertently left Arizona State University off the list of participants in the project.

Tax-hike plan from conservative changes school-funding debate

Sen. Sylvia Allen (Photo by Evan Wyloge/Arizona Capitol Times)

Pigs aren’t flying.

But it’s probably worth another look out the window, just to check, now that a conservative Republican proposed raising taxes in Arizona.

Sen. Sylvia Allen, the typically anti-tax lawmaker from Snowflake, sponsored legislation asking voters to raise a 0.6-cent sales tax earmarked for education to a full penny. So, too, will Sen. Kate Brophy McGee, a Phoenix Republican who also sees a penny sales tax as the best solution to provide new revenues for education, particularly K-12 schools devastated by recession-era cuts to funding.

That Brophy McGee, considered a moderate Republican by Arizona’s right-leaning standards, would propose a tax hike is less surprising.

That Allen would do the same is a shock to some, though a welcome one.

After all, it was less than two years ago that Allen penned an op-ed in The Arizona Republic asking, when it comes to funding education, “when is it ever enough?” Voters don’t want higher taxes, she wrote, and the state already spends more than half its budget on education.

Allen acknowledged it’s strange she now sponsors a tax hike. She told the Arizona Capitol Times that while she’s been irked by the constant drumbeat for more school funding, she’s admitting it’s needed, and she’s known that for a long time. She has contemplated a sales tax hike for more than three years, but never felt like that effort would garner enough support.

Allen’s assessment isn’t wrong. It took a Herculean effort in 2018, spearheaded by Brophy McGee and former GOP Rep. Doug Coleman, for lawmakers to vote for just an extension of the 0.6-cent sales tax, which generates more than $700 million annually for K-12 schools, universities, community colleges and workforce development programs.

Known as Proposition 301, the tax was due to expire in June 2021. Most lawmakers, Allen among them, voted to continue charging the tax another two decades, after most Republicans spent years resisting the effort, or at least delaying a decision on whether to extend it.

That was then, this is now, Allen said, and now is the time to ask the people to raise the sales tax once more.

“And that’s because I believe the economy can do it,” Allen told the Capitol Times. “It wasn’t that we didn’t need more money. The question was, can the people give us more money? … It’s not me not giving you more money. It’s me going to the people and asking them to give more money.”

Her proposal, if approved by the Legislature, would send the question of a tax hike to the ballot in 2020. And if approved by voters, the higher tax rate would take effect in July 2021, immediately after the original voter-approved sales tax expires at the end of June that same year.

“I will admit, (education) can use it,” Allen said.

That’s music to the ears of education advocates like Chuck Essigs, among those guilty of drawing Allen’s ire for beating the drum for new revenues for education. As the lobbyist for the Arizona Association of School Business Officials, Essigs sees Allen’s proposal as a significant shift in the debate over education funding, particularly for K-12 schools.

Instead of arguing that more funding is necessary, the discussion, led in part by a staunch conservative like Allen, now focuses on what amount of new revenue is enough for schools.

“Now we’re talking about, is this increase something that can really change how K-12 operates?” Essigs said. “It changes the focus of the discussion to what’s the best way of doing it.”

Sen. David Bradley, a Democrat from Tucson and the next Senate minority leader, agreed it’s significant that someone from the staunch conservative wing of the Republican Party is proposing a tax increase. He attributed the change to the 2018 election, when Democrats gained seats in the House of Representatives and won key races for statewide offices.

“Hopefully they’re getting the message that people want to see this done differently,” Bradley said. “And let’s do it differently.”

Bradley appears to have a key ally in that effort: Prescott Republican Sen. Karen Fann, who on January 14 will be sworn in as the next Senate president.

“I support sending a penny to the ballot in 2020 to increase funding for our children’s education,” Fann said at an education-themed luncheon January 10, where she credited Allen and Brophy McGee for their efforts.

That statement draws Fann in stark contrast to previous GOP leaders who closely toed the party’s anti-tax line.

Fann told the Capitol Times she’s “so proud of Senator Allen for stepping up and wanting to take this challenge on,” adding that new revenues would help ensure that promises made, such as teacher pay raises, are kept. And while some lawmakers and voters are averse to any new taxes – Fann herself described taxes as “higher than they should be” – she also said the reality is vital government functions need better funding.

That Allen, who Fann described as an “extremely conservative Republican,” got out in front of the issue is a game-changer, Fann said.

“Nine times out of ten, if there’s something that has anything to do with raising taxes, she has always been a ‘no’ on that because she is conservative,” Fann said. “Education is very dear to her heart … (Allen) understands that there just isn’t enough money to fund the basic necessities in education.”

Boosting the sales tax is not without its obstacles, Fann said. Some voters will reject a tax increase, and so will their legislators. Others will say it’s not sufficient, and taxes should be raised even more.

“We’re already hearing those rumblings,” Fann said.

Then there’s Gov. Doug Ducey, who in his inaugural address promised to reject calls to raise taxes.

By referring the tax hike to voters, Allen’s plan bypasses the governor, but that’s not to say Ducey won’t campaign against the measure in 2020. As state treasurer, Ducey was a key cog against efforts in 2012 to permanently renew a 1-cent sales tax for education and other issues.

And Ducey has warned business leaders keen on boosting education funding – who in the past have floated ideas similar to Allen’s – against referring a tax hike to the ballot.

Allen’s proposal may also face competition from her own caucus. Brophy McGee, one of two Republicans who helped shepherd the Prop. 301 extension through the Legislature in 2018, has spent her legislative break meeting with various education interests and advocating for a “new Prop. 301” on top of the extended tax.

Brophy McGee said she’s drafting her own legislation to hike the sales tax. Both proposals bear the same fundamental change: The senators want voters to decide whether to increase the tax to a penny.

Where they may differ is how the money should be spent.

Allen’s plan would consolidate the distribution of those Prop. 301 dollars, leaving community colleges and universities with a larger proportion of funding than they now receive under existing rules. Based on conversations she’s had with education leaders, Brophy McGee said some interests would oppose Allen’s plan if it meant their share of Prop. 301 funding shrinks.

For example, Arizona State University President Michael Crow said he’s supportive in concept of Allen’s proposal, which would ease the tuition burden for Arizona residents attending public universities. But he also told the Capitol Times he’s in favor of ensuring continued funding for research and technology, for which Prop. 301 now earmarks roughly $80 million. Allen’s plan sweeps those funds away.

Nonetheless, the fact that another Republican proposed a tax hike is a welcome change at the Capitol, Brophy McGee said. And she’s confident that Allen’s proposal can be merged with the input she’s received from education interests.

“For someone to propose an increase in a tax, which is needed, is significant,” she said. “I don’t know what we’re gonna wind up with, but it’s given me a lot of hope.”

Teachers swarm Capitol, demand 20 percent pay hike

Thousands of teachers, students and public education advocates rallied at the Arizona Capitol on March 28, 2018. (Photo by Katie Campbell/Arizona Capitol Times)

Save Our Schools Arizona is not only gearing up for a possible referendum on whatever lawmakers may replace existing voucher expansion legislation with but also for a potential initiative to address public education funding shortfalls.

SOS Arizona spokeswoman Dawn Penich-Thacker told the Arizona Capitol Times that the anti-voucher group responsible for sending Proposition 305 to the ballot is calling on volunteers to commit now to carrying petitions this summer for a referendum or initiative “or whatever we come up with.”

She said the extension of the education sales tax under Proposition 301 was “fine” but wouldn’t put anything substantial forward. Now, SOS Arizona and its allies are considering a new initiative to meet demands made by Arizona Educators United, a recent addition to the grassroots movement around public school funding and teacher pay.

Public education advocates rally at the Arizona Capitol on March, 28, 2018, to demand higher teacher pay, among other improvements to public school funding. (Photo by Katie Campbell/Arizona Capitol Times)

Arizona Educators United organizer Noah Karvelis laid out those demands Wednesday evening as thousands of teachers, students, public education advocates and elected representatives clad in red gathered at the Capitol. Many carried signs, such as one that read, “I had to borrow money to make this sign,” and wore “I don’t want to strike, but I will” stickers.

Karvelis called for a 20 percent pay hike for teachers, competitive pay for all education employees, a permanent salary structure including annual raises, the restoration per-pupil funding to 2008 levels and no new tax cuts until per pupil funding reaches the national average.

“If you won’t do your job, we will,” Penich-Thacker said, referring to legislators.

On the table are options like additional taxes, closing corporate tax loopholes and a litany of other options, though nothing specific is set in stone; Prop. 305 may still go to the November ballot, after all, if legislators opt not to alter the voucher expansion legislation passed last session.

And what they ultimately choose to do will be based on Gov. Doug Ducey and the Legislature’s response to the demands of educators.

Teacher Susan Suchoki protests at the Arizona Capitol on March 28, 2018. (Photo by Katie Campbell/Arizona Capitol Times)

Penich-Thacker said the thousands who showed up at the Capitol – some of whom could be seen making the walk from Downtown Phoenix – were a testament to how serious the situation in Arizona is.

“For a lot of legislators, I think this just boils down to numbers on a spreadsheet or pages in the budget, but this shows that people feel this in their day to day lives,” she said.

Susan Suchoki has been teaching for decades, but she said she’ll still have student loans to pay off when she retires.

And she wondered if Ducey was really paying attention to her and her colleagues.

“I don’t know. Maybe he doesn’t know how to read,” she said.” Maybe his teacher was underpaid and in a bad mood that day.”

Rep. Doug Coleman, R-Apache Junction, was wandering among the sea of red protesters, listening to his peers in the education community.

Rep. Doug Coleman, R-Apache Junction, smiles as thousands of public education advocates circling the Capitol courtyard on March 28, 2018. (Photo by Katie Campbell/Arizona Capitol Times)

Coleman played a central role in seeing that Prop. 301 was extended just last week, though he says Ducey did not get enough credit for his part in it.

That was a necessary first step, Coleman said, but he hoped there would be more to come.

“I teach in a small district that’s really struggling to stay afloat, to keep our teachers,” he said as he watched protesters circle the Capitol courtyard. “It’s a little bit personal with me. I’ve been there. I know how they feel.”

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Issue: Proposition 301