Prop 204 would extend 1-cent tax to fund education
PHOENIX — A special election in 2010 showed that Arizonans are willing to hike their taxes if they believe it’s for a good cause and a limited amount of time.
But it remains an open question whether they’re now willing to agree to keep that higher levy in place, forever, for a menu of specifics that proponents insist are needed but foes are attacking as “pork.’’
And many of the individuals and groups that supported that 2010 temporary hike, like the Arizona Chamber of Commerce and Industry, already have lined up to make sure that the tax goes away as promised on May 31.
Ultimately, the fate of Proposition 204 is likely to depend on how voters see the debate.
For Ann-Eve Pedersen, the question comes down to whether the state is willing to put more money into education.
She acknowledges that the initiative would forever earmark the lion’s share of a permanent one-cent surcharge on the state sales tax for public schools, putting the new revenues off limits to legislative decisions that the new funds, about $1 billion a year to start from the tax, may be more needed elsewhere. In fact, the measure also forbids lawmakers from taking any money away from what they already are providing, no matter what the state’s future revenue picture.
“But education isn’t going away, kids aren’t going to go away,’’ Pedersen said.
“We are always going to need to educate our kids,’’ she continued. “And we’re always going to need to make sure that we have an educated workforce so we can attract good employers and keep employers in Arizona.’’
State Treasurer Doug Ducey is not disputing the constitutional mandate for state-funded public education, though he disputes that more money is needed. He also is arguing that there is no guarantee the cash will make it into the classroom rather than be absorbed in administrative costs.
But Ducey’s mainly using how a small percentage of the proceeds will be spent as his best argument to kill the whole measure.
Proposition 204 earmarks 10 percent of the proceeds for transportation. That means roads, bridges and mass transit project.
What it also means is more state-fueled contracts. And Ducey said that is little more than a payback to We Build Arizona, a consortium of construction organizations, which as of the most recent figures had contributed $357,000, about a third of the cash to run the campaign.
He called the initiative “full of pork’’ for special interests.
Pedersen said the funding guarantee is justified.
“If you talk to economists, there are a few things you need to invest in if you want to improve the state’s overall economic climate,’’ she said. And that list, Pedersen said, includes roads and public transit projects.
The initiative also has other set-asides beyond K-12 education.
That includes 10 percent of the first $1 billion for a “family stability and self-sufficiency fund.’’ Its goals include preventing hunger, homelessness, domestic violence and for providing child care and other services to families below 200 percent of the federal poverty level, about $38,000 a year for a family of three.
Universities also would get some of the funds for scholarships, operations and construction. And there’s money to supplement existing state funds to provide health care to the children of the working poor.
But Pedersen dismissed Ducey’s characterization of the entire initiative.
“Children are not a special interest group,’’ she said.
Beyond the question of how the money is being divided up is the debate over whether the cash really is needed.
Ducey said total funding from all sources in 2011, state, federal and local, amounted to $9,200 per student in 2011. That compares with nearly $7,100 in 2001, close to a 31 percent increase in a decade.“We need to spend those dollars more effectively,’’ he said. “We don’t need to raise taxes on hard-working citizens.’’
Pedersen prefers to look at a different timeframe — and a different set of numbers.
In 2008, all funding sources amount to $9,540 per student. For the current year, that slipped in actual dollars to $8,784, an 8 percent drop even without accounting for inflation.
And she prefers looking at only what the state contributed, which went from $4,901 in 2008 to $3,887, a 20 percent drop.
Ducey said the source of the funds should not matter: Money is money.
Pedersen countered that some of the federal cash is for things like free- and reduced-price lunch programs that have nothing to do with education. And she said the fact that local taxpayers have been forced to approve overrides to make up for the lack of state funds is no excuse.
Whatever the figures, Ducey said it is wrong to focus on dollars, saying there is a need to “reset the discussion.’’
“No other enterprise in the world measures success by how much money it spends,’’ he said.
Ducey said if dollars equal success, then the best schools in the country would be in Detroit, Baltimore and Washington, D.C.
Pedersen countered that Proposition 204 has a provision tying $100 million of state aid to performance, with schools being judged on everything from how well students advance to parental satisfaction. She said while that’s only a part of the cash to be raised, it’s the first link between performance and money ever, even by the state lawmakers who have been complaining about the lack of accountability.
And she said money does matter.
“Divesting in education as we have done is not a recipe for improving performance,’’ Pedersen said. “If schools don’t have basics like textbooks, if they don’t have pens, paper, pencils, if they have supersize classrooms, how are our kids expected to learn?’’
Ducey said he’s not saying that money does not matter at all. But he said that presumes more is needed.
The other main argument against the measure is that it is a new tax.
Technically, that’s true: The temporary one-cent levy that voters approved in 2010 expires on May 31 if Proposition 204 goes down. And the proceeds from that were not really earmarked but instead given to the Legislature with general direction to use it to help education and public safety.
By contrast, Pedersen has preferred to point out that approval of the initiative will mean no change in the current 6.6 percent tax rate, as the new one-cent surcharge would kick in the day after the 2010 measure self-destructs.
Ducey may have a different viewpoint about funding for public education than Pedersen and other supporters.
She has an 11-year-old attending a public middle school; Ducey’s three children, age 9, 13 and 15 are currently all in Catholic school.
Budget year / State, fed & local aid per student / State aid only
1990 / $4,243 / $1,803
1991 / $4,621 / $1,824
1992 / $4,820 / $1,865
1993 / $4,855 / $1,908
1994 / $4,897 / $2,157
1995 / $5,011 / $2,423
1996 / $5,310 / $2,563
1997 / $5,386 / $2,784
1998 / $5,721 / $2,763
1999 / $6,379 / $3,245
2000 / $6,497 / $3,290
2001* / $7,070 / $4,135
2002+ / $7,760 / $3,508
2003 / $8,380 / $3,904
2004 / $8,256 / $3,774
2005 / $8,458 / $3,894
2006 / $8,832 / $4,294
2007 / $9,399 / $4,643
2008 / $9,540 / $4,901
2009 / $9,328 / $4,437
2010 / $9,321 / $4,195
2011 / $9,233 / $3,897
2012 / $8,736 / $3,837
2013 est. / $8,784 / $3,887
* Includes unusual $670 million in special funding to fix deficient schools; less in other years.
+ First year of extra funding from new 0.6 cent sales tax
-- Source: Joint Legislative Budget Committee