Prop. 123: Short-term solution predicted to bring long-term problems
.Proposition 123, as advertised, seems simple and straightforward — fund $3.5 billion to education over the next 10 years without raising taxes. Sounds great right?
Not to opponents of Prop. 123. They believe the initiative misleads voters into thinking it solves the state’s education funding crisis but in reality offers a short-term solution that creates worse problems in the long run.
“Voters in 2000 provided a long-term solution and our political leaders decided to ignore them,” said Shirley Sandelands, president of the League of Women Voters of Arizona, an outspoken organization opposing Prop. 123. “This crisis was totally caused by the governor and legislature refusing to follow the will of the voters when Proposition 301 was passed in 2000.”
Prop. 301 generated funds for education by raising the sales tax by 0.6 percent, which collected $624 million in 2015 , according to the Arizona State Treasure office.
However the legislature defaulted on promises to fund education in accordance to Prop. 301 since 2009, withholding more than $1 billion in K-12 funding as of today.
The initiative required the state pay annual cost-of-living increases to support schools at the rate of inflation through 2020. Schools stopped receiving the inflation adjustment money when the economy bottomed out.
Drops in funding contribute to alarming teacher shortages, cuts of mentoring and instructional programs plus growing needs for classroom resources and repair to infrastructure. Since 2008, Arizona cut state funding per student by 14.9 percent, the third largest cut among all states. The state also ranks last in the nation for education funding.
A collection of plaintiffs from school districts and education organizations decided to sue the state in 2010 for failing to pay the inflation adjustment money owed to K-12 schools under Prop. 301.
The Arizona Supreme Court ruled in favor of public schools. Maricopa County Superior Court Judge Katherine Cooper then ordered the state pay more than $300 million to fund K-12 schools in 2015.
Gov. Doug Ducey and legislative leaders tried to settle the funding dispute but couldn’t reach an agreement. Thus Prop. 123 was born last year.
Voters will decide how to settle the funding dispute at the polls on May 17 during a special election.
Its major selling point is $3.5 billion in school funding over the next 10 years without raising taxes, but not everyone accepts that at face value.
“I believe the advertisements are selling false hopes,” said Ralph Quintana, president of the Arizona Federation of Teachers and longtime West Valley middle school teacher.
He called Prop. 123 a “Trojan horse” that appears to settle the education funding dispute but in reality shortchanges the amount owed to schools under Prop. 301 and prolongs the inevitable tax increases needed to support future education spending.
Sandelands said, “[Prop. 123] offers a solution, but in reality only provides 70 percent of the funding promised by Prop. 301.”
The new initiative would appropriate $299 million to schools this first year but Quintana said that’s $750 million short of what education was being funded before 2007.
His other concern is the future stability of the State Land Trust, which is managed by the Arizona State Land Department to generate revenue for 13 state beneficiaries, the largest being K-12 education.
Prop. 123 dramatically increases the amount withdrawn from the Trust, which means less money will be available for K-12 education in the future.
“Not only can it hurt the next generation of students it could hurt the next generation of teachers,” Quintana said.
Under current law, 2.5 percent of the average value of the Trust over the last five years is distributed for education. Prop. 123 would raise that amount to 6.9 percent over the next 10 years.
According to the Joint Legislative Budget Committee, under the current law, the Trust can grow to $9.49 billion by 2026 but Prop. 123 would reduce growth to $6.3 billion.
Quintana explained, “When this expires in 10 years, the money from the Trust going towards education will be $70-100 million less [per year], which means the difference will need to be paid out of the state budget surplus and tax dollars.”
Arizona Treasure Jeff DeWitt is responsible for managing the State Land Trust and another outspoken advocate for voting no on Prop. 123.
He argues the initiative violates the federal Enabling Act stipulating the Trust is suppose to fund education forever at a certain rate.
Quintana described Prop. 123 as your boss admitting to underpaying you for years and making up the difference by taking from money in your retirement plan.
“This is our money already,” said Quintana. “It gives education money that is already earmarked for education.”
He added Prop. 123 may not raise taxes for the next 10 years “but eventually you’re going to need to make up the shortfall to the State Land Trust and the only way to do that is to raise taxes.”
Sandelands said, “It’s a short term Band-Aid that will cause even deeper funding problems in 10, 15, 20 years.”
Prop 123 also protects the state from another lawsuit if the legislature decides to repeat actions that prompted the Prop. 301 lawsuit like choosing to withhold inflation adjustment money.
According to the budget committee, in 2026 the proposition would allow the legislature to suspend the annual inflation adjustment.
Quintana explained this makes the funding dependent on the economy. “So if the economy flat lines or doesn’t do as good, they don’t need to give as much as they need to,” he added.
This makes it difficult to respond to changing economic conditions and needs of Arizonans leaving schools in limbo to guess how much funding they would receive.
Based on the legislature’s recent history of ignoring voter-mandated propositions like Prop. 301, there is still no guarantee the schools will get the money to fund education if Prop. 123 is passed. There is also no guarantee the funds won’t be tied up in legal proceedings and appeals like Prop. 301.