Originally Published: January 7, 2018 6 a.m.
PHOENIX — Gov. Doug Ducey kicks off the legislative session Monday with a call for more education funding — but not with the tax hikes that some say are necessary to provide truly adequate funding for schools.
In an interview with Capitol Media Services, the governor said the state has made a “significant investment” in K-12 education, saying aid to schools is $700 million higher now than it was three years ago.
“More is needed,” he acknowledged, saying the details of his budget will have to wait.
But the governor rejected suggestions and proposals by several different education and business groups that the quickest — and easiest — way to raise the revenues needed is to boost state sales taxes, curb tax credits or close what some describe as “loopholes” in the tax code.
“I’m not raising taxes,” he said.
Instead, Ducey insists that he can find the money elsewhere in the budget.
“Our economy is growing,” he said. “Our state government is being operated more effectively and efficiently.”
But the kind of money Ducey can find through such savings is unlikely to satisfy those who cite not only Arizona’s reputation of being at or near the bottom of per-student funding but the problems in both attracting and retaining teachers. And that starts with 2,000 classrooms not having qualified teachers at the helm, instead being run by substitutes or students being forced into overcrowded classrooms.
Senate Minority Leader Katie Hobbs was more succinct in her criticism of the governor’s contention that the state can adequately meet education needs with savings elsewhere.
“We’ve got all the change from the couch cushions that there is,” she said.
It’s not just Democrats and educators who are critical of Ducey’s position that the state can fund education without additional revenues. He also is increasingly at odds with those who otherwise might be considered allies.
Future of sales tax
It starts with the debate of the future of the 0.6-cent sales tax approved by voters in 2000 specifically to fund education. Without action, it will sunset in 2021, along with the approximately $600 million it raises.
The governor said he supports simply asking voters to extend it, insisting it could be reformed in a way to generate more dollars. He also doesn’t want any action this year, a move that House Minority Leader Rebecca Rios called “incredibly irresponsible.”
Beyond that, others say education needs more than that 0.6-cent tax raises.
Diane Douglas, the state superintendent of public instruction, favors boosting the levy to a full penny, figuring to use three-fourths of that to boost teacher salaries by about 10 percent.
Jim Swanson, CEO of construction firm Kitchell Corp., thinks even more than that is needed, suggesting a doubling of the 0.6 cent levy. Others, including Phil Francis, the former CEO of PetSmart, said it probably will take a 1.6-cent tax to produce the revenues needed.
Even the more fiscally conservative members of the business community are saying something more is needed to generate more dollars.
“Tax revenues are not matching the health of the economy, not just in Arizona but across the country,” said Glenn Hamer, president of the Arizona Chamber of Commerce and Industry, blaming much of that on the increase in online purchases whose tax revenues are not captured. Hamer said he wants to look at reform, opening the door to expanding the list of items and services that are taxed, though he has no specific revenue number in mind.
And Kevin McCarthy, executive director of the business-oriented Arizona Tax Research Association, said he could support a tax increase. But he said that is contingent on cleaning up other disparities in education funding, like some school districts getting more money per student because of things like desegregation expenses.
All that puts Ducey in the position of being a holdout amid increased public focus on the state’s public education system and concern that children are being shortchanged because of the state’s failure to put more dollars into K-12 education.
There is no dispute over the numbers. Even Ducey press aide Daniel Scarpinato concedes that current per-student funding, after adjusting for inflation, is still not back to where it was before the recession.
There’s also the separate fact that Ducey, who convinced voters in 2016 to tap a special trust fund to end a lawsuit against the state, insisted that the cash that generates would be just the first step toward improving education funding. But questions remain about what has been produced so far, with teacher salaries up just 1 percent this year.
Ducey promised another 1 percent for the coming school year. But that still leaves salaries far short of what they are in virtually every other state.
The question of how short depends on who you ask — and what ruler they use. For example, the Morrison Institute says that elementary school teacher pay is the lowest in the nation, even when adjusted for statewide cost of living; high school pay is not far behind at 49.
By contrast, the Arizona Tax Research Association, which represents major taxpayers, has its own way of looking at it.
“While we do stipulate and recognize Arizona’s teach pay ranking has dropped in the last 20 years, we do not agree with the assertion that Arizona is last by any measure,” said Sean McCarthy, the organization’s senior research analyst.
So where does it believe Arizona falls? No. 28 adjusted for per-capita income.
Ducey said those numbers, even if correct, are not where Arizona should be.
“I believe we need to come up on teacher salaries,” he said.
“It’s very hard work to teach a kid, especially a kid that’s not learning,” the governor continued. “They’re putting the work in. They’re getting the results. And I want to see the dollars flow to them.”
But the governor sidestepped questions of where he believes teacher salaries in Arizona should be in comparison to the rest of the country, saying his focus is on the trendline.
“What I look at is how are we doing this year versus previous year and are we making improvements year over year,” he said.
There’s another big education decision facing Ducey and lawmakers: whether to block voters from getting the last word on the expansion of the program that provides vouchers to parents to send their children to private and parochial schools.
Foes gathered more than 100,000 signatures after last year’s vote, holding up enactment until November when those who go to the polls would get to decide whether to ratify or reject what the Legislature approved.
Supporters have responded by asking the courts to void the referendum, citing what they said are various irregularities.
If those legal efforts falter, the only way to quash a vote on what would be Proposition 305 would be for lawmakers to alter last year’s legislation.
That presents a political question for lawmakers.
If it remains on the ballot, that could bring out foes of expansion. And once they’re voting “no” on more vouchers, they could just as easily spread their displeasure with those who enacted it in the first place, including Ducey.
A legal challenge to that petition drive has yet to get a final ruling.
Other education-related issues likely to provoke debate include:
• Extending funding for special career and education programs now in high schools to ninth grade;
• Requiring all high schoolers to take a college-entrance examination;
• Revamping and reenacting a law voided by a federal judge aimed at “ethnic studies” programs that prohibit things like teaching ethnic solidarity;
• Capping the year-over-year increases in what corporations can divert from state income taxes to groups that give scholarships to help students attend private and parochial schools; and,
• Requiring parents to be notified when their student athletes suffer a concussion.