Arizona Democrats push competing K-12 funding plan

Arizona Republic

Arizona Democrats on Tuesday morning released a plan they say will give K-12 district and charter schools nearly $4 billion more over 10 years.

 

They're offering the plan as Gov. Doug Ducey and the Legislature's Republican leadership have offered their own competing proposals to increase education funding.

 

The Democrats propose:

 

  • Continuing the $75 million additional inflation funds the Legislature gave schools this year.
  • Immediately giving schools an additional $278 million from an existing budget surplus for this school year.
  • Starting next year, giving schools an additional $250 million in ongoing revenue.

"It's immediate funding," said Senate Minority Leader Katie Hobbs, D-Phoenix. "It doesn't rely on voter approval, which the governor's plan does. It doesn't provide a (fiscal) cliff in 10 years. It doesn't raise taxes or rob future generations by harming the land trust."

 

It also proposes to freeze the expansion of the corporate school-tuition tax-credit program beginning year, which would save the general fund about $10 million that Democrats say should be dedicated to K-12 public schools. The tax-credit program allows corporations to get a dollar-for-dollar tax credit for donations made to organizations that provide students with scholarships to private schools.

 

Republican legislative leadership has scheduled meetings with its GOP members Tuesday and Wednesday as they push toward a possible special session sometime in October.

 

With a variety of proposals on the table, it's unclear what exactly the Legislature would be asked to vote on if Ducey does call a special session. Some political insiders speculate a special session could focus on Ducey's plan alone, while others suggest it deal with a broader plan that would include the governor's plan as well as proposals from GOP leadership.

 

Hobbs said they have reached out to Ducey, Senate President Andy Biggs and House Speaker David Gowan with their proposal but had not yet gotten any response.

 

"When you're talking about options, the options were not all on the table," she said. "This puts a good number more on the table. If we end up with some sort of negotiated final product, our proposal should be part of that."

 

Ducey has proposed asking voters to boost K-12 funding from the State Land Trust's permanent fund from 2.5 percent to 10 percent each year for five years. It would then drop to 5 percent and expire at the end of 2026.

 

Daniel Scarpinato, Ducey’s spokesman, dismissed the plan offered by Democrats, saying it wasn’t a plan at all, just a “press release” that would force tax hikes. He criticized the plan’s reliance on projected surplus dollars, calling it "irresponsible."

 

“It’s a 10-year spending plan, but no plan of how you’re going to pay for it other than just assuming certain revenue projections that you don’t even know,” he said. “This is really the same kind of bad planning and accounting that led us to the problems in ’09 that we just this year climbed out of. It’s creating promises that we can’t keep.”

 

Biggs and Gowan in August proposed a four-prong plan that includes:

  • Raising the percentage given to schools from the state land trust, although no details have been released about how much they would support. State Treasurer Jeff DeWit has warned that Ducey's proposal is too aggressive and would deplete the fund; Ducey disagrees.
  • Continue the additional $75 million the Legislature gave the schools this year, but ask voters to change the annual inflation rate from 2 percent to 1.6 percent and allow for further adjustments based on "economic triggers."
  • Give the schools an additional $100 million a year from an existing surplus, but again ask voters to lower the inflation rate to 1.6 percent and allow for adjustments based on "economic triggers."
  • Ask voters for permission to sweep funds from the First Thing First program for early-childhood education.

Biggs in a statement described the Democrats' plan as "not worth the napkin it was written on."

 

"I don't think it's fair to other plans to even call this a plan," he said. "The bulk of the money in their concept is based on the hope that revenues will continue to grow at a level of $250 million or more for the next seven years."

 

Democrats have criticized both the Ducey and Republican leadership plans, saying they undercut the state land-trust fund, cut money from other vital areas of education and likely won't get the voter approval needed to put them into action. The Democrats' plan would not change the funding levels from the state land-trust fund.

 

House Minority Leader Eric Meyer, D-Paradise Valley, said the Ducey and Republican plans are full of "gimmicks" that move around money already allocated for education.

 

He said of course Democrats can't see into the future.

 

"But what we do know is revenues came in above forecast, by about $340 million. And (the Joint Legislative Budget Committee) JLBC has projected $250 million of that will be ongoing for at lest the next two years," he said. "We're trying to do the right thing for the sate and get money into the classroom with a very simple and straightforward plan."

 

Whatever the Legislature ends up with, it is expected to try to use it to settle the five-year-old school-funding lawsuit alleging the state shorted district and charter K-12 schools by not fully funding the voter-approved inflation formula during the Great Recession.

 

A federal judge ruled that the Legislature must pay schools about $331 million a year in unfunded inflation payments. Republican legislative leadership is appealing the ruling, and so far the two sides have failed to reach a settlement agreement.

 

"We told the Governor's Office that our votes on the trust-land proposal are not there unless we settle the lawsuit," Hobbs said. "This gives us a path to settle the lawsuit."

 

​Superintendent of Public Instruction Diane Douglas earlier this month also released an education-funding proposal. She asked Ducey to immediately give schools $400 million, using a combination of surplus funds and the rainy day fund.