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On the ballot: Weighing the pros and cons of Prop 123

5/2/16

Elizabeth Medora
Staff

NORTH VALLEY – As easy as 1-2-3? Not necessarily. On May 17, voters will be choosing whether or not to approve Proposition 123, which would provide schools with a payout from the lawsuit multiple Arizona school districts and educational organizations filed against the state government over lack of inflation adjustments to education funding.

Per the Prop 123 Analysis by Legislative Council available on azleg.gov, “Proposition 123 would amend the Arizona Constitution to increase the annual distributions from the state trust land permanent funds to schools, universities and other public institutions from 2.5% of the average market values of the funds to 6.9% for the next ten fiscal years.”

Prop 123 has both strong proponents and opponents who are debating how this proposition will affect schools currently and in the future.

Morgan Abraham, Chairman of the Committee Against Prop 123, says Prop 123 is “kicking the can down the road.”

“The future kids and the future students weren’t the ones sued, so why are they the ones paying for it?” Abraham asked.

As a supporter of Prop 123, Pearl Chang Esau, president and CEO of Expect More Arizona, is looking at the measure as a positive starting point for school funding.

“While Prop 123 won’t solve all of our education funding problems, we believe it’s a good start to doing what’s best for Arizona students,” Esau said in an email interview. “In addition to Prop 123, we plan to work together toward a long-term solution for education funding, for early years through college and career.”

Prop 123 has garnered bipartisan support, as well as opposition. Governor Doug Ducey backs the measure, calling it “our innovative way of ensuring that our schools get additional sustainable funding now and into the future – without raising taxes” in a letter in support of Prop 123 in the Special Election Guide. Fred DuVal, who ran against Ducey in the 2014 gubernatorial election, has joined Ducey in a television ad supporting Prop 123.

“I support Prop 123 because it puts $3.5 billion in the classroom over the next 10 years,” DuVal states in the ad.

Prop 123 faces strong opposition, however, from several sources, including State Treasurer Jeff DeWit.

“Prop 123 is a short-term fix that will leave a long-term scar on our schools and state finances,” DeWit wrote in a letter in Arizona’s Special Election Guide. Dean Martin, a former state treasurer, also urged residents to vote no on Prop 123.

“Don’t let the short sighted politicians raid our education trust fund for political gain,” Martin urged in a Special Election Guide letter.

So how do local school districts feel about Prop 123?

Dr. Debbi Burdick, Cave Creek Unified School District Superintendent, noted that CCUSD has passed two different budgets for the upcoming school year, one with Prop 123 funding and one without it.

“If it (Prop 123) doesn’t pass, there are 63 positions that will be cut,” Burdick said, noting that these positions include special area teacher positions, counselors, school office positions, and others. If the measure passes, CCUSD will receive $905,00 per fiscal year for the next 10 years, depending on student enrollment.

CCUSD has struggled with limited funding; district voters haven’t passed an override in over a decade. Continued cuts to funding have taken their toll on the district, especially as they face cutting positions again, but student achievement scores remain consistently high. Burdick noted that CCUSD consistently has low overhead costs and works hard to receive grant funding.

Burdick said that the school districts would likely get nothing if Prop 123 isn’t passed, and that the plaintiffs would have to go back to court and try to settle.

“I think most of us in the education community feel if Prop 123 does not pass, then we just don’t get any additional dollars for our schools,” Burdick said.

The Deer Valley Unified School District will be receiving $6.1 million if Prop 123 passes.

“If Prop 123 passes, it means $6.1 additional funds for DVUSD,” said Monica Allread, Director, Communications & Community Engagement
at DVUSD, in an email interview.

“If the measure fails, we would have less money for teacher raises,” Allread noted. “Teachers and all DVUSD staff have not seen a significant salary increase in more than seven years. During that time, we have cut $70 million from the budget.”

The DVUSD Negotiation Solution Team is working on a recommendation for how to use funds if Prop 123 passes; the DVUSD Governing Board will consider that recommendation at a meeting this week.

“Many voter referendums in the past have called for an increase in sales tax to pay for education and/or other needs,” said Esau, Expect More Arizona CEO. “If Prop 123 passes, money will come from the State Land Trust, as well as the state’s general fund. Voters will not be voting on a tax increase as part of Prop 123.”

“The State Land Trust was set up with express purpose of supporting education in Arizona,” Esau continued. “Prop 123 would increase distributions from the State Land Trust over the next 10 years to 6.9 percent, from 2.5 percent, with additional funds coming from the state’s general fund. The non-partisan group of economists in the Joint Legislative Budget Committee have predicted the value of the trust will still grow by over $1 billion over the next 10 years even if Prop 123 were to pass. Education and finance groups have long held that the trust has been underutilized. The proposition does not call for any additional land sales, just the increase in distribution from the trust.”

Abraham, Chairman of the Committee Against Prop 123, agrees that the State Land Trust is there to support education, but disagrees with how the funds would be used.

“The lawsuit is being settled with the land trust, which already belongs to education,” Abraham said. “So basically, the education community is paying for their own lawsuit.”

Abraham also referenced the “triggers” in Prop 123, specifically the 49 percent trigger, saying that more than 49 percent of funding will never be allocated to education.

Per the Prop 123 Analysis By Legislative Council: “Beginning in fiscal year 2024-2025, if the portion of the state budget appropriated for K-12 education is at least 49% of the state general fund, the inflation adjustment may be suspended for the next year, and the base level amount allocated for each K-12 student for the next fiscal year may be reduced by the amount of the inflation adjustment for the current fiscal year; if the portion of the state budget appropriated for K-12 education is at least 50% of the state general fund, the inflation adjustment may be suspended for the next year, and the base level amount allocated for each K-12 student for the next fiscal year may be reduced by two times the amount of the inflation adjustment for the current fiscal year.”

Stating that Arizona is slated to have a $600 million budget surplus, Abraham asked, “If we have the money, why aren’t we using it?” His assessment is the surplus is currently slated for corporate tax cuts, instead.

Abraham obviously disagrees with Prop 123 and wants to fund schools another way, but how does he answer schools that are desperate for funding now and need this payout?

“My mom is a public school teacher in Phoenix,” Abraham said. “I’m the first person to admit our teachers are vastly underpaid.”

“Prop 123 fixes no problems. It settles the lawsuit,” he continued. He sees the “political reality” as, if Prop 123 fails: “On May 18, if this thing fails, the governor and the legislature will get their heads together and get things done.” Abraham says that if Prop 123 doesn’t pass, politicians who have come out in favor of Prop 123 and said that teachers need the money will have to allocate more funding for education after so publicly stating teachers and schools need additional funding.

But Esau says without Prop 123, the lawsuit will continue, meaning there is no guarantee on when schools will actually receive much-needed funds.

“Over the past five years, Arizona has seen deep cuts to education,” Esau noted. “Without passage of Prop 123, funding will remain at current levels and the inflation lawsuit between schools and the state legislature will continue.”

As May 17 grows closer and education staff awaits the election results, they’re preparing themselves either way to continue giving Arizona kids the best education they can.

“We’ve got a great district,” Burdick said of CCUSD. “We have the most dedicated staff that I’ve ever worked with.”

For more information on the pros and cons of Prop 123, see www.noprop123.com and www.expectmorearizona.org.