Debate Over Prop 123 Rages on as Election on Education Funding Approaches

By Matthew Tonis
Cronkite News

PHOENIX – A special election in which Arizona voters will decide whether to approve $3.5 billion to fund education over the next 10 years has drawn scrutiny over the plan to take money out of the state land trust.

Gov. Doug Ducey is using his political capital to back Proposition 123, working with other supporters to convince voters that approving the measure will settle a long-simmering lawsuit and put much-needed funds into public education.

But State Treasurer Jeff DeWit and other opponents of Prop 123 said it would be a shortsighted infusion that could rob the State Land Trust Permanent Endowment Fund, taking money away from schools in the long term.

Arizona researchers have examined the financial risk to the state land trust if voters approve Prop 123 in Tuesday’s election. Early voting is underway.

The ballot initiative would increase payments to Arizona education from 2.5 percent annually to 6.9 percent annually over 10 years.

Here are four points of view about Prop 123 from supporters, opponents, researchers and an Arizona teacher:

The Supporters: 

Ducey, Phoenix Mayor Greg Stanton and several legislators laud Prop 123 as a first step to better funding of public education.

“Proposition 123 not only provides new money to our classrooms but also sets in place economic safeguards to protect our state and settles the education funding lawsuit that has been hanging over our state for too long,” Ducey says in a statement in the Secretary of State election guide.

Christian Palmer, a representative for Vote Yes on Prop 123, said taxpayers can afford to leverage the state land trust to help education funding, saying it has lagged for years.

“The land trust system on the whole is a $75 billion asset,” Palmer said. “We have a $5 billion investment account that has nearly doubled within the last five years and this investment account is backed by an additional $70 billion in unsold trust lands.”

The Opponents

Treasurer DeWit has led the charge to denounce Prop 123, saying it will drain the land trust.

Morgan Abraham, chairman of the Committee Opposing Proposition 123, said the land trust would be depleted over time, taking away money for public education.

Abraham said, most importantly, the public education system won’t get all of the money the educators were awarded by the Arizona Supreme Court and he said he — and others like him — won’t be happy unless they do.

“We want to go back to court or try to cut a better deal,” Abraham said. “We have all five justices on our side… This whole concept that the Supreme Court is not an equal part of government and that we don’t have checks and balances in Arizona is ridiculous. There’s an easy solution to the lawsuit – it’s listening to the courts and letting it do its job.”

The Researchers

The W.P. Carey School of Business and the Morrison Institute for Public Policy at Arizona State University in November published a report on the Arizona land trust. It details the trust’s history from Arizona statehood more than a century ago through the economic downturn of 2008.

The report also researched the financial impact Prop 123 will have on the trust, concluding the increased payouts are a risk, but can be handled.

Grady Gammage Jr., a senior researcher with Morrison who helped to write the study, said Ducey’s initial recommendation for an annual 10 percent payout was too high, but he’s more comfortable with the lower amount of 6.9 percent annually that’s on the ballot.

“This is where I really agonize about how I feel about the proposition,” Gammage said. “I think there’s a risk that 6.9 is too high. But, it’s not a huge risk. Ten percent would have been too high. I think you can justify the 6.9 because we under-distributed for several years.”

Dave Wells, research director for the Grand Canyon Institute, a government-policy think tank, later published an analysis based on the Morrison Institute findings. He offers a more skeptical view of the financial risks of taking money from the trust.

Wells said it would be safer to tap about 4 percent of the state trust fund — less than what’s on the ballot — because of a “probable” economic downturn in the next decade.

“Prop 123 is an important step to address the failures in Arizona’s education,” Wells said. “But it doesn’t fix it.”

The Teachers

If Prop 123 is approved, local school districts would decide how the money is spent, such as on equipment or programs, to hire teachers or raise teacher pay.

Eighth-grade teacher Paul Strauss supports Prop 123 because schools could use it to pay teachers higher salaries. Teacher pay is so low in Arizona, he said, that it’s difficult to hire and retain teachers.

He doesn’t think the land trust would be harmed in the long run.

“That would be suicidal on our part to get rid of a main funding source for education,” Strauss said.

Strauss, who teaches science in the Deer Valley Unified School District, said Arizona has hundreds of teaching positions left unfilled because of low pay and benefits.

The situation has gotten so bad in his district he was forced to take on three part-time jobs “just to make ends meet,” a stark contrast from his previous job.

“I spent seven years in the high-tech industry before becoming a teacher,” Strauss said. “It took until last year for me to work my way up to making half of the last salary I made in corporate.”

Strauss said he didn’t get into teaching for the paycheck but he is concerned with how little teachers are paid in Arizona compared to other states.

According to an Arizona Department of Education report in January 2015, per pupil funding in Arizona was nearly $3,500 less than the national average and teacher pay was lower, on average, than other Western states in 2013.

The report said the average Arizona teacher salary was less than $50,000 annually, compared to $52,000 to more than $69,000 in four other Western states.

Strauss said he’s pleased that schools get to decide how their money will be spent if Prop 123 is approved.

“We’re not being dictated on how to spend the money because every district does have massive differences in what they need,” Strauss said. “Teacher salary is a huge thing, but we’ve made so many cuts over the last 10 years of just infrastructure that we still need to backfill to get our schools working properly in the classrooms.”