Governor’s signature would renew Prop. 301 rate for another 20 years
The Senate and House have approved legislation that would extend for 20 years the education sales-tax rate that brings in about $667 million a year to Arizona schools.
Republican legislative leadership on Thursday fast tracked the effort to extend the tax rate, after more than a month of legislative inaction and weeks of vocal protests from Arizona teachers demanding higher wages.
Senate President Steve Yarbrough, RChandler, said there was “agreement” on the bill among the Senate, the House and Gov. Doug Ducey.
The issue Thursday needed a public Senate committee hearing, two votes of the full House and two of the full Senate before going to Ducey. All were completed before 5 p.m.
Voters in 2000 passed the tax as Proposition 301. The 0.6-cent sales tax was set to expire in mid-2021 if voters or the Legislature didn’t act.
Two state lawmakers — Rep. Doug Coleman, R-Apache Junction, and Sen. Kate Brophy-McGee, R-Paradise Valley — introduced a pair of bills early this session to extend the tax rate.
Their reasoning has been that the bills, House Bill 2158 and Senate Bill 1390, would essentially remove the fiscal cliff and financial uncertainty schools are approaching as they near the tax measure’s expiration date.
That would give state and education leaders some breathing room to decide whether the tax-allocation formula should be adjusted and whether the tax rate should be increased to bring in more money for schools.
Coleman, a longtime high-school teacher, tearfully thanked fellow lawmakers for passing the measure.
“I’m losing my colleagues. I still teach one class a day, mainly because they can’t get anybody,” Coleman said. “The teacher shortage is real.”
The Senate bill passed 26-4. The House bill passed 53-6, with one member absent.
Extending the tax rate is “absolutely the right thing to do,” Brophy-McGee said.
“If we can eliminate the cliff, which is all this does, we can set the stage for a very extensive discussion on what the new Prop. 301 looks like, and every education interest will be at the table,” she said.
The legislation doesn’t give the state’s public schools and universities any funding other than what they are already receiving, or increase the tax rate in any way.
The latest version of the legislation included amendments that would extend the rate through 2041 and shuffle around how some of the money would be distributed to schools.
About $64 million that currently goes to the state’s School Facilities Board would be redirected to the Classroom Site Fund, which can go toward teacher salaries, said Sen. Sylvia Allen, R-Snowflake.
House Speaker J.D. Mesnard, RChandler, said the change would increase the amount of money distributed to the Classroom Site Fund — the largest pot of money that helps pay teacher salaries — by 17 percent. The actual amount of raises in pay per Arizona teacher, though, could amount to about 2 percent once enacted in 2021, according to Mesnard.
House Minority Leader Rebecca Rios, D-Phoenix, said she supports the bill.
“But I think it’s important to be honest that this just maintains the status quo and there’s much more that we need to do,” she said.
Mesnard took issue with Rios’ comments, saying that the extra $64.1 million going to the Classroom Site Fund is “no small amount of money.”
“I realize it seems to be that the goal of some of my friends on the other side of the House will continue to attack improvements in funding,” Mesnard said. “But this is anything but the status quo. There’s $64.1 million more going to classrooms because of this amendment and moving this forward.”
Rios responded that it would equate — in 2021 — to about $18 more a week per teacher.
The future of the education sales tax has been a point of contention and concern among education and business advocates and state leaders. The money funds teacher salaries, classroom expenses, dropout prevention, building maintenance, universities and community colleges.
Greg Wyman, superintendent of the Payson Unified School District, told Senate lawmakers Thursday that an extension of the tax rate “would send a very powerful message to our teachers that they do matter.”
Senate Minority Leader Katie Hobbs, D-Phoenix, called the legislation “the right thing to do for our schools to create some level of certainty.”
“But I do want to reiterate that this is doing nothing to solve a crisis,” she said. “It is simply continuing the status quo. We still have a lot to do to make sure our schools are adequately funded.”
Because this new measure is legislatively approved and not voter-approved, future Legislatures will be able to more easily change the tax rate or where the money goes. There is some agreement among both Democrats and Republicans that some tweaks could be beneficial.
But Hobbs warned that Democrats will be closely watching to ensure future lawmakers safeguard voters’ original intent.
Sen. Martin Quezada, D-Phoenix, who is also president of the Pendergast Elementary School District Governing Board, said lawmakers should not be celebrating the passage of this bill.
“We shouldn’t go home tonight and feel like we’ve accomplished something,” he said. “All we’ve done is extended the status quo in our schools. And right now, the status quo in public education in Arizona is absolutely horrible. We need to commit that this is only the very beginning of what we need to get done to fix this funding problem that we have in our schools.”
Allen has been pushing for Prop. 301 reforms for several years. She said she would like to see more of the money go directly to teachers.
“The goal for all of us ... regardless of what those on the other side of the aisle are saying ... we are trying to better the lives of our teachers,” she said.
Some of the Legislature’s more conservative lawmakers appeared to have some heartburn about voting for what some are calling a tax hike. Several defended their support of the legislation.
Sen. Sonny Borrelli, R-Lake Havasu City, said several times that he “doesn’t like tax increases.”
“But at the end of the day, we have to govern,” he said. “To continue this is doing what we were elected to do by our constituents.”
Yarbrough said he thought the passage of this measure was something lawmakers should celebrate.
“This is a good day for public education in Arizona,” he said.
There has been wide support among education and business advocates for extending and even increasing the sales-tax rate from Prop. 301 — viewed by many as a crucial step toward restoring hundreds of millions of dollars of education-funding cuts following the recession.
State schools Superintendent Diane Douglas and a coalition of business CEOs have recently proposed separate plans to expand the sales-tax rate to as much as 1.5 cents.
Coleman has said his intent for introducing the bill is to make sure the existing funding is protected. He, too, believes that the measure should be expanded to include more funding for schools, but said an extension will give state leaders some breathing room to then consider increasing the tax.
Ducey has in the past said he supports extending the tax rate, although he has said it may need to be modernized. He hasn’t publicly said how he’d like to see Prop. 301 changed, and he’s refused to say whether he’d support increasing the tax rate.
He and other state Republican leaders have indicated they did not want the matter on the 2018 ballot. Ducey is up for re-election on that ballot.
At a brief news conference following a speech at the Arizona Tech Innovation Summit in Phoenix on Thursday, Ducey declined to say whether he would support the legislation, citing a policy of not commenting on pending bills.
“I think everyone knows I’ve been supportive of an extension of Prop. 301, but my policy is not to comment on legislation that’s in the Legislature,” Ducey said.