Demanding an ed-funding unicorn

The Invest in Ed pledge commits candidates to support “sustainable revenue” for K-12 education.

Advocates usually add the characteristic of “permanent” to their funding demands.

What does “permanent and sustainable” funding for K-12 education mean? Is it accomplishable? And if so, would it be sound public policy?

What the Invest in Ed crowd really wants is guaranteed adequate funding for schools that the Arizona Legislature cannot touch.

The major problem with this as an objective is that there are no tax sources that would provide “sustainable” funding in the sense that these advocates intend. All revenue sources rise and fall with the economy.

From 2007 to 2010, state sales-tax collections declined by 25 percent. Individual income-tax collections fell 36 percent. And corporate income taxes were down by 58 percent.

The Invest in Ed crowd frequently cites tax cuts as the cause of K-12 funding woes. But there were no rate reductions in these years. It was the result of a recession that hit all sources of state revenue especially hard.

From these three mainstays of state finances, revenue was $3 billion less in 2010 than in 2007. Nor would property taxes have been a safe haven. The recession was caused by the bursting of a real-estate bubble. Property values took a big hit as well, although on a slightly delayed timeline.

School funding accounts for nearly half of the state’s general fund budget. It would not have mattered what combination of taxes were dedicated to K-12 funding, it could not have been protected from the ravishes of the recent recession. There are no recession-proof sources of government finance.

Moreover, funding for schools is already largely beyond the reach of the Legislature.

Most of K-12 funding comes through a formula to calculate state assistance for maintenance and operations. The starting point is a per pupil allotment.

In 2000, voters mandated that the per pupil amount be increased annually for inflation. In response to the recession, the Legislature skipped a few years. Prior to that, it had actually increased the per pupil allotment by more than inflation.

The Arizona Supreme Court subsequently held that the annual inflation increases were binding on the Legislature.

In the 2000 ballot measure (Proposition 301), voters also approved a sixtenths of 1 percent increase in the state sales tax, with most of the money going into a special fund for K-12 education. That money is distributed directly to schools.

The Legislature has nothing to say about the amount or how the money is used. Despite that, last session, lawmakers extended the tax and the special fund, which were scheduled to expire in 2021.

In all, at least 75 percent of what the schools get flows automatically and is beyond the reach of the Legislature. But is that really a good idea? We supposedly have a representative democracy. We elect people — the governor and state legislators — to run state government.

There are no more fundamental governing decisions than how much and who to tax, and how much and where to spend.

If nearly half the state budget is off limits, what’s the point of electing people to run state government? What’s left of representative democracy?

Of course, the Invest in Ed crowd thinks that Arizona voters keep electing the wrong people. So, they want to circumscribe the scope of legislative deliberations.

While most of what the schools currently receive is beyond the reach of the Legislature, obviously lawmakers could vote to give even more. In fact, state funding for K-12 education has gone up substantially in recent years. And given the recent robust increases in state revenue growth, even more is likely.

Nevertheless, a case can be made, and I regularly make it, that state finances still need a tax increase. A debate about that is worth having.

But demanding that K-12 funding be made “permanent and sustainable” is to demand the production of a unicorn.