Hobbs finds inner pirate to cover school costs

In 2015, then-Sen. Katie Hobbs opposed then-Gov. Doug Ducey’s plan to raid the state land trust to boost funding for schools.

Now, nearly a decade later, Hobbs wants to make like a pirate and boost the size of that raid to a full-blown ransack of the kids’ trust fund.

Never mind state Treasurer Kimberly Yee’s warning that even continuing Ducey’s raid would amount to fiscal malpractice.

It’s a given now that our leaders will rob tomorrow’s children to pay today’s bills.

The only question is how much will they seize from future generations of Arizona’s children?

Ducey developed the land trust scheme shortly after he became governor and was faced with a court order that he start paying the schools money they were owed — money that had been systemically withheld for years by a Republican-run Legislature that isn’t exactly a friend to public education.

Rather than simply funding the schools as required by law out of existing revenues – a move that would have made it all but impossible for him to cut taxes every year – Ducey schemed up a plan to “temporarily” boost school funding by raiding the state land trust.

You know, the one that exists as a legacy to our kids and grandkids and their kids and grandkids?

The federal government gave Arizona 10 million acres of land at statehood, with a requirement that proceeds from the sale of that land be put into a trust, primarily to benefit schools.

Enter Ducey. Instead of continuing to take 2.5% of the trust to spend on schools, as had been done for more than 100 years, Ducey wanted to take 6.9% for 10 years.

He successfully marketed Proposition 123 as more money for schools without raising taxes and 51% of voters bought it in 2016, freeing Ducey to continue cutting taxes every year with general fund money that should have gone to the schools.

It was masterful politics.

And it worked out, thanks to the economic gods. What was a $5 billion trust when Ducey began his raid is now worth $7.9 billion.

Republicans now propose continuing Ducey’s 6.9% withdrawal for another 10 years, to fund teacher pay raises.

Hobbs, meanwhile, having apparently shed all of her previous misgivings about Ducey’s scheme, now wants to dig even further into the trust. She’s proposing to bump up the annual withdrawal to 8.9% annual to fund raises all around for all school employees.

“The trust is healthy and strong and

will continue to be under this proposal,” she assured us on Monday as she outlined her plan.

But even Hobbs’ own numbers show that her plan would eat into the principal of the trust. Hobbs assumes the trust will grow an ambitious 7.24% a year. Yet she wants to pull out 8.9%.

Treasurer Yee says both Hobbs’ and Republican legislators’ plans would reduce the endowment. Citing both past performance and future “Wall Street” projections, Yee says no more than 5.45% should be withdrawn from the fund to keep the trust whole.

“The governor’s recommendation of an 8.9% payout is completely unrealistic,” Yee said.

And, it must be said, dead on arrival at the Arizona Legislature.

Despite Monday’s unveiling of Hobbs’ plan, the governor has no say into what actually will go before voters. Republican legislators can and will send their own plan directly to the ballot.

And they, too, are grabbing for the eye patches.

Rather than funding state government – and teacher pay raises – out of existing revenues in a growing state, as they should but can’t (thanks to all those tax cuts), they’ll ask voters to suck 6.9% out of a trust that is projected to grow by only 5.45% a year.

And it’ll likely pass.

The kids who will pay the price for next year’s pay raises, after all? Well, they aren’t born yet.