Arizona Legislature passes education sales tax plan
The voter-approved Proposition 301 six-tenths of a cent sales tax benefits various education programs. It is set to expire in 2021.
The Legislature has passed a bill that extends for 20 years the education sales tax rate that brings in about $667 million a year to Arizona schools. Gov. Doug Ducey indicated he would sign the bill into law.
Voters passed the tax rate as Proposition 301 in 2000. The 0.6-cent sales tax was set to expire in mid-2021 if voters or the Legislature didn't act.
Republican leadership fast tracked the proposal Thursday after more than a month of legislative inaction and weeks of vocal protests from Arizona teachers demanding higher wages.
The proposal doesn't give the state's public schools and universities any additional funding, or increase the tax rate in any way. But it would extend the rate through 2041 and shuffle how some of the money would be distributed to schools.
Ducey called the plan "meaningful and significant action for public schools." Democratic lawmakers and some of the measure's Republican sponsors said the bill simply eliminates the fiscal cliff and starts the conversation increasing funding for teachers and students.
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 the votes were completed before 5 p.m. It's now on Ducey's desk to sign, veto or do nothing and allow it to become law.
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Finding some breathing room
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 financial uncertainty schools were approaching as they near the tax measure's 2021 expiration date.
Coleman said he introduced the bill to help make sure the existing funding is protected. He believes 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.
"I challenge this body to have the guts to do something," he said. "Teachers want to stay in the classroom and can’t afford it."
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.
Coleman, a longtime high school teacher who is not running for re-election, 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. All the no votes were from Republicans.
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.
Adjusting the formula
Under the legislation, about $64 million that currently goes to the state's School Facilities Board to finish paying off debt 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, R-Chandler, said the change would increase the amount of money distributed to the Classroom Site Fund 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 — three years from now — to about $18 more a week per teacher.
Debate on the issue
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 assure 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."
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."
Senate President Steve Yarbrough, R-Chandler, 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.
How Prop. 301 dollars were distributed in 2017
School Facilities Board Debt Service: $64.1 million.
Public universities: $72.4 million.
Community colleges: $18.1 million.
Tribal colleges: $800,000.
ADE – Added School Days: $86.3 million.
ADE – School Safety and Character Education: $8.0 million.
ADE – Accountability: $7.0 million.
ADE – Failing Schools: $1.5 million.
Income Tax Credit: $25 million.
Classroom Site Fund: $384.3 million.
TOTAL: $667.5 million.
Source: Arizona Senate fact sheet
Republic reporter Richard Ruelas contributed to this article.