Democrats propose competing school funding plan

Posted at 7:19 PM, Sep 29, 2015
and last updated 2015-09-29 22:19:28-04

Democrats in the Arizona Legislature on Tuesday proposed a school-funding plan that relies on surplus state money and puts more cash into schools than Republican Gov. Doug Ducey's plan to tap the state land trust.

RELATED: New report ranks Arizona as one of the worst states for teachers

The announcement from the minority party comes as GOP leaders in the Legislature and the governor work on proposals that could be taken up in a possible special legislative session in October.

The Democratic plan provides enough cash to settle an ongoing lawsuit by schools. A judge has ordered the Legislature to pay $336 million this year this year with boosts every year to make up for inflation adjustments lawmakers didn't make during the Great Recession.  Republicans are appealing the ruling, but they provided $74 million in inflation funding in the budget year that began July 1, the amount they argue is owed.

The Democrats' plan puts $3.8 billion in new money into schools over 10 years without raising taxes. It relies on the $74 million in the current budget and $250 million in surplus cash that accumulated in the first half of this year and that Legislative analysts expect to be ongoing, said Sen. Martin Quezada, the Democratic whip.

"These are reasonable, sound estimates of what is going to move forward," Quezada said. "We did not go above and beyond the $250 million that they have estimated."

Ducey spokesman Daniel Scarpinato called the Democrats' proposal "a 10-year spending plan with no way to pay for it."

"It's a hidden tax increase -- they would have to raise taxes, and they would have to raise them substantially in order to pay for this," Scarpinato said. "This is making major assumptions -- and it is exactly the kind of fiscal mismanagement that led the state into a hole back in '09, which we're just climbing out of."

The Democrats also would cap corporate contributions to private school tuition organizations at the current $50 million a year. That amount is set to increase 20 percent a year forever, diverting cash from the general fund to private schools.

Scarpinato slammed that proposal to cap corporate tax credits for their giving to private school groups.  "Why would we want to prevent families who can't afford it from having the ability to send their kids to good schools?" he asked.

House minority leader Eric Meyer said Democrats aren't rolling back that funding, just not allowing it to grow by 20 percent a year. Legislative estimates show that the diversions to private schools would grow to $662 million by 2030.

"There's $50 million there for those students. But those students also have the choice to go to all our public schools that should be adequately financed as well," Meyer said.

The Democratic plan has little hope of being adopted because its conflicts with Ducey's plan to tap the state's permanent land trust fund and with plans by Republicans who control the Legislature.

Ducey is proposing boosting payouts from the state land trust to funnel $2.2 billion in new funding into schools over the coming decade. Treasurer Jeff DeWit has criticized that plan, saying it dips into the principal of the $5.1 billion land trust account intended to spin off cash for schools forever.

Schools would get about a $300 boost to the $3,400 per student they now get each year under the Ducey proposal, and about $330 under the Democratic plan.

GOP lawmakers want to use a combination of state trust land cash, tobacco tax money and  cash on hand to boost funding by $5 billion over 10 years, but they would raid the state's First Things First early childhood education fund to pay for much of that increase.

Both the trust land proposal and the First Things First tobacco tax plan require voter approval.

Republican Senate President Andy Biggs criticized the Democratic proposal, saying in a statement that it uses virtually all of the state's surplus for schools while ignoring other needs, like universities, transportation and public safety.

"The bulk of the money in their concept is based on the hope that revenues will continue to grow at a level of $250 million or more for the next seven years," he said. "Nothing new or creative here; just project that we are going to grow at a brisk pace and, voila, there's money for K-12 funding."

Democrats say their plan is simple, doesn't require voter approval and could get new money into schools in just weeks.

"This is immediately funding. It does not rely on voter approval, which is not guaranteed by any means," Senate Minority Leader Katie Hobbs said. "We could go in special session right now and get it into the classroom."

Democrats are suspicious of Ducey's apparent refusal to offer the use of surplus funds for schools. The state is sitting on $325 million in unanticipated cash and a $460 million rainy day fund.

"I think they're saving it for a major tax cut, even though it's been proven that's not what gets companies to come to Arizona," said Sen. Steve Farley, D-Tucson. "It's an education system that does that."

Scarpinato called that statement "baloney."

Ducey campaigned on a promise of cutting taxes each year.