PHOENIX — Gov. Doug Ducey is finally willing to talk about preventing a financial crisis looming for schools after 2020. And it involves a word — taxes — that usually makes him blanch.
Ducey said late Tuesday that he supports asking voters to extend the six-tenths of-a-cent sales-tax surcharge they approved in 2000. That money, about $650 million a year at current sales, goes to fund teacher salaries. But unless voters extend it, the levy will self-destruct in 2020.
The state is required in perpetuity, meanwhile, to boost aid to schools to match inflation, under voter mandates.
Schools are getting about $330 million a year from last year’s voter-approved Proposition 123, which was pushed through by Ducey. But that funding continues only through 2025.
Ducey said Tuesday, for the first time, that Arizona has no choice but to keep those sales-tax revenues coming.
“I’ve not worked as hard as I’ve worked on Prop. 123 to get funding to K-12 education to let us fall off a cliff,” he said. “So of course we’re going to work to make sure we put more money into K-12 education every year I’m governor.”
If the Republican governor is re-elected next year, he would remain in office through 2022.
Current state aid is about $5 billion a year, including the sales-tax surcharge money OK’d by voters through 2000’s Proposition 301. Using that number, if those dollars were to disappear it would amount to a 6 percent cut in state aid.
Put another way, it would reduce annual per-student aid by more than $270 to $4,256. Arizona already is close to the bottom of all states in the dollars it puts into K-12 education.
Ducey’s comments on the extension are a bit of a shift for him. He was elected in 2014 on a vow of no new taxes.
In fact, he gained statewide publicity as state treasurer when he opposed a 2012 ballot measure that would have made permanent a temporary 1-cent sales tax hike pushed through by then-Gov. Jan Brewer to balance the budget and prevent more Draconian cuts to K-12 education. Ducey argued at that time that the extension was, in fact, a new tax since the old one was set to expire.
But he bristled Tuesday when it was pointed out that Proposition 301 also was adopted in 2000 as a temporary tax with a self-destruct date, albeit in 20 years versus three.
“This is a funding program,” he said of reauthorizing the six-tenths-of-a-cent sales-tax levy.
But the governor was not willing Tuesday to give the same level of support to the idea of expanding the tax to a full penny, which some education supporters want. That would raise an additional $400 million a year for schools.
All he would say is that he is “negotiating” with the education community about ways to make Proposition 301 better. He would not provide specifics.
Also left unclear is when to take the issue to voters.
It could go on the ballot as early as 2018. But that’s also the same year Ducey is up for re-election.
And House Speaker J.D. Mesnard told Capitol Media Services there is no rush, as a 2020 election could reauthorize the levy in time to ensure there is no funding gap.
“I would think that a higher turnout election of 2020 would be better for the success of the measure,” he said. “But if folks think ’18 is a better year, we can certainly have that conversation.”
It would be up to Mesnard and Senate President Steve Yarbrough to line up the legislative votes to put the issue on the ballot.
The idea of having legislators extend the levy themselves has not even been discussed, at least in part because it would require a two-thirds vote of both the House and Senate. While some lawmakers appear willing to refer the question to voters, they see the idea of raising taxes themselves as political suicide.
Mesnard said he thinks he could corral the votes to put the issue of maintaining the levy on the ballot. “I think there would be a lot of support for extending it,” he said. “Expanding it, I think is going to face a bigger hurdle.”
He said the only way to put the question of boosting the tax to a full penny on the ballot would be if education groups gathered the signatures in an initiative drive. “Obviously, then, we’re not involved at that point,” he said.
Whether voters would go along is an open question. A poll conducted by an education group at the end of last year found 77 percent of those questioned saying they would support renewing the current tax. But when asked about rounding that up to a full penny, support dropped to 65 percent.
