Just over two years ago, opponents of the 2018 Invest in Ed initiative celebrated a court victory throwing that tax-hike plan off the ballot.
“Not only was the initiative poorly crafted, it was the wrong plan,” Jaime Molera, the chair of the opposition campaign, said in August that year. “It would have harmed all taxpayers, small businesses, and would not have delivered on its promises for teachers, while weakening education reforms that were achieved in a bipartisan fashion under Prop. 301.”
What was the right plan? I guess we’ll never know.
Two years passed, and everybody knew the supporters of Invest in Ed were coming up with a similar initiative for this year’s election.
The opponents didn’t do what they should have. They didn’t come up with an alternative plan to increase funding for education or find a compromise with the Invest in Ed supporters.
So now, Molera and his supporters at the Arizona Chamber of Commerce are in the position of fighting an Invest in Ed initiative again. But this time, the retooled plan has unexpectedly made the ballot, despite their attempts to have it removed by the courts.
We will be voting on a plan to increase income taxes on the wealthy to increase pay and hire teachers and support staff.
If the initiative passes, there will be a 3.5% surcharge on income over $250,000 for individual filers, or income over $500,000 for married couples. The tax increase affects only the income beyond those two thresholds, so income below that will still be taxed at the 4.5% rate.
The idea appears likely to pass. A Monmouth University poll of Arizona voters released last week showed respondents favoring what is now known as Prop. 208 by a 66% to 25% margin.
The opponents should have known, and they should have done something about it. After all, the chamber has supported some tax increases for education in the past. But now, they’re left criticizing this one on the questionable premise that it will ruin the economy.
While it’s true that the Invest in Ed plan has flaws and dangers, it is the only plan on the table. And recent data tell us we need to do something now.
One sign came out Thursday, when the Arizona School Personnel Administrators Association put out its annual survey showing the state’s ongoing teacher shortage. Statewide, there were about 6,100 teacher vacancies, the survey showed. Of those, about 28% have gone unfilled by a qualified teacher.
In other words, those approximately 1,700 unfilled positions have been filled by long-term substitutes, by existing teachers working overtime, or other jury-rigged solutions.
Teachers have been fleeing the profession in Arizona for years, and the COVID-19 pandemic has only aggravated the situation. The survey found 326 teachers who have resigned or retired due to the pandemic.
This K-12 education crisis is nothing new. It provoked the Red for Ed teachers’ strike in 2018, and that forced Gov. Doug Ducey to come up with his “20 by 2020” plan for teacher pay raises. The idea of that was that teachers would receive a 20% raise over the next three to four years.
Depending on the district, it hasn’t quite worked out that way for many teachers. Some districts, such as Tucson Unified, spread the pay out, not just among teachers, but also to support staff, meaning teachers didn’t get the full 20% boost.
In any case, the data shows we still haven’t reached a rate of teacher pay that would forestall shortage. In fact, we remain in the bottom five among all states, even after Ducey’s pay raises kicked in, said Justin Wing, the human-resources director for Washington Elementary School District.
Wing is the past president of the Arizona School Personnel Administrators Association and is the person who has conducted the annual survey of school districts. He says pay is probably the top factor driving Arizona’s teacher shortage, followed by various factors within the category of working conditions.
“I still think pay is the No. 1 issue,” Wing said. “Starting pay has gotten better, but I’m thinking of lifetime earnings.”
Arizona also remains in the bottom 5 states for overall, per-pupil education funding, according to the U.S. Census Bureau’s most recent rankings. Arizona tied with Oklahoma for 48th place at $8,239 per pupil, ahead of Idaho and Utah.
The census rankings are based on figures from the 2018 fiscal year, so Arizona’s spending has likely risen, but Mississippi was well ahead of Arizona at $8,935 per pupil that year and could still have retained its lead.
Now, it’s true that Invest in Ed has drawbacks. I am most disturbed by the fact that middle-income brackets don’t have even a token income-tax increase. This is a burden we all should be sharing, I believe.
And I question how much money the initiative will really raise. I asked David Cohen, president of BeachFleischman accounting firm, about the ability of wealthy people to avoid this surcharge.
“The higher income you are, the more access you have to professionals who will help you minimize your tax, as well as certain maneuvers that will reduce their income — legally,” he said.
But as David Lujan, who is leading the pro-208 campaign, noted, the top 1% who would pay this surcharge saved more than that in the 2017 Trump tax cut.
And Arizona’s lower- to middle-income families are struggling in the pandemic economy. In that sense, this might be the best moment to limit tax increases to the wealthy alone.
The Arizona chamber is among many business groups opposing the initiative, warning that economic catastrophe and damage to small business could result. I am skeptical.
First, their credibility is questionable after they warned the minimum-wage increases we passed in 2016 would cause economic catastrophe. Plainly, they didn’t.
Second, while for many small-business owners, business income is their personal income, it’s not as if they’re reporting their gross income to the IRS. They report their net income —revenue minus expenses. In other words, if they report $500,000 in income, that is really income in most cases.
To be fair to the chamber, it has not opposed every increase in taxes or education funding that has come around. In fact, it supported Prop. 301 in 2000, the extension of Prop. 301 in 2018, Prop. 100 in 2010, Prop. 123 in 2016 and the more recent 20 by 2020 pay increases.
“The claim from some quarters that the business community has been sitting on its hands doesn’t comport with reality,” said Garrick Taylor, executive vice president of the chamber. “We’ve never said the job is done, but we would say that Prop. 208 is the wrong policy at the wrong time.”
That’s certainly a defensible position. But it would be much more defensible if the chamber and other opponents of Invest in Ed had used the years since 2018 to come up with an alternative that addresses the ongoing crisis that has school districts scrambling for teachers now.
