Proposition 123: Read the fine print, folks

By Craig McDermott, crossposted from Random Musings

In a few days, early voting will start for May’s special election when the voters will consider Proposition 123, a plan approved by the legislature to get the voters to get the lege out from under a court order to properly fund public education.

 

Since I may be the only observer in the state to not weigh in on the measure, it’s time for me to do so.

 

For readers with short attention spans:

It’s more than a bad idea; it’s a scam.  I am voting against it and recommend that you also vote against it.

For readers with longer attention spans:

When Arizona became a state, millions of acres of land were set aside in a trust administered by the state.  It was allowed to sell off a portion of those lands every year with the revenue being earmarked to help support a number of beneficiaries, primarily public education in Arizona.

If approved, the measure would allow the governor and the legislature to sell off state trust lands at a faster pace, bringing down the overall value of the trust, ostensibly using the increase in short term revenue to bolster public education funding here in Arizona.

The measure is something that is actually *bad* for Arizona public education, and even worse, it doesn’t look like that the authors of the measure ever intended help public education.

People as ideologically diverse as five current and former Arizona state treasurers and former congressman Ron Barber think this is a bad idea.

These aren’t people with whom I am often in agreement (including Barber, they are, one and all, far too conservative), but they are right on this.

Their evaluations of Prop 123 are far more eloquent than anything I can come up…but that won’t stop me from chiming in with a few points. 🙂

 

Firstly, it’s a scheme to sacrifice the future to pay for the present.

There are fables/aphorisms/fairy tales/whatevers to that fit here –

For people who are weary of the constant battle to support education in Arizona, or have just become so desperate to temporarily stave off further damage to the state’s education system, there’s the one pointing out the lack of wisdom in “eating your seed corn“.

From TheFreeDictionary.com (linked above) –

To eat the corn which should be saved for seed, so as to forestall starvation; – a desperate measure, since it only postpones disaster.
any desperate action which creates a disastrous situation in the long-term, done in order to provide temporary relief.

 

For the people who look upon the state’s trust lands with covetous eyes, there’s the one about a goose and some golden eggs.

From UMass.edu

One day a countryman going to the nest of his goose found there an egg all yellow and glittering. When he took it up it was as heavy as lead and he was going to throw it away, because he thought a trick had been played on him. But he took it home on second thoughts, and soon found that it was an egg of pure gold.

Every morning the same thing occured, and he grew rich by selling his eggs. As he grew rich he grew greedy; and thinking to get at once all the gold the goose could give, he killed it and opened it only to find nothing.

Greed often overreaches itself.

 

Secondly, there’s the people who are supporting the measure oh-so enthusiastically, almost piously.

Prop123 committee

Sharon Harper, the chairman of the political committee formed to spend money, is the CEO of Plaza Companies, a large real estate firm/speculator, and W.J. “Jim” Lane is the mayor of Scottsdale.  A place where the most appropriate Christmas gift for the majority on the city council (of which he is the undisputed leader, both legally and practically) would be lip splints.

Needed because when a deep-pocketed developer walks into the room, they pucker up so intensely that they may sprain something.

This committee has raised nearly $4 million to spend in support of the scheme –

Prop123 committee2

 

In contrast, the committee formed to oppose the measure has raised slightly less –

Prop123 committee4

The committee is strongly supported by big business, getting more than $1.2 million in funding from business entities –

Prop123 committee3

To be sure, the people behind those business entities are ponying up some of the personal money (one page from the same campaign finance report) –

Prop123 committee5

To be blunt, these are people whose definitions of “right and wrong” overlap with their definitions of “sufficient and insufficient ROI”.

 

Thirdly, and perhaps most damning of all, there’s the “fine print” of the proposal.

Not only is there nothing that forbids the legislature from cutting General Fund appropriations for public education by the same amount of revenue generated by trust land sales (or more!), there is “poison pill” language that allows the lege to massively cut education under circumstances that the lege itself can create.

The text of the proposal, from the bill passed by the lege (emphasis added) –

2.  Article XI, Constitution of Arizona, is proposed to be amended by adding section 11 as follows if approved by the voters and on proclamation of the Governor:

11.  Schools; inflation adjustments; exceptions; definitions

Section 11.  A.  On or before February 1 of each year, if the state transaction privilege tax growth rate and the total nonfarm employment growth rate are each at least one percent, but less than two percent, the director of the office of strategic planning and budgeting, or its successor agency, and the director of the joint legislative budget committee, or its successor agency, shall jointly notify the governor, the president of the senate and the speaker of the house of representatives.  On receipt of the notification, the legislature is not required to make the inflation adjustments required by section 15-901.01, Arizona Revised Statutes, for the next fiscal year.

B.  On or before February 1 of each year, if the state transaction privilege tax growth rate and the total nonfarm employment growth rate are each less than one percent, the director of the office of strategic planning and budgeting, or its successor agency, and the director of the joint legislative budget committee, or its successor agency, shall jointly notify the governor, the president of the senate and the speaker of the house of representatives.  On receipt of the notification, the legislature shall not make the inflation adjustments required by section 15-901.01, Arizona Revised Statutes, for the next fiscal year.

C.  Beginning in fiscal year 2024-2025, on or before February 1 of each year, if the total amount of general fund appropriations for the Arizona department of education, or its successor agency, is at least forty-nine percent but less than fifty percent of the total general fund appropriation for the current fiscal year, the director of the office of strategic planning and budgeting, or its successor agency, and the director of the joint legislative budget committee, or its successor agency, shall jointly notify the governor, the president of the senate and the speaker of the house of representatives.  On receipt of the notification, the legislature:

1.  Is not required to make the inflation adjustments required by section 15-901.01, Arizona Revised Statutes, for the next fiscal year.

2.  May reduce the base level for the next fiscal year by the amount of the inflation adjustments required by section 15‑901.01, Arizona Revised Statutes, made for the current fiscal year.

D.  Beginning in fiscal year 2024-2025, on or before February 1 of each year, if the total amount of general fund appropriations for the Arizona department of education, or its successor agency, is at least fifty percent of the total general fund appropriation for the current fiscal year, the director of the office of strategic planning and budgeting, or its successor agency, and the director of the joint legislative budget committee, or its successor agency, shall jointly notify the governor, the president of the senate and the speaker of the house of representatives.  On receipt of the notification, the legislature:

1.  Is not required to make the inflation adjustments required by section 15-901.01, Arizona Revised Statutes, for the next fiscal year.

2.  May reduce the base level for the next fiscal year by two times the amount of the inflation adjustments required by section 15-901.01, Arizona Revised Statutes, made for the current fiscal year.

E.  If the inflation adjustments required by section 15‑901.01, Arizona Revised Statutes, are not required to be made or are prohibited from being made pursuant to this section for a fiscal year, the omitted inflation adjustment amounts:

1.  Are not required to be paid or distributed in any subsequent fiscal year.

2.  Become a part of the calculation of the base level for subsequent fiscal years.

F.  If base level reductions are made pursuant to subsection c or D of this section for a fiscal year, the reduced amounts:

1.  Are not required to be paid or distributed in any subsequent fiscal year.

2.  Do not become part of the calculation of the base level for subsequent fiscal years.

G.  This section preserves the authority vested in the legislature pursuant to this constitution.

H.  For the purposes of this section:

1.  “Total nonfarm employment growth rate” means the percentage change in the seasonally adjusted total nonfarm employment in this state from the final month of the most recent calendar year to the final month of the immediately preceding calendar year, as reported by the Arizona department of administration or its successor agency.

2.  “State transaction privilege tax growth rate” means the percentage change in the revenues derived from the state transaction privilege tax that are distributed to the state general fund from the most recent calendar year to the immediately preceding calendar year, as reported by the Arizona department of revenue or its successor agency.

3.  Nonseverability

If any portion of this proposition is finally adjudicated invalid, the entire proposition is void.

4.  The Secretary of State shall submit this proposition to the voters at a special election called to be held for that purpose on May 17, 2016 as provided by article XXI, Constitution of Arizona.

The way that this is written, the lege could enact more corporate tax cuts, further reducing state revenue.

And increasing the percentage of education spending as a portion of general fund expenditures (without actually increasing education spending) to the point where they could legally further reduce education spending.

Secretary of State (and Chief of Voter Suppression) Michele Reagan is on board with this scheme too, judging by the rather slanted ballot language crafted by her office –

Prop123 ballot language

People like Doug Ducey and the lege favor Proposition 123, and that’s reason enough to oppose it –

The next time that either one supports something that benefits civil society will be the first time.

 

Information on Proposition 123, including things like ballot arguments filed both in favor of and in opposition to the measure can be found here.

 

6 responses to “Proposition 123: Read the fine print, folks

  1. Phyllis Lindsey

    I’m for voting “no” against Prop.123 and willing to face tax raising money for education instead of developer builders gobbling up the rest of this State under the guise about concern for the children. No mega-mansions on the Grand Canyon rim, no big mall development between Williams and the National Park. Please no sea of roofs springing up like mushrooms across beautiful valleys. Highways are full of traffic already! Save our land!

  2. The Republican legislature gives education funding an extremely low priority. This is not so obvious upon hearing their words, but by their actions. Republicans want large tax breaks for the wealthy, believing trickle-down economics will do the rest. Sometimes they just steal the money. The Arizona Supreme Court, in its unanimous January 9, 2013 ruling, held that the legislature violated the state constitution when it, in 2009, diverted $20 million from the Arizona Land Trust Fund to deal with its general fund shortfalls. Basically, Republicans can’t be trusted with education and the sooner most are voted out of office the better for Arizona.
    The Arizona Land Trust Fund bailout is analogous to this. You’re in need of a little help (funding), so that you can buy some food (education) for your family. The kind Republican, while he’s distracting you from his true intentions by telling you how much he cares about your plight, cautiously, secretly picks your pocket. Then he hands you your own money, for which you feel truly, truly grateful.

  3. The standard retirement advice to seniors is to not take out more than 4% a year from one’s asset account. That way, a person will not outlive their savings.

    In this case, it looks like Arizona will be taking about 7% a year from our collective savings account. This is not sustainable.

    Lynda’s point about voting out Tea publicans is highly optimistic. Arizona is dominated politically by conservatives. Affluent conservative retirees have very high voting turnout, low income and Hispanic voters have very low turnout. Losing Janet Napolitano to the Obama administration was a huge political blow.

    I too think it will pass, but I also think in ten years there will be even fewer resources, and by then, we will have mostly private and charter schools. Public education is already on the ropes and it will not take much to finish it off.

  4. Frances Perkins

    I completely understand both arguments. People ask me what they should do on 123 and I say I don’t know. I would love to vote no, as it is obvious this is a flawed gimmick to get Ducey off the hook immediately with his number one priority, not schools, but no taxes ever for anything, and criminal tax cuts when the State has so many needs. Ducey is obviously the Arizona division of Koch Industries. And Biggs and Gowan only care about how they look in the Republican primary for Congress. Biggs smug, arrogant attitude on the Horizon show reveals this completely, and Gowan is just a buffoon. But the political reality calculus is not good for real school reform, meaning more real money for public schools, not the charter school, private school, vouchers we are getting, masked as “reform”, nor getting real money for school, not just the amount they stole, as 123 gives. Anytime Ducey uses the word reform, look out, its bad for the State. He wants to “reform” the Supreme Court by packing it. To paraphrase from the King and I, he wants to “reform” is out of all we own. Back to 123, as unpleasant as it is, it is the only way currently to get money to school now, as terrible as it is. Linda is right, only when pro public school legislators are in the majority in at least one house of the legislature, is anything positive going to happen.

  5. Very thorough analysis Craig. Just have two points. One is that those of you on the “NO” on Prop 123 side think those of us on the “YES” side just don’t understand all the implications of this ballot measure. Let me assure you, we do know and we have serious concerns. That’s why we are counting on all Arizonans to pull their head out of their collective asses and vote the public education hating Tea-publicans out of office!

    Secondly, for those of you on the “NO” side, what is your plan? Five more years of litigation that might result in no additional funding for schools? In August 2015, the Washington State Supreme Court sanctioned its Legislature $100,000 per day for contempt of court in their refusal to comply with a January 2014 order to fully fund education. Even this did not force the WA Legislature to comply. The apparent truth is that the ONLY power the people have left is their individual and collective vote! Our elected officials pretty much do what gets them re-elected and at least in Arizona, that means just about anything as long as they have a “R” next to their name. Until we can change this, we will keep on getting more of the same.

    No matter what happens with Prop 123 (I suspect it will pass), I hope all of us who understand the criticality of community-based public education will come together to elect candidates who will truly represent our values.

  6. American Vendetta

    Well said.