Tag Archives: ALEC

A Cautionary Tale

Cross-posted from RestoreReason.com.

Arizona may be at, or near, the bottom in many education related statistics, but when it comes to a school choice friendly environment, we are #1. That’s why, when executive committee members of their state school boards associations got together last year in Oakland for the Pacific Region National School Boards Association meeting, the Arizona team shared their story of eroding legislative support (funding and supportive legislation) for our district schools as a cautionary tale.

It all began in Arizona with the Legislature’s authorization for charter schools in 1994 and of course, open enrollment so parents could choose to enroll their children in any public school in the state, not just in their district. This mattered because 1) it told parents they were free to look for greener grass elsewhere, versus watering the grass they had, and 2) all that mattered was their child’s education, the hell with the rest.

Arizona’s first charter school opened in 1995. Now 180,000 students attend about 550 charter schools in Arizona equating to 16% of the students and 30% of the public schools. In 2010 in fact, Arizona had the highest number of charter schools per capita in the nation. The competition created with district schools wasn’t all bad. Many district schools offer fuller curriculums with more specialty programs than they once did. But, for corporate reformers, that wasn’t enough. Continue reading

Happy Valentine’s Day…NOT!

Cross-posted from RestoreReason.com.

On this Valentine’s Day, I thought I’d ask, when it comes to our public schools students in Arizona, “who loves you baby?”  Yesterday, I was listening in on the AZ House Education Committee meeting. There were many bills on the agenda, but I was primarily interested in HB 2394; empowerment scholarship accounts [ESAs]; expansion; phase-in. I wasn’t hopeful the bill would die, as its companion bill SB 1431, had already been given a due-pass by the Senate Education Committee. As expected, HB 2394 followed suit on a 6–5 vote as did HB 2465, which will allow all students eligible for an ESA account to remain on the program until age 22 and for up to $2,000 a year to be put into a 529 savings account.

The passage of these bills, along with the companion ones in the Senate, demonstrate the disdain many GOP legislators have for our district schools and, for the underpaid educators who toil within. This, because ESAs divert more general fund revenue per student to private schools than district schools receive. As reported by the Arizona School Boards Association, an ESA student, on average, costs the state general fund $1,083 more in grades K–8, and $1,286 more in grades 9–12 than a district student. This is in part because there are many school districts that enjoy a fair amount of locally controlled support in the way of overrides and bonds. The state therefore, is relieved of providing equalization funding to them, but when students leave to go to private schools, all the funding must come from the state general fund. ESA students also receive charter additional assistance funding of roughly $1,200 per student, which district schools do not receive. Turns out that the claim of voucher proponents that they save the state money, is not just “alternative facts” but totally untrue. And, although voucher proponents love to claim there is no harm to district schools when students take their funding and leave, the truth is that about 19 percent of a districts costs are fixed (teacher salaries, transportation, facility repair and maintenance, utilities) and can’t be reduced with each student’s departure. Continue reading

Ooops, there it is!

Cross-posted from RestoreReason.com.

We knew it was coming and awaited it with dread. And, drumroll please…crash goes the cymbal! Yes, here it is, this year’s attempt to exponentially expand Arzona’s voucher (Empowerment Scholarship Accounts, or ESA) program. Of course, the American Legislative Exchange Council’s (ALEC) chief water carrier for Arizona, Senator Debbie Lesko, R-Peoria, is the one proposing the expansion. Lesko claims the expansion of ESAs will “not lead to a mass exodus of children from public schools.” I, for the most part, agree with that statement since Arizona parents have made it clear district schools are their choice with 80% of students attending district schools and another almost 15% in charter schools.

But, to infer a massive voucher expansion will have no negative impact on district schools is disingenuous at best. No matter how slowly students may attrit from district schools, each student’s departure leaves behind a 19% budget shortfall. That’s because there are numerous fixed costs (teacher salaries, facility maintenance, utilities, buses, etc.) that cannot be reduced student by student. The siphoning of dollars from our district schools has been steadily increasing and just exacerbates an already inadequately resourced system.

This isn’t the first year the Legislature has attempted to expand the voucher program. In fact, they’ve been successful in expansions every year since the ESA program was launched in 2011. This isn’t even the first time a full expansion has been attempted, with a very similar proposal going down in flames last year due to public outcry and a perceived conflict with securing voter approval of Prop. 123. This year though, Lesko has sweetened the deal by requiring the testing of students attending private schools on vouchers. She says she “doesn’t personally think this requirement is necessary,” but obviously is trying to defuse the argument from voucher opponents that there is no accountability or return on investment for vouchered students. Continue reading

Is It Really School’s Choice?

Representative Vince Leach, R-SaddleBrooke, recently replied to a constituent’s concern about SB1279, Empowerment Scholarships; expansion; phase-in, with:

“You are correct in assuming I am in favor of this bill.  Rather than a long, rambling explanation of my position, I simply refer you to the linked research paper: http://www.edchoice.org/research/2015-schooling-in-america-survey/. Please refer to page 27.  It reveals what I believe most people have missed in the school choice discussion.  And that is, while about ~85% of student attend public schools, given the choice, only ~36% would choose to attend public schools.  SB1279 is narrowly defined, it specifies that qualified student includes a child who meets the family income eligibility requirements for free or reduced price lunches under the National School Lunch and Child Nutrition Acts, rather than the specified educational scholarship. IT is for these reasons and many more that I support this bill.” Continue reading

AZ again at bottom in “50 States Report”

Cross posted from RestoreReason.com.

The Network for Public Education (NPE), a public education advocacy group headed by the Nation’s preeminent public education expert and advocate, Diane Ravitch, released their “A 50 State Report Card” today. As the name indicates, the report card grades the 50 states and the District of Columbia on six criteria: No High Stakes Testing, Professionalization of Teaching, Resistance to Privatization, School Finance, Spend Taxpayer Resources Wisely, and Chance for Success. Letter grades from “A” to “F” were then averaged to create the overall GPA and letter grade for each state.

I was proud to note the study was conducted with the help of Francesca Lopez, Ph.D. and her student research team at the University of Arizona. They assisted in the identification of 29 measurable factors that guided the ratings of the six criteria and created a 0-4 scale for ratings and then evaluated each state on the 29 factors. The graders were tough, with only 5 states earning an “A” grade and no state’s overall grade exceeding a “C.”

Not surprising to anyone who keeps up with Arizona public education, the state ranked 48th, but I assume only because Arizona begins with an “A.”   Arizona’s grade of 0.67 earned it an overall “F”, numerically tying it with Idaho and Texas (in 49th and 50th place), just above Mississippi. Continue reading

Why Ducey’s Promise to Lower Taxes is a Lie

During Governor Ducey’s inaugural address in 2015, he indicated that he would not support higher taxes with: “prosperity moves, and as taxes go up, it moves away. Gone as well are jobs, people and companies that found a better welcome someplace else.” Likewise, during his 2016 State of the State address, he bragged about lowering taxes and assured Arizonans that he will “lower taxes this year. Next year. And the year after.” Yes, he has been consistent about his promise to lower taxes and even to do away with the state income tax. He obviously subscribes to the GOP mantra of supply-side (some call it trickle-down) economics.

The basic theory of supply side economics is that marginal tax rates and less government regulation will help business expand and create more jobs. The Laffer Curve, named after Arthur Laffer, is a central theory of this philosophy and posits that lowering tax rates generates more economic activity eventually leading to more tax revenue. Proponents of this philosophy include the Koch-brothers-financed American Legislative Exchange Council (ALEC), Americans for Prosperity, and the Wall Street Journal’s editorial board. They claim that the nine states without personal income taxes are outperforming the rest of the states and that their success can be easily replicated in those states that abandon their income tax.   The non-partisan Institute on Taxation and Economic Policy (ITEP) however, says that Laffer focused on “blunt aggregate measure of economic growth” to support his contention. The truth says ITEP, is that states with personal income tax, even those with the highest rates, are experiencing as good, or better, economic conditions than those without. Still, there are plenty of examples of governors who insist on leading their states down the proverbial rabbit hole.

Take Governor Sam Brownback for example. When he took the reins in Kansas, he dropped the top income-tax rate by 25%, lowered sales taxes and created a huge exemption for business owners filing taxes as individuals. Now, five years after doubling downhis state lags in job creation, tax revenue is far short of expectations and bond and credit ratings have been downgraded.

In Oklahoma, Governor Mary Fallin and the GOP-led Legislature enacted a quarter-point reduction in the top income tax rate two years ago and corporate tax breaks when oil crude prices were riding high. Oklahoma’s Republican Treasurer Ken Miller, who advocates for revenue-neutral tax cuts, blamed his GOP colleagues for the now “self-inflicted” crisis. Miller said: “Common sense dictates that until the state proves it can live within its means, it really should stop reducing them, yet some ‘thinkers’ continue to advocate eliminating the state income tax – even arguing that the state’s largest funding source and be vanished without a replacement and still fund needed teacher pay raises.” To Arizonans I ask: “sound familiar?”

In Wisconsin, Governor Walker enacted several permanent tax cuts just as the national recession ended and state revenues began to climb. His speech this year to ALEC was all about how his “big, bold reforms took the power out of the hands of big government special interests.” What he didn’t say is that his reforms produced only about half of the jobs he promised and resulted in delayed debt payments and deep cuts to education to balance the budget.

In North Carolina, with all three branches of government now securely under GOP control, money saved from cutting safety net programs wasn’t reinvested into education, job training or infrastructure, but given to the wealthy and corporations in the form of tax breaks. In September, the NC legislature signed a budget into law that provides $400 million in income tax cuts to be offset by taxes on repair, installation and maintenance services.  Alexandra Sirota, who studies tax policy for the NC Justice Center said the affect of the lower taxes “is a huge revenue loser” and that “the revenue losses aren’t fully accounted for in the next few years.”

At the root of it all are ALEC’s questionable economic and fiscal assumptions and faulty analysis. Specifically, these policies include deep cuts in income taxes, particularly for affluent households and corporations; a repeal of state income and estate taxes; and a shift in state revenues from graduated-rate income taxes to sales taxes that are much higher than what exist today. They also include the end of various state-based tax credits for low-income working families; a Taxpayer Bill of Rights (TABOR) that would impose rigid constitutional limits on state revenues and spending; requirements that state legislatures garner two-thirds or other “super-majority” votes to raise any taxes or fees; and other mechanisms to reduce the funds available to finance public services. ALEC also pushes the repeal of state personal and corporate income taxes, which typically provide one-third to one-half of a state’s funding for schools, health care and other services. Finally, ALEC and its supporters fail to acknowledge that public services such as education or infrastructure are important to a state’s long-term prosperity.

Mainstream economic research though, shows that state taxes average less than one percent of a business’ total costs. Extensive economic research indicates that tax-funded public services like education, health, transportation, and public safety are more important for attracting businesses and jobs.  In fact, Paul O’Neill, former CEO of Alcoa and President George W. Bush’s first Secretary of Treasury said: “[As a businessman] I never made an investment decision based on the Tax Code…[I]f you are giving money away I will take it. If you want to give me inducements for something I am going to do anyway, I will take it. But good business people do not do things because of inducements, they do it because they can see that they are going to be able to earn the cost of capital out of their own intelligence and organization of resources.” Robert Ady, of Ady International has assisted in countless business site locations. He says that “subsidies cannot make a bad place good.” Good places are competitive because their long-term business basics (labor, materials, marketing, overhead, and transportation) are solid. As Greg LeRoy, founder and director of Good Jobs First, said in his book The Great American Jobs Scam, “any subsidies are icing on the cake, but the cake is already baked.”

Yet, Governor Ducey insists on following the ALEC playbook with his plan to eliminate state income tax. During his gubernatorial campaign, he promised not to postpone a $225 million corporate tax cut to be phased in over three years. To the Arizona Tax Research Association, Ducey bragged about signing legislation to index the state’s income tax brackets ensuring salary increases that don’t outpace inflation don’t bump earners into higher tax brackets. Ducey claimed it was “an important first step in our mission to reduce income taxes in the State of Arizona every year.”

Stay tuned for the second half of this post in which I’ll explain why I claim Governor Ducey’s promise to lower taxes is a lie. Small spoiler alert…he may be committed to reducing INCOME taxes, but there is WAY more to this story.