Four former state treasurers, all of them Republicans, told The Arizona Republic they would urge voters to reject Prop. 123. A fifth former state treasurer said he was leaning against the measure. Among the 10 others who have held the treasurer’s job since 1974, at least four oppose Prop. 123, two could not be reached, and two are dead. One is leaning against it.
(From left, current Arizona Treasurer Jeff DeWit; Dean Martin, treasurer from 2007-2010; Carol Springer, treasurer from 1999-2003; Ernest Garfield, treasurer from1971-1973; Morris Herring, treasurer from 1969-1971; and Bart Fleming, treasurer from 1973-1978.) Credit: The Arizona Republic
Doug Ducey, the ice cream man hired by Koch Industries to run their Southwest subsidiary formerly known as the state of Arizona, is the only state treasurer in the past 45 years known to support the measure. The cheese stands alone.
This is a big red flag on Prop. 123 that voters should seriously consider.
The Arizona Republic reports, Prop. 123 is a flop with former Ariz. Treasurers:
If Arizona’s former state treasurers decided the fate of Proposition 123, lawmakers and educators would have to go back to the negotiating table.
The former treasurers, who controlled the $5 billion land-trust fund that would provide increased education funding under Prop. 123, believe the deal will cost more than the fund can support.
“There’s more resources they could use for education. But the way that they crafted it they weren’t interested in a long-term sustainable solution,” said Dean Martin, who served as Arizona treasurer from 2007 until 2011. “You don’t need to trust me. Ask yourself if you think a politician can predict where the market is going to be for the next 10 years.”
“To me, it’s a temporary political Band-aid on a long-term challenge that needs to be addressed by the Legislature,” said Clark Dierks, the treasurer from 1979 until 1983. “They’re going to take a big chunk of money out of something that was intended to be forever. I think that’s wrong.”
The former treasurers’ views stand in contrast to the near-lockstep support for Prop. 123 from the business community and education activists.
* * *
The scattered opponents of Prop. 123 mostly would welcome more funds for education, but say the plan pulls more money from the land trust than it can reasonably replenish over the next 10 years.
* * *
Jeff DeWit, the current treasurer and also a Republican, has been its most prominent opponent, saying it takes too much too quickly from the trust while still leaving schools underfunded.
For whatever their view is worth, the former GOP treasurers, all of whom are no longer in politics, worry about the land trust under Prop. 123.
* * *
“I think they’ll damage (the trust fund),” said Ernest Garfield, who was treasurer from 1971 until 1973. “That was sacrosanct when I was there and I still consider it that way.”
Carol Springer, who was treasurer from 1999 to 2003 and held other elective offices, too, thinks Prop. 123 would set a worrisome precedent.
“The governor, having been a treasurer, should have understood that the trust is a pretty special trust. The idea that you can dip into it for temporary budget relief is a really, really bad idea,” she said.
“Having been the chairman of the Appropriations Committee in the Senate besides being the state treasurer, I’m very familiar with the state budget. I understand how it works. … If you can do this once, you can do this more than once. When times get kind of rough, you can just go tap that pot again. I just think that’s such a violation of the concept of the trust in the first place.”
Elliott Hibbs, who served from 2006 to 2007 and later worked with the state’s Department of Education, said he hasn’t studied the issue enough to judge its impact on the trust fund. Still, he worries that taking more from the trust will slip into an unaffordable habit he likened to Congress borrowing from the Social Security trust fund.
“I just have a concern from that perspective. That’s like robbing from the future of our children,” he said. “This is tough for me, having been in education and knowing this solution would provide substantial money for education. Nevertheless, those concerns for me are making me wonder whether I will vote for it or not. … I’m leaning more to opposing it than supporting it.”
Like DeWit, Martin thinks the trust fund could support higher payments than it currently makes. Each December the state calculates a five-year average of the trust fund balance and sends 2.5 percent of that figure to the beneficiaries. The five-year balance is intended to smooth out the investment market’s ups and downs.
The 2.5 percent distribution amount could be permanently lifted, perhaps even doubled, DeWit says, without jeopardizing the fund. Martin favors a range, perhaps from 2 percent to 10 percent, which would be adjusted annually to reflect the best current estimate of how the state’s investments may do.
The treasurers may evaluate Prop. 123 with a mathematical detachment that most do not.
The treasurers are familiar with the volatility of investment markets, where nimble trading can mean the difference between adding or losing tens of thousands of dollars in a single day.
In January alone, the state’s trust fund dropped about half the money it would need to pay for a year under Prop. 123. The fund recovered those losses by March, but investors can see such movement as unnerving.
The treasurers also take the long view.
The past five years have been the best in the trust fund’s history, delivering returns exceeding 7.4 percent. That’s in part because financial markets have bounced back from the worst recession since the Great Depression. Matching that kind of performance for years more seems unlikely, the former treasurers said, and so does avoiding another recession for 10 years.
The current economic expansion began in June 2009 and is more than 73 months long. Since 1945, the average expansion has lasted 60 months, or five years. The longest lasted 10 years. The nation is seven years into the current expansion.
Last fall, before lawmakers sent Prop. 123 to voters, DeWit hosted five of the former treasurers in a reunion of sorts. Garfield and Martin said none of them backed the idea that has taken shape.
This “robbing Peter to pay Paul” plan is a bad settlement, and sets a bad precedent by letting our lawless Tea-Publican legislature and governor off the hook for their theft of funds from Arizona’s children in order to free up money to give tax breaks to their corporate cronies. Prop. 123 will only continue business as usual in the GOP culture of corruption in Arizona.
Hold these lawless Tea-Publicans accountable for their crimes. Why you should vote no on Prop. 123, then kick every lawless Tea-Publican out of office.