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Governor Katie Hobbs Offers a Proposition 123 School Funding Proposal that Helps Arizona’s Public Schools

March 5, 2025 by David Gordon

Seeking to frame the budget debate against MAGA Republicans at the State Capitol, Arizona Governor Katie Hobbs has taken several steps the last couple of days to showcase how her and Democratic priorities are better suited to the needs of Arizonans than their opponents.

Among those steps is a released proposal to renew funding for public schools through an extension of Proposition 123, the measure passed at the ballot box shortly after the Red for Ed Movement in 2018.

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According to a Gubernatorial Press Release, the Governors plan:

“Will deliver a projected $216 million for teacher pay in 2026, and make the funding source permanent. Additionally, public schools will receive an estimated $101 million in flexible funding in FY26, with the increased distribution lasting 10 years. As the state land trust grows, funding will increase, generating further dollars for public schools.”

The funding breakdown:

  • “Enshrine a permanent 5.5% State Land Trust distribution rate by maintaining the 2.5% base distribution requirements (Classroom Site Fund (CSF) and Basic State Aid) and placing proceeds from the 3% distribution into the CSF to provide increases to teacher pay. It forecasts a Fiscal Year 2026 projected increase of $216 million or $158 per pupil.
  • Adds an additional ten-year distribution rate of 1.4%. Funds will be used to increase Base Level funding, adding approximately $101 million in school funding in FY2026.
  • It also reforms the Prop 123 triggers that allow the Legislature to not fund inflationary increases by requiring a 2/3 vote.”

Commenting on her proposal, the Governor wrote:

“We must address the impending expiration of Prop 123, and do it this year. If we fail to act, we are throwing away an opportunity to fund teacher pay raises and give Arizona’s children the opportunity they deserve – all without raising taxes on a single Arizonan. I’m proud my plan delivers $216 million for teacher pay while making funding permanent so no public school needs to worry about paying their teachers with an impending fiscal cliff. I urge members of the Legislature to act swiftly to put a bipartisan Prop 123 extension plan on the ballot for this November. They have already missed one deadline to act on this critical issue, Arizona’s children cannot afford for them to miss another.”

Later, the Governor posted on social media:

Today, I released a plan to extend Prop 123 and highlighted the urgent need for the Legislature to put a bipartisan proposal on the ballot for November 2025.

Arizona's children can't afford for us to wait.

— Governor Katie Hobbs (@GovernorHobbs) March 4, 2025

If we fail to act, we are throwing away an opportunity to fund teacher pay raises and give Arizona’s children the opportunity they deserve – all without raising taxes on a single Arizonan. Let's get this done.

— Governor Katie Hobbs (@GovernorHobbs) March 4, 2025
From Left to Right, House Democratic Leader Oscar De Los Santos, Governor Katie Hobbs and Senate Democratic Leader Priya

Arizona Democratic House Leader Oscar De Los Santos conveyed his support for Hobbs’s plan, offering:

“The Republican-led legislature must stop dragging its feet on Prop 123. Our children can’t wait any longer. Gov. Hobbs has put forward a sensible compromise plan to increase teacher pay & school funding for the long-term — all without raising taxes.”

Democratic Senate Leader Priya Sundareshan voiced her support for the Governors Prop 123 proposal, commenting:

“I am hopeful that the Governor’s plan continues the conversation and pushes us toward a workable compromise. It is deeply disappointing that in almost every aspect the Republican-controlled legislature has chipped away at the state’s ability to adequately provide for our public schools students, teachers, working families, and children with disabilities because of their continued prioritizing of tax cuts for the ultra-wealthy and private school vouchers. We can and must do better — Republicans simply need to get out of the way or get on board with providing for ALL Arizonans.”

Governor Hobbs agrees with Senator Sundareshan’s sentiments that MAGA Republicans at the State Legislature have the wrong the rich come first priorities for Arizonans.

In another press release today that called attention to the ballooning spike in expenses for the Republican Welfare for the Wealthy and MAGA Indoctrination program otherwise known as the Empowerment Scholarship Account Private School Voucher Program, Governor Hobbs remarked:

“The legislative majority continues to use Arizonans with disabilities as their political pawns, even as they refuse to put commonsense guardrails on their favorite entitlement program. While they fight to protect the right of the 1% to spend taxpayer dollars on luxury car driving lessons, ski resort passes, and grand pianos, they’re refusing to fund life-saving programs that support the health and independence of the more that 50,000 Arizonans who rely on the Division of Developmental Disabilities.

“Their negligence is inhumane and fiscally irresponsible, putting countless Arizonans with autism, cerebral palsy, Down Syndrome, and other disabilities at risk of institutionalization, which would make taxpayers foot the bill for more restrictive and expensive care.

“I have now submitted, and updated, a budget proposal that gives pay raises to State Troopers and firefighters, combats Veterans homelessness, secures the border, lowers the cost of child care and housing, and protects critical services for Arizonans with disabilities, including the pre-universal ESA program. I urge the legislature to pass this common sense budget. And if they think they have a better plan to deliver for our constituents, they should show it to the people of Arizona instead of cynically using people with disabilities and their caregivers as hostages to negotiate unclear demands.”

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