Governor Doug Ducey, the ice cream man hired by Koch Industries to run their Southwest subsidiary formerly known as the state of Arizona, called a Special Session beginning today to approve the tentative settlement agreement in Cave Creek Unified School District, et al. v. Ducey. Read the special session proclamation here.
How does the ice cream man describe this settlement on his web site? “MORE money for schools, WITHOUT raising taxes” . . . “Put More Dollars In Schools And Protect General Fund Budget.”
Tim Steller of the Arizona Daily Star described the settlement more accurately. Steller: Complicated K-12 plan avoids simple alternatives:
The schools are being paid the inflation funding they are owed with money that is already theirs. It’s like taking money out of their bank account, handing it to them and saying, “Here’s that money we owe you.”
This tentative settlement is a complete capitulation by the education and child advocacy groups representing the plaintiff school districts in this case. It is a breach of ethics owed to their clients, and a breach of the moral obligation owed to the children of Arizona. They are snatching defeat from the jaws of victory. They should be ashamed for having agreed to such a bad deal.
One commenter described this situation as similar to “battered spouse syndrome.” They are trying to please their abuser to make the abuse stop. We all know how this ends.
Tim Steller’s commentary goes into more detail, Steller: Complicated K-12 plan avoids simple alternatives:
Members of the Legislature unwrapped the education-funding package Tuesday and revealed an unsightly gift.
It’s such a convoluted contraption I can’t help but wonder if this is really the best we can give our schools, kids and teachers.
The Arizona Republic’s Mary Jo Pitzl quoted one observer looking over the proposal for the first time Tuesday as saying it “looks like it was written on three different napkins, from different bars.” Indeed.
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For the Legislature, holding out seems to have worked. The deal would let them slither out of obligations that we the voters made to the schools in 2000 when we passed a sales-tax increase of six-tenths of a cent to go to schools. [Remember, Prop. 301 was a legislatively referred statute to the voters on the ballot.] The proposition included an inflation-funding mandate, which the Legislature stopped paying in 2009 after the recession hit.
There’s a lot to wonder at in the proposal: It would allow the Legislature to stop paying inflation increases if K-12 education ever equals 49 percent of the state general fund, for example. Why that percentage? Is there something to be ashamed of in paying half our general fund to schools?
It also would allow the Legislature to skip inflation funding if state sales tax revenue doesn’t increase by 2 percent in a given year and job growth also stalls. These are big give-backs.
What’s most startling to me is the deal would use increased withdrawals from the state’s land trust to pay for most of the inflation increases that the deal agrees to. Legally, the state land trust may only be used to pay for schools and other, much smaller purposes.
You see where I’m going? The schools are being paid the inflation funding they are owed with money that is already theirs. It’s like taking money out of their bank account, handing it to them and saying, “Here’s that money we owe you.”
When Gov. Doug Ducey first proposed his plan to increase withdrawals from the state land trust to pay for education, he proposed it as $2.2 billion that would be separate from the settlement of the inflation suit [i.e. “new money.”] Now they’re all bundled together as one unholy apparatus.
I say “unholy” advisedly, though not as a Biblical scholar, because the level of withdrawals proposed is worrisome.
Previously, Ducey proposed withdrawing between 5 percent and 10 percent of the trust every year for 10 years. While Ducey is the former state treasurer and informed on this subject, he ran into an unmovable obstacle in current treasurer Jeff DeWit, who said Ducey’s plan was financially unwise because it proposed withdrawing too much from the trust.
I talked to DeWit on Tuesday, and he said the withdrawals in the plan revealed Tuesday — a proposed 6.9 percent-per-year rate — would add up to almost the exact same amount as under Ducey’s plan. He and the state Board of Investment maintain that 3.75 percent per year is the maximum financially responsible amount, he said. Right now, withdrawals are capped at 2.5 percent, so that’s 1.25 percentage points of wiggle room right now.
Like legislative Democrats, DeWit, a conservative Republican, would instead use the state’s budget surplus to pay for the required inflation increases. He noted that, because the plaintiffs in the suit were willing to accept about 70 cents on the judicially approved dollar of inflation funding, the Legislature could simply tap the surplus to pay for it now.
“This is like we just agreed to let them burgle our house, steal our money, then give back 70 percent of it,” state Sen. Steve Farley, D-Tucson, told me. “Then we agreed not to press charges because the trial would take too long.”
Instead, they are relying on voters approving two separate ballot issues — one to increase withdrawals from the state land trust and the other to alter the inflation-funding terms of Prop. 301.
“Why would we not just jump on that [use the state’s budget surplus to pay for the required inflation increases] , solve this thing and finish it on Friday?” DeWit asked. The governor, he said, “can still accomplish his goals, solve the schools’ lawsuit, and have money to spare without touching the schools’ trust.”
Unspecified in that critique was one of the governor’s key stated goals — cutting taxes every year of his term. It bears keeping that in mind because it is the only way to understand why the Legislature and plaintiffs would agree to such a deal when we could just pay our bill straight up, though we might need to cut some existing tax loopholes or credits while tapping the surplus.
Why instead agree to this complicated deal? From the Legislature’s and governor’s perspective, it allows them to not only avoid any appearance of raising taxes but also perhaps to cut them more.
It is always about not paying taxes. When Governor Ducey and our lawless Tea-Publican legislature cut taxes for their corporate cronies once again in the next legislative session, and they will, GOP lawmakers eye tax reform in 2016, the structural revenue deficit Arizona faces will grow worse, especially during a recession which appears likely, so the pittance of extra money that the school districts are settling this case for will be clawed back by the legislature under the terms of this settlement agreement. The promise of extra money is an illusory promise. And the governor and our lawless Tea-Publican legislature have never demonstrated good faith in the past — after all, the lege stole Prop. 301 money from the school districts giving rise to this case. What would lead you to believe they can be believed now?
Tim Steller asked Tim Hogan, one of the plaintiffs’ lead attorneys, his perspective and he essentially said there was no alternative.
“The point is to get money to schools now, compared to the risk of going forward and the risk of litigation,” he said.
It would probably have taken two more years to resolve the case, he said. The land trust funds “are what were on the table.”
“Here’s my interest: Getting money in the classrooms as quickly as possible,” Hogan added. “I’m convinced that balanced against the risk we face, against the delay, this is a good deal.”
But against the alternative of actually paying our bills straightforwardly, without gimmicks or complications, this is a real stinker.
Democrats in the legislature, despite having offered a settlement plan that could reasonably serve as the starting point of a settlement, are also acting as if there is no alternative. They were completely shut out of the settlement negotiations.
The Arizona Capitol Times (subscription required) reports today that Democratic leaders in the House late Wednesday night agreed to provide the necessary votes to fast-track the proposal that they largely oppose. Lawmakers fast-tracking special session education funding package:
Lawmakers will likely vote on a deal to settle the five-year lawsuit over education inflation funding today, after Democratic leaders in the House late Wednesday night agreed to provide the necessary votes to fast-track the proposal that they largely oppose.
Gov. Doug Ducey called a special session at 8 p.m. Wednesday night to approve the package, which would provide $3.5 billion in additional education funding over 10 years, and lawmakers returned to the Capitol for a procedural first reading of the bills. The Arizona Constitution states that all bills must be read on three separate days before being approved “unless in case of emergency, two-thirds of either house deem it expedient to dispense with this rule.”
Democrats agreed to help Republicans suspend that rule in order to push the package through in two days, even though many oppose the plan.
Democrats have argued that the proposal only pays schools about 70 percent of the funding that lawmakers illegally withheld during the recession. They also complained that the deal would not simply pay schools, but would enact several constitutional changes to give lawmakers more leeway in not keeping up with inflationary increases during economic downturns.
Democrats in the House, who were originally opposing any attempt to fast-track the proposal, said they were concerned that the public wouldn’t have time to comment on the legislation in a one-day special session. But they agreed to provide the necessary votes to help Republicans speed the process up because they received a briefing on the package on Tuesday afternoon, and by the time the vote takes place tonight, details will have been available for three days, according to House Democratic Spokeswoman Murphy Hebert.
The House and Senate Appropriations committees began considering the bills at 8:30 a.m. The bills will then head to both chambers’ Rules committees and Republican and Democratic caucuses. Both chambers are scheduled to debate and take a final vote on the package at 1:30 p.m. today.
Because of the constitutional changes, the entire package must still be approved by voters at a special election on May 17.
What about the cost of this special election? Who will pay for the cost of this special election? We are pissing away more tax dollars.
And what happens if the voters of Arizona rise up and reject this abomination of a settlement agreement that sells out our children only so that Governor Ducey and our lawless Tea-Publican legislature can hand out yet another tax cut to their corporate cronies? There will be no settlement agreement if it is rejected by the voters in May.
Does the court retain jurisdiction of this case, and the case returns back to the posture it is in today? Will this case then play out in the courts for another two years, or more? If so, the plaintiffs in this case have only allowed our lawless Tea-Publican legislature to delay the inevitable even longer than the present litigation would have taken in court.
And if the voters somehow do approve this abomination of a settlement agreement, will State Treasurer Jeff DeWit file a lawsuit to protect the beneficiaries of the state land trust from reducing the corpus of the trust?
This is a failure all around.