Tag Archives: Grand Canyon Institute

Voter Approval of Prop. 126 will Cut Education and Road Funding

If voters approve Prop. 126 on Nov. 6, the state will lose $250 million annually in current funding for education and counties will have a dramatic shortfall in money for road improvements.

The Grand Canyon Institute estimates that the education sales tax renewal will lose one-third of
revenues if Prop. 126 passes, which would currently amount to $250 million annually. See Consequences of Prop. 126: $250 million cut to education, future cuts to transportation funding and higher taxes on goods

The Protect Arizona Taxpayers Act would amend the Arizona Constitution to restrict state and municipal governments from imposing any taxes on services which were not already in place as of Dec. 31, 2017.

What are “services”

Currently, “services” encompass 33 percent of revenues for statewide sales taxes. When this 33 percent exclusion is applied, prospective education sales tax revenues decrease $250 million annually. The “service” category includes hotels stays, bars, restaurants, amusements such as tickets to sporting events and movies, insurance premiums, and rentals of cars and real estate.

One consequence of Prop. 126 is the elimination of any taxes on services included within sales tax measures that are scheduled to be renewed in the future. Prop. 126 would reduce revenue by a third from Prop. 301, the 0.6 cent education sales tax set for renewal in 2021.

A similar problem occurs for counties that use the sales tax to fund road improvements. Maricopa and Pima counties have measures expiring in 2025 and 2026, respectively. If Prop. 126 passes, any renewal of those taxes will lose almost 40 percent of their revenue, likely meaning they will seek to raise the tax on goods even higher.

“Voters should not be fooled.  Passage of the proposition would limit opportunities for the state and municipal governments to increase revenue by expanding the sales tax to include more services at some point in the future. Currently, Arizona exempts most services from taxation,” said Dave Wells, research director with the Grand Canyon Institute (GCI).

Too many special tax exemptions

Prop 126 is a special interest proposition has been supported entirely by realtors.  Opposition to Prop 126 includes the conservative Americans for Prosperity, the centrist Grand Canyon Institute (GCI) and Arizona League of Cities and Towns, and the liberal Arizona Center for Economic Progress and the affiliated Children’s Action Alliance.

“Lawmakers have consistently reduced taxes and increased tax exemptions over the past 25 years, leading to a reduction in state revenues by $4 billion annually,” says George Cunningham, chair of the Grand Canyon Institute. “GCI has taken a position against Prop. 126 because Arizona can’t afford to permanently close the door on additional sources of revenue needed for education, roads, public safety, and other essential services.”

Rejection of the ballot measure leaves open the opportunity for taxing services – a broad category of items that could be taxed individually such as child care, nail salons, or financial services, or as an entire category.

Currently, the state sales tax includes goods and some services but together they have become a smaller portion of the economy. As a consequence, the state sales tax brings in $1 billion less in revenue than it did two decades ago.

 

State pays $10,700 subsidy for private school students — 75 percent more than their public school peers

George Cunningham, chairman of the Grand Canyon Institute

“Arizona can’t afford fiscally irresponsible private school subsidies that siphon money away from its public education system,” says George Cunningham, chairman of the Grand Canyon Institute

According to a new policy paper, Arizona’s two private school subsidy programs cost the state $10,700 on average per regular education student who would not otherwise have enrolled in private school. This imposes an additional $62 million cost to the state’s General Fund.

Published by the non-partisan think tank the Grand Canyon Institute (GCI), the policy paper $10,700 Per Student: The Estimated Cost of Arizona’s Private School Subsidy Programs looks at how the state’s two private school subsidy programs — private school tuition tax credit scholarships and Empowerment Scholarship Account (ESA) vouchers — have affected private school enrollment and then estimated a per student cost to taxpayers.  Continue reading

If it sounds too good to be true…

Cross-posted from RestoreReason.com.

Okay, so maybe Governor Ducey and the Legislature really are trying to solve the problem. You know, the one they, and those before them, created by pushing tax cuts, corporate welfare, and school privatization. But, it is REALLY hard to have the faith, when they throw out words like “advance-appropriated.” As in, “we can’t give you all 20 percent right now teachers, so we are going to advance-appropriate it in the next two budgets.”

I googled “advance-appropriate” and got nothing on the first page of search results. On the second page, there was a report from the New America Foundation titled, “Advance Appropriations: A Needless and Confusing Education Budget Technique.”

The New America Foundation appears to be fairly non-partisan with a vision that includes, “Equitable, accessible high-quality education and training over a lifetime”, “A society that promotes economic opportunity for all”, and “Equal representation in politics and participation in accountable governance.” Its Board of Directors includes New York Times Op-Ed Columnist David Brooks, ASU President Michael Crow, and many others from business, higher-education, and journalism.

Their report on advance appropriations referenced above, discusses the practice of this funding mechanism in Congress, and calls such a, “rarely understood budgeting approach that shifts funding into the fiscal year following the year covered by the appropriations process.” Continue reading

Report: $2 Billion Needed to Reach Arizona’s Educational Goals

The Grand Canyon Institute reports that a $2 billion increase in Arizona’s annual funding of K-12 public education is needed to improve high school graduation rates, improve math and reading levels, and raise the number of Arizonans who have a 2- or 4-year degree.

“Arizona has run an austerity budget since the Great Recession,” said Dave Wells, the Institute’s research director. “Achieving the Arizona Education Progress Meter’s goals by 2030 requires new and dedicated funding source There are not sufficient funds from economic growth or potential fund sweeps or savings from other government services to meet these needs.

The Grand Canyon Institute (GCI), an independent, nonpartisan think tank, conducted its analysis based on educational goals defined in the Arizona Education Progress Meter. The goals were established by Expect More Arizona and The Center for the Future of Arizona. 

The $2.1 billion annual increase in public education funding identified by GCI’s research includes investments in:

  • Early Childhood Education — $200 million to meet the needs of children under the poverty line to improve their success in school
  • Teacher Salaries — $686 million to provide a $10,000 flat raise to Arizona’s teachers to address what may be the worst teacher shortage in the country and maximize the recruitment and retention of young teaching professionals
  • Added Interventions—$250 million to achieve goals for third grade reaching, eighth-grade math and high school graduation
  • Refilling prior state investments: $991.million:
    • District Additional Assistance: $352 million
    • All-day Kindergarten: $265 million
    • New School Construction: $284 million
    • Building Renewal Funds: $90 million

Arizona Education Progress Meter

Arizona Education Progress Meter


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