Arizona business and political leaders discussed the ways they’re seeking to increase state funding for public K-12 education during the Arizona Business and Education Coalition’s annual conference in Phoenix on May 22.
Arizona is ranked last in state funding for education, according to the U.S. Census Bureau’s “Public Education Finances: 2013” report released Tuesday, June 2.
“Arizona has consistently been ranked as one of the lowest education systems in the country and the potential of students is being threatened by the failure to adequately invest in education and raise the bar for education standards,” said Mike Huckins, Vice President of Public Affairs for the Greater Phoenix Chamber of Commerce.
“It is understandable that during tough economic times funding cuts and sacrifices have to be made,” Huckins said. “Unfortunately, for over five years Arizona’s public schools have taken the brunt of the state’s cuts.”
There is also a noted sense of frustration in the community because reduced education funding impacts student achievement, Huckins said.
“Not only will students suffer, but the state of Arizona will have a high price to pay further down the road,” Huckins said. “That higher price is clearly illustrated by the 59 percent of Arizona students who are entering community colleges require remedial courses before they are able to move on to credited coursework.
Michelle Bolton, manager of Cox Communications government relations team, told attendees at the ABEC conference that she believes a larger discussion about the public K-12 school finance system is needed.
“It’s hard to say whether a tax increase is the right answer or the wrong answer, but the key is to keep dialogue open,” Bolton said. “We have a lot of lawmakers, business leaders, community leaders, and education experts talking about our school finance system and what we should do to help adequately fund our schools so that we can have student achievement. That needs to continue to happen.”
Former Arizona Secretary of State Ken Bennett said Arizona is “not bringing in enough revenue to meet the state’s needs, including education.”
There needs to be a tax restructuring, not a tax increase, Bennett said.
“We need to be, I think, spending a lot of time thinking about how to restructure the tax system of this state so that the revenue that comes into the general fund will flow with the economy, not skyrocket in the good years and then fall of a cliff in the bad years,” Bennett said. “That’s what has been happening over the last 10 to 15 years.”
With goods making up less than 19 percent of Arizona’s economy, Bennett suggested moving away from a sales tax on goods, which is the biggest revenue portion of the state general fund, to a lower rate consumption tax that would capture more of the services portion of the economy, which makes up over 80 percent.
“You could eliminate the income tax for individuals, you could eliminate the income tax for businesses,” Bennett said. “A 3.5 percent tax on every transaction in the economy would bring in about $10 billion in the state’s general fund. Today we’re at about $8.9 billion.”
Even excluding areas of the economy the state might not want to tax, like food, prescription drugs, medical or education, “a 5.5 percent or 6 percent consumption tax on about 60 percent of the economic activity that occurs in the state in any given year, you would have a revenue system that brings in about a billion dollars more than the state general fund receives right now,” Bennett said.
Education is the single most important public policy issue we have before us, said Arizona Gov. Doug Ducey.
“We invest and will continue to invest in K-12 education,” Ducey said. “The fact of the matter is we inherited a $1 billion budget shortfall and my first priority was to balance the state’s budget. We made tough decisions, and I realize that many of them were unpopular, but now the budget is balanced.”
In addition to reductions at the K-12 level, $99 million was cuts to Arizona post-secondary education this year, Huckins said.
“Maricopa and Pima Community College Districts, the two largest community college districts in the state, lost all funding, which is a major hit for organizations that train future employees for Arizona’s workforce,” Huckins said.
The impact of cuts to public education will have a ripple effect on Arizona for generations to come, because a strong public education system builds the economy, Huckins said.
“A sustainable economy needs a talented, workforce pipeline,” Huckins said. “Cutting education funding does not contribute to a more viable workforce, but in actuality, it results in workforce deficit vital Arizona’s growing industry sectors.”
Ducey said there is some good economic news and the state may be in a different situation at this time next year.
“We must put more resources into this system and we must align those resources with strategic goals,” Ducey said. “Our funding system is broken.”
Ducey announced his Classrooms First Initiative Council of education and business leaders that he and Jim Swanson from Kitchell Corporation will co-chair at the ABEC conference and said the group’s goal is to improve educational outcomes through state finance reform.
“Working together we will develop a funding formula that recognizes and rewards performance, efficiency and innovation,” Ducey said. “It’s time we started incentivizing student success versus seat time.”
“When we have a funding system that is singularly focused on student achievement, I will commit to you that we will get more resources into these schools,” Ducey said.
The business community is concerned that there are not enough students coming out of Arizona schools fully prepared to join the workforce, Huckins said.
“It is important for community leaders, concerned citizens, parents and teachers to let their legislators know that education cuts will be detrimental to student success, the economy and will cause businesses that are potentially looking to relocate to look elsewhere than in Arizona,” Huckins said.
There are many organizations working unrelentingly toward making sure that Arizona continues to move in the right direction, said Reg Ballantyne III, vice president of the Arizona State Board of Education.
“We’re not there yet, but certainly there are advancements and enhancements to be made,” Ballantyne said. “The passion of educational professionals at every level in making a difference is palpable, even in the face of barriers and obstacles still yet to be removed.”
Arizonans must “step up to the table, fight the fight, work together and truly value education,” said Grant Woods, former Arizona attorney general. “Stop talking about it, and put our money where our mouth is.”