Updated at 4:39 p.m. March 26, 2018: Gov. Doug Ducey signed a bill on Monday that was approved by the Arizona Legislature on Thursday to extend Prop. 301 until 2041, protecting a critical revenue stream that would have expired in 2021 that public schools rely on when creating their budgets.
In 2016, district and charter schools received about $364.1 million of the $643.8 million generated by Prop. 301, a six-tenths of a cent sales tax approved by voters in 2000. Since sales tax revenues are affected by the economy, the money that schools receive from Prop. 301 varies each year.
House Bill 2158, sponsored by Rep. Doug Coleman, R-Apache Junction (District 16), and Senate Bill 1390, sponsored by Sen. Kate Brophy McGee, R-Phoenix (District 28) which would legislatively extend Prop. 301 appeared to be dead earlier this month, but last week they both moved in the House and Senate, said Leigh Jensen, government relations associate for Arizona School Boards Association.
The Senate Education Committee unanimously approved SB 1390 on Thursday, March 22 and the bill was fast-tracked through the Arizona Legislature. SB 1390 has 56 sponsors including Democrats and Republicans. In the afternoon, the Senate approved the bill 26-4, the House passed the bill 53-6, and then the bill went to Gov. Ducey for his signature.
The Senate Education Committee amended the proposal to extend it to 2041 rather than making the six-tenths of a cent sales tax permanent, and increased the cash available for teacher pay and school operations by moving $64 million used to pay for school construction debt to the Classroom Site Fund after June 2021, according to The Associated Press.
“Expect More Arizona thanks legislators and the Governor for extending Prop 301. Removing the risk of a significant funding cliff, adding dollars to the classroom site fund, and protecting the other distributions that support the education continuum sends a powerful message,” said Christine M. Thompson, president and CEO of Expect More Arizona.
“This extension will make room for meaningful conversations about the additional investments needed to support education as the crucial element in Arizona’s future success and economic development,” Thompson said. “Expect More Arizona is eager to work together, across party lines, to find long-term funding solutions that support the success of every student, every step of the way – regardless of background, income or zip code.”
Grateful to my #AZ Senate colleagues for unanimously passing my #Prop301 continuation this morning. It’s critical to put more money into teacher pay and ensure our schools don’t face a fiscal cliff! pic.twitter.com/pJLBhQoI8r
— Kate Brophy McGee (@KateMcGeeAZ) March 22, 2018
How Prop. 301 funds are used
Prop. 301 requires that 20 percent of the sales tax revenues go to teachers’ base pay, 40 percent to teachers’ performance pay and 40 percent goes to a site fund that can be used for classroom needs, maintenance and operation.
Prop. 301 also requires the legislature to increase per student base level funding annually by the rate of inflation for 2 percent, whichever is less.
Nearing Prop. 301’s expiration
Rep. Heather Carter, R-Cave Creek (District 15) who started the conversation about renewing Prop. 301 in 2016, said she met with resistance from a variety of groups and people.
House Bill 2158 would provide what schools already receive and keep how they receive it the same, said Coleman. Brophy McGee said her bill, which is identical to Coleman’s, would give districts some stability.
What approval would take
Because these bills extend a sales tax, it will take a two-thirds vote in the Legislature to put these bills on Gov. Doug Ducey’s desk, according to an article in The Arizona Republic.
“A real challenge for final passage of this legislation exists since approval would require a super majority to finally pass – 20 votes in the Senate and 40 votes in the House,” said Chuck Essigs, director of governmental relations for Arizona Association of School Business Officials.
The extension of the sales tax would not be voter-protected if the legislature passes this bill; however, all of the other voter-approved provisions – including the annual inflation adjustment – would remain voter-protected, said Chris Thomas, general counsel and associate director for the Arizona School Boards Association.
“If the Legislature approves this legislation and the Governor was to sign the bill, no election would be needed to extend the provision of Prop 301 beyond the June 30, 2021 deadline,” Essigs said.