PHOENIX — A tool Arizona uses to fund schools must go back to voters for re-authorization before it expires in July 2025.
The problem?
The Arizona State Legislature and the governor's office can't agree over details of the ballot referral.
Passed nearly a decade ago, Prop 123 was used to settle a massive lawsuit over K-12 funding levels. It diverts more than $300 million annually from the State Land Trust for per-pupil funding.
Asked Wednesday if she was willing to call a special session if the legislature cannot agree on a Prop 123 extension for the November ballot, Governor Katie Hobbs told 12News there are two options.
“If we can’t get movement during the regular session then that’s an option. Another option is do it at a later date through a special election,” Hobbs said.
The business community wants this settled
The Arizona business community is also urging state leaders to come to an agreement.
“Our team has been in regular talks with legislators from both parties and will continue to encourage members to make this a priority,” said Courtney Coolidge, VP of Government Affairs for the Arizona Chamber of Commerce.
Bennett: House Republicans want percentage at 5.5%
Right now the governor and lawmakers disagree over the percentage to be taken from the trust. Governor Katie Hobbs is pushing for an amount higher than the current 6.9%. Some House Republicans want the percentage to be at 5.5%, said Republican Ken Bennett, chair of the Senate Education Committee.
Bennett said he believes a compromise would be to keep the percentage the same. He said the governor’s proposal of 8.9% risks digging into the principal of the trust fund.
“To me, the compromise is 6.9%. That’s where it’s been at in the past. We have a proven track record we can pay out that much money without damaging the principal trust fund,” Bennett said.
Education advocates say 8.9% is needed to ensure school districts are better funded as the state - though improving per-pupil funding over the last ten years - remains near the bottom nationally. Class size and counselor-to-student ratios are also ranked near the bottom compared to other states.
Arizona Chamber: 'We want … bipartisan support'
Another point of contention is how districts should spend Prop 123 funds. A group of Republicans wants to earmark the funds for teacher raises only. Educators say school districts need flexibility to spend the funds according to their needs.
“You’ve got one group saying it should all go to the teachers. Another group said, ‘No everybody gets it equally.’ I think the compromise of that should be 60/40 or something like that,” Bennett said.
A December op-ed from Chamber President Danny Seiden urged action from lawmakers, stating, “We want whatever gets referred to voters to come with bipartisan support.”
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