Efforts To Renew Expiring Prop 123 Generate Partisan Wrangling

There is nothing more permanent than temporary government programs, and Proposition 123 is no exception.

Prop 123 amended the Arizona Constitution’s Permanent State School Fund by increasing the percentage of distribution from 2.5% to 6.9%. All of this went to the general school fund with little or no restriction on how these funds were to be used.

When approved by the voters in 2016, Prop 123 was sold as a temporary measure to mitigate the alleged failure of the state legislature to fully fund education. To that end, it included the following language in subsection G, paragraph 3:

3. Beginning with fiscal year 2025-2026, shall be two and one-half percent of the average monthly market values of the fund for the immediately preceding five calendar years.

In other words, beginning in July of 2025, the 4.4 additional percentage distribution, provided by Prop 123, would terminate unless action is taken to extend it.

Since changes to the AZ constitution must be done by a vote of the people, two bills were introduced which, if passed, would refer the issue to the voters. They were legislative bills HCR2047, introduced by Rep. Gress and a senate version containing the exact same language, SCR1015, introduced by Sen. Mesnard. They were aimed at extending the provisions of Prop 123 by amending it with language that reads, in part:

1. Notwithstanding subsection G, paragraph 3 of this section, if the voters approve the statutory measure referred by the fifty-seventh legislature, first regular session, that establishes a statewide program to increase the base salary of all eligible teachers above the base salary of fiscal year 2025-2026, the annual distribution from the permanent funds that correspond to land granted to this state by the Enabling Act for the use and benefit of common schools shall be as follows:
2. For fiscal years 2025-2026 through 2034-2035, six and nine-tenths percent of the average monthly market values of the fund for the immediately preceding five calendar years. Any increase in expendable earnings under section 37-521, subsection B, paragraph 4, Arizona Revised Statutes, that results from a distribution of more than two and one-half percent of the average monthly market values of the fund for the immediately preceding five calendar years pursuant to this paragraph shall be appropriated for the statewide program to increase the base salary of all eligible teachers.
3. Beginning in fiscal year 2035-2036, two and one-half percent of the average monthly market values of the fund for the immediately preceding five calendar years.

Two key points are worth mentioning.

First, these bills extend the additional 4.4% distribution another 10 years, which, if adopted, means that we will have this discussion again in 2035.

Second, unlike the original Prop 123, this amendment requires that the additional funding be used to “increase the base salary of all eligible teachers”. It does not define what constitutes eligible teachers.

Shortly after these bills were introduced, identical strike everything amendments were adopted and added to both bills, and contain the following provisions.

1. ENSURES THAT THE PROGRAM DISTINGUISHES BETWEEN PERFORMING AND UNDERPERFORMING TEACHERS.
2. ESTABLISHES REPORTING AND AUDITING REQUIREMENTS FOR THE PROGRAM.
3. REQUIRES SCHOOLS TO UPDATE TEACHER SALARY SCHEDULES.
4. REQUIRES EACH SCHOOL THAT RECEIVES MONIES PURSUANT TO ELIGIBLE TEACHERS WHO ARE EMPLOYED BY THE SCHOOL.
5. ALLOCATES MONIES FROM THE APPROPRIATIONS PURSUANT TO THIS SUBSECTION TO A CLASSROOM TEACHER ONLY IF THE TEACHER

MEETS ALL OF THE FOLLOWING REQUIREMENTS:

(a) IS A FULL-TIME TEACHER.

(b) SPENDS A MAJORITY OF THE TEACHER’S TIME ON NONADMINISTRATIVE ACTIVITIES THAT PROVIDE CLASSROOM INSTRUCTION TO STUDENTS.

(c) MEETS OR EXCEED PERFORMANCE REQUIREMENTS.

6. REQUIRES MONIES APPROPRIATED PURSUANT TO THIS

SUBSECTION TO SUPPLEMENT, AND NOT SUPPLANT, TEACHER

COMPENSATION MONIES FROM ANY OTHER SOURCES.

This strike everything amendment adds several provisions that were not in the original bill. Most notably, it establishes what constitutes eligible teachers by setting forth three requirements.

In terms of what is available to the general public, via information posted in the AZ legislature’s website, this is where we are at.

There have been rumors that some Republican legislators want to include language that deals with Empowerment Scholarship Accounts. However, we have no idea as to what that language might be because there has not been any official disclosure of any proposed language beyond the original bill and the subsequent strike everything amendment.

We do know that legislators are working feverishly to come up with a plan to extend Prop 123 in a manner that will appeal to the general public, so that the ballot measure that emerges will have a high probability of being approved.

From the perspective of a concerned citizen, there are five options that political leaders may choose:

• Simply extending the current provisions of Prop 123 for another ten years. This is the easiest and least controversial path to follow, but it would not solve the problem of some school districts mismanaging or misusing the funds provided. This is the option favored by most left-of-center groups.
• Sticking to the original bills, which stipulate that distributions above 2.5% must be used to increase the base salaries of all teachers.
• Preserving the adopted strike everything amendment that introduces several changes, including language to limit what teachers are entitled to the guaranteed pay increases.
• Making the changes permanent, not just for 10 years.
• Adding language in support of school choice.

Other options are likely to emerge as the process moves forward.

Individuals who wish to offer their recommendations to legislators via email or telephone may do so easily by using the assistance provided by several organizations. One of them is https://azpeopleslobbyist.com/

Hobbs may be contacted by using the following contact information:

Phone  Phoenix: 602.542.4331 Tucson: 520.628.6580  Email here.