Prop 100: Don’t Get Fooled Again
By Tom Jenney

Special to Inside Tucson Business
Visit ITB at http://www.azbiz.com/

Submitted 28 April 2010

Printable pdf version of this article:
http://static.taxcutsforall.com/files/prop100dontgetfooledagain.pdf

The last time a Republican secretary of state became governor, she told Arizona’s business community that we needed to raise taxes to support education. The governor was Jane Hull, the year was 2000, and the issue was Proposition 301. Prop 301 raised state sales taxes by 12 percent.

Sound familiar? This time, the governor is Jan Brewer, and the issue is Prop 100, which will raise state sales taxes by 18 percent for three years if it is approved by voters on the May 18 ballot. One of the central arguments propagated by supporters of Prop 100 is the notion that much of the new money will be used to benefit K-12 education.

Members of Arizona’s business community need to look carefully at the results of the Prop 301 experience before they commit to yet another tax increase—and especially a tax increase that will hit workers, families and small businesses at a time when they are struggling in a deep recession.

The Prop 301 revenues were earmarked for the “Classroom Site Fund,” a fund that in retrospect appears to have been misnamed. According to the state superintendent’s 2009 annual report, total per-pupil resources in Arizona went from $7,228 in 2001 to $9,707 in 2008. That was a whopping 34 percent increase in per-pupil funding.

Source: http://www.ade.state.az.us/AnnualReport/AnnualReport2009/Vol1.pdf
(for totals, see pdf pages 10 & 12)

Chart: http://static.taxcutsforall.com/files/k12azperpupil04-02-2010.pdf

And yet, according a February report from the state’s auditor general, the share of money spent in the average classroom in Arizona has hovered closely around 58 percent during the entire Prop 301 period. The share was 57.7 percent in 2001 and 57.3 percent in 2008.

Source: http://azstarnet.com/news/local/education/precollegiate/article_16e4e592...

There is no point to throwing more money at Arizona’s K-12 system if the extra funds do not result in increased student performance. Sadly, that is exactly what the results have been for Prop 301. Despite the huge increase in per-pupil resources, we have seen no increase in student performance. Arizona’s test scores on the National Assessment of Educational Progress (the “nation’s report card”) have been flat during the first decade of the Prop 301 tax increase. For example, the average reading score for all Arizona fourth graders has hovered closely around 208 since Prop 301 was enacted.

http://static.taxcutsforall.com/files/azvsfl2009naep.pdf

I am grateful to report that there actually is some good news on student performance. Unfortunately, that news is almost entirely confined to Florida, where Governor Jeb Bush combined robust school choice reforms with meaningful accountability of the kind that is not available in the much-watered-down AIMS test.

Despite the fact that Arizona raised its per-pupil spending at a faster rate during this period than Florida did, Florida actually has something to show for its spending increase. It raised fourth grade reading scores for Hispanic students from 207 in 2002 to 223 in 2009, and raised fourth grade reading scores for African American students from 196 in 2002 to 211 in 2009.

The media’s preoccupation with Arizona’s relative national ranking for expenditures (we’re always somewhere near 49th in the country, it seems) is entirely misplaced. If other states waste more money on failing K-12 systems than we do, that certainly does not speak well of those states. In any case, the business community should be smarter than to fall for the argument that spending more money, in and of itself, is a good thing.

Prop 100 is also fraudulent. The actual ballot language of Prop 100 declares that “two-thirds of the revenues shall be appropriated for public primary and secondary education.” The new tax hike is expected to generate roughly $900 million in new revenues the first year. Using simple math, a voter might conclude that $600 million will go to K-12. But that voter would be wrong. According to the Legislature’s list of conditional enactments, only $430 million will go to K-12. The Legislature and Governor are planning to deposit $600 million into one pocket of the K-12 system, and pull $170 million out of another pocket—to be spent elsewhere.

Prop 100 Language: http://www.azleg.gov/legtext/49leg/6s/bills/scr1001s.pdf

Spending Plan (see pp. 6-7): http://static.taxcutsforall.com/files/azfy2011enactedbudgetproposal03191...

Finally, Arizona’s business community needs to learn what insiders have long known, which is that our K-12 system has massive waste. If a school district has flat-screen computer panels, but is threatening to lay off teachers, that is an allocation problem, not a resource problem.

Our experience with the Prop 301 tax increase should be instructive when we consider the Prop 100 tax increase. In the immortal words of The Who, “Don’t get fooled again.”

--Tom Jenney is the Arizona director of Americans for Prosperity (www.aztaxpayers.org).