In November 2012 voters in Arizona will address Proposition 204, entitled Taxation. It arises from an initiative measure to amend Arizona Revised Statutes. If passed, Proposition 204 would permanently increase the state sales tax rate by one cent per dollar beginning June 1, 2013, to a rate of 6.6 percent. The money collected from the tax increase would be used for educational programs, public transportation infrastructure projects and human services programs. Prop 204 would annually distribute the first one billion dollars of additional sales tax as follows:
(1) Five hundred million dollars into the "quality education and performance fund", to assist school districts and charter schools with assessment and accountability requirements, including improvement plans for failing schools, to provide teacher and principal evaluation systems based in part on student achievement, to improve pupil reading proficiency by the end of third grade and to implement a system of testing and awarding diplomas to high school students who demonstrate readiness for college level math and English;
(2) Ten million dollars into the "education learning and accountability fund" to maintain a system for compiling student data and school finance data to meet state and federal reporting requirements;
(3) Ninety million dollars into the "education accountability and improvement fund" to provide performance funding to school districts and charter schools based on performance measures relating to academic progress, parental satisfaction and student engagement, to provide teacher training and for technology necessary to implement statewide academic standards and assessments;
(4) One hundred million dollars into the "state infrastructure fund", to be used for a variety of transportation infrastructure projects, highway improvement projects and other transportation-related projects;
(5) Twenty-five million dollars into the "children's health insurance program fund", to be used for costs associated with the current publicly funded health care program for children under nineteen whose household income is at or below two hundred per cent of the federal poverty level;
(6) One hundred million dollars into the "family stability and self-sufficiency fund", to be distributed to state agencies and private nonprofit entities as a match for federal funds for programs that provide for the basic needs of children, families and vulnerable adults whose household income is below two hundred per cent of the federal poverty level;
(7) Fifty million dollars into the "university scholarship, operations and infrastructure fund", to be used to provide university scholarships to resident students based on financial need or academic achievement, and the remaining fund monies would be allocated to the three state universities for operating and infrastructure expenses based on performance in meeting goals set by the Board of Regents;
(8) Up to one hundred twenty-five million dollars to the state general fund to fund the required inflationary adjustment for the kindergarten-through-twelfth-grade school system. Sales tax revenue over one billion dollars would be distributed to in established percentages for specific education-related programs, except 11% that would go to the "state infrastructure fund".
The one cent tax is projected to generate $971 million in revenue in its first year. Of that amount, $753 million would be distributed to education, $97 million to transportation and $121 million to human service programs.
Advocates of Proposition 204 say that:
- This initiative prevents legislators from using the one-cent sales tax renewal as they wish. Every dollar must be spent as you designate, with 80 percent of the funding benefiting education across the spectrum: K-12, vocational education, community colleges, universities and GED programs. To protect your investment, the Legislature will be prohibited from cutting K-12 funding. Arizona must invest in education, not only to protect schoolchildren but to protect the state's economy. When companies decide to relocate or remain in Arizona, they base that decision on whether Arizona has a highly skilled, well-educated workforce.
- The quality of education affects our ability to keep and recruit excellent employees, as well as recruit new companies with good-paying jobs. We depend on our state's educators to graduate students with the skills necessary to succeed in our rapidly changing job market so that Arizona remains competitive nationally and internationally. The Quality Education and Jobs initiative provides the investment in education that Arizona needs to thrive economically. Arizona is one of 45 states that have adopted a new, more rigorous curriculum called the Common Core and a new test tied to the new standards that will replace AIMS. Teachers and principals will have one-third to one-half of their evaluations tied directly to how well their students perform. We must invest in education at this critical time to ensure that our teachers in the classroom have the resources they need to help our state's 1 million schoolchildren succeed. The initiative also guarantees state investment in Arizona's transportation infrastructure, which also is critical to Arizona's economic health. Arizona must have safe and efficient highways, roads and transit for Arizona to keep the job-creating businesses it has and recruit new ones to the state.
- The best feature of this initiative is that it directs how this tax will be spent. With the potential of an additional one billion dollars, it will provide a minimum funding level that cannot be reduced by the legislature. Funding will be available to support teachers in carrying out more rigorous education standards. An accountability structure will be implemented. It ensures children of lower-income families will be healthy and ready to learn. This initiative is a very ambitious effort to correct the funding cuts imposed by the Legislature upon the states' population.
- Prop 204 creates a stable, dedicated revenue source for education that will help create highly educated and skilled students. Arizona has been grappling with poor economic times. For K-12 education, this has meant nearly one-fifth of funding cut from public schools in the past four years - the second biggest cut in education funding among all the states. Rather than investing in Arizona's and our students' future, our legislature created mandates without the resources to ensure they are successful.
- All of this revenue is available simply by renewing an existing sales tax at the same rate, one cent per dollar, that was approved by the voters in 2010 to fund education and health programs. Without a yes vote on the Prop 204, the tax approved in 2010 will expire on May 31, 2013 and this revenue will be lost to our schools and communities.
Opponents of Proposition 204 say that:
- Arizona does not need more budgeting by the ballot box, nor do we need to further hamstring our legislature. Our governor and legislature are constitutionally required to balance the budget. Every permanent earmark makes that job harder. The temporary -- emphasis on "temporary" -- sales tax was approved in 2010 as an emergency measure, but the time for the sales tax increase has passed and it is time for the legislature to continue to do the things necessary to get our state's fiscal house in order.
- Two years ago - during some of our state's toughest times - Arizona voters overwhelmingly passed Proposition 100, a three-year tax increase needed to stave off drastic cuts to education. Prop 204 only pretends to fund the reforms we desperately need. Proponents of this measure want you to commit to permanently pay 18% more in state sales taxes without requiring any reforms or guaranteeing any results. Proposition 204 is overly complicated and confusing. Even experts cannot agree what happens to the tax dollars collected. Let's spend any new revenues on meaningful reforms that will improve student achievement and graduation rates and reward our teachers and principals with pay that recognizes their outstanding performance.
- Arizona citizens were told that the sales tax increase would be temporary, not permanent. Combined sales tax rates in many Arizona cities are already higher than in New York City and Los Angeles. The current combined sales tax rate in Phoenix is 9.3%; Glendale's is 10.2%, and Buckeye is at 10.3%. This initiative will effectively strip the right of Arizona citizens to provide input on future budget decisions. Right now the state legislature and Governor are required to balance the state budget. This initiative puts huge portions of the state budget on auto-pilot driven by formulas.
- Prop 204 is a permanent one cent per dollar sales tax increase without a comprehensive approach to improving education. It lacks the ability to change the use of the funds if Arizona's priority changes. It allows funds to be distributed to schools regardless of performance without specifying new programs or alternatives for failing schools to improve. It allows a few groups to determine how funding for education, healthcare and transportation are determined while tying the hands of those who were elected to make such decisions. Let the temporary sales tax increase expire as the voters desired when they approved it in 2010. Now is not the time to raise taxes as mandated by this ill advised plan.
- A high-performing education system requires the financial resources necessary to produce a highly qualified workforce. Proposition 100 in 2010, which established a temporary one cent per dollar sales tax, helped prevent deep cuts to the K-12 system during the economic downturn. Despite what proponents of Proposition 204 might say, it is not an extension of the current sales tax that is set to expire on May 31, 2013. This is an entirely new permanent tax with new implications for policymakers and our state. This new permanent tax does not increase accountability nor does it demand increased achievement from our education system.
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Note: pro and con arguments for the proposition were quoted or paraphrased from the official arguments. More arguments may have been submitted; I am presenting only a few that I believe will most help readers decide how to vote. You can find the entire wording of the ballot proposition, and all the pro and con arguments, in the official election pamphlet.