Open Letter to Senators Flake and McCain

Dear Senators Flake and McCain,

First of all, let me thank you for your service to our state and our country. I realize your job is not an easy one, but hope you understand this is also not an easy time to be an engaged patriot. Millions of us are incredibly anxious about the future of our country and our world. At this time, more than almost anytime in my adult life, we need real leadership.

As a school board member, I am really worried about President Trump’s and his SecED nominee’s intentions with K–12 education. He thinks our nation’s current education system is “flush with cash” and that our children are “deprived of all knowledge.” For Arizona at least, both of these statements are ridiculous. Our per pupil funding is 48th in the nation and our teachers the 47th lowest paid. Even so, our student’s National Assessment of Educational Progress (NAEP) scores continue to rise and we led the nation in growth on the science test from 2009 to 2015.

If however, Betsy DeVos is confirmed, she will no doubt try to do for the nation what she did for Michigan. There she pushed for vouchers (even though she could never “sell” them in her home state) and for-profit publicly funded charters with as little accountability and transparency as possible. The results speak for themselves, with Michigan’s 4th grader scores on the NAEP from 2003 to 2015 declining from 28th to 41st in reading and from 27th to 42nd in math. This is not a formula for success.

I understand the pressure you are under to toe the party line, but the people of Arizona and our nation need you to look deep inside yourselves and determine what is really best for our country? Truly public education, that which is governed by locally elected boards, is the bedrock of our democracy and built the greatest middle class in the history of the world. It also taught us yes, we are all different, but there is strength in those differences. It can continue to support the American Dream, or, we can just give up on that dream and sell out to the highest bidder. We are at a tipping point and you have the ability to pull us back from the edge or propel us over the cliff. Please cast your vote in favor of our democracy and say NO to DeVos and her privatization agenda. We (the people) are counting on you!

“Someone to Shine Our Shoes”

In a recent article titled “Chartered Cruise” on knpr.org, the author Hugh Jackson wrote: “Today’s charter industry, much like Nevada’s voucher plan, reflects a chronic civic defeatism. Echoing the perverse social Darwinism of more than a century ago, faith in free-market education is surrender to pessimism. Society really isn’t incapable of providing a fair educational opportunity to every citizen. Some people are doomed to fail, that’s just the way it is, so best to segregate those with promise, the achievers, in separate schools. As for everyone else, well, too bad for them.” Of course, this attitude isn’t confined to only Nevada; I have a real life example of it right here in Arizona. Three or so years ago, an acquaintance of mine asked an Arizona Senator whether or not he supported public education. He replied, “of course I do, we need someone to shine our shoes.”

It’s bad enough the Senator thought this, let alone that he said it out loud to a public education advocate. That says as much about the voter contempt some of our lawmakers hold (especially when the voter is from a different party) as it does what they think of public education. As the primary water carrier for the American Legislative Exchange Council’s (ALEC), the Arizona Legislature has led the nation in efforts to offer school choice options. Proponents tout school choice as the way to help disadvantaged children, but truth is, they’ve already written these children off. Instead, school choice is really about resegregation (the highest we’ve seen since the mid 1960s) and profiteering.

The school choice and education privatization movement gives me great pause because:

  1. The vast majority of our students (85%) are attending significantly underfunded district schools;
  2. Taxpayer dollars are increasingly being siphoned off to profiteers with very little (if any) accountability and transparency;
  3. The claim of school choice proponents that school choice provides much better results, either isn’t backed up by facts, or is an oranges and pineapple comparison;
  4. Voucher and charter schools actually provide parents less choice than district schools.

Allow me to explain. By now, most Arizonans probably know our state is 48th in per pupil funding. Even if the $3.5 billion infusion from Prop 123 is approved by voters this month, it won’t move us from 48th place in overall per pupil funding. To move up just one notch (above Oklahoma), we’d have to give out districts twice that much. That’s how far behind Arizona is.

As for the lack of accountability and transparency in Arizona’s school choice programs, for-profit companies dominate the charter school movement.  These companies do not have school boards, let alone locally elected boards and are not required to disclose the details of their business operations. As for private schools that take Empowerment Scholarship Account (voucher) or Student Tuition Organization tax credit dollars, there is no way for taxpayers to determine funding efficacy. Private school students are not required to take state assessments nor provide any academic results. Neither are private schools required to disclose any information regarding their business operations.

Then, there’s the apple and oranges comparison. Irrespective of the law requiring charter schools to accept all students, it is a well documented fact that most manage to steer clear of special needs and English language learning students and that they manage to attrit (at incredibly high rates) students of color or those on the lower end of the socio-economic scale. Of course, when these students return to the district schools, it is often after the 100th day of the school year, when the average daily attendance has been calculated and the charter school has cemented the funding for the year for that student. The district school is forced to absorb that same student for the rest of the year with no compensation.

Finally, district schools are run by locally elected governing boards that are accountable to the community. School district residents have the right to be present at board meetings and have their voice heard. They also have a right to know how their tax money is spent. Charters and private schools are run by executive boards not accountable and often not responsive to parents. If you aren’t happy with the way they are being run, your only recourse is to withdraw your child.

The myth perpetuated by those bent on destroying pubic district education is that district schools are failing and that privatization in various forms is the answer. The reality says that school choice will never be the answer for the vast majority. The evidence also shows despite charters and private schools being much more selective of their students, most charters and almost all cyber charters do worse than their district schools. We don’t really know how private schools do since they aren’t required to provide any information about results.

The movement to privatize public education is straight from the GOP playbook on reducing government. As President Reagan said in his first inaugural address: “Government is not the solution to our problem; government is the problem.” That might have been a good sound bite for the right, but I believe concentrated, unchecked power is the problem. Our system works best when we have a balance of power that ensures all sides are heard and produces compromises to come up with the best possible solution. It also works best when government provides for the public good and checks and balances are put in place to ensure efficiencies and effectiveness of both the public and private sectors where taxpayer dollars are involved. Those checks and balances are lacking in school choice options and taxpayers are paying the price. Examples abound of virtual (on-line) school scams, greedy charter school operators, and even illegal purchases with voucher dollars. No, district schools are not entirely immune from fraud, but at least they have locally elected school boards responsible to the taxpayer for oversight and the state conducts annual audits. Neither of these happens when taxpayer dollars fund school choice options.

The original intent of charter schools was to provide teachers greater flexibility to experiment with new ways to educate students. Charters were not meant to compete with or replace district schools, but rather complement them. Now, charters and vouchers have become a way for state legislatures to deflect their responsibility to provide a quality public education for all. When funding follows the child, it becomes the parent’s responsibility to ensure a quality education. School choice also allows our lawmakers to obfuscate the real problem, poverty and all the challenges it brings to our district schools.  Of course, the focus on school choice creates demand which causes funding loss in districts, making it harder for them to excel and reinforces the message that they are failing. The truth is, that despite significant funding shortfalls, severe teacher shortages and crumbling infrastructure, our district schools continue to do well. It makes one wonder what miracles could be achieved if they received the funding and support currently being siphoned off to charters and private schools.

The one thing I know for sure is that until we elect new pro-public education candidates, nothing is going to change. We will continue to see efforts to take the brakes off vouchers, create laws more favorable to charter schools, and attempts to de-professionalize the teaching profession. We have the power to create change; the only question that remains is do we have the will? Prop 123 has raised the level of attention to the challenges of our district schools. Many have been vocal on both sides of the issue. Let’s come together on May 19th at 4 pm for a Pro-Public Education Rally to tell our Legislature that enough is enough, we are done with them short-changing our kids and our state’s future! #ItStartsNow #YouPlusOne #RememberInNovember

The color of accountability

I wasn’t surprised by The Republic’s recent findings that during the 2015-16 school year, the vast majority of funding ($20.6 million) for vouchers was taken from public schools rated A or B, but only $6.3 million was taken from schools rated C or D. I’d previously seen a statistic that in 2012, about 92 percent of students taking advantage of the voucher (Empowerment Scholarship Account) program would have attended private schools anyway regardless of voucher availability. Let’s face it; this was never about helping the poor, disadvantaged minority child. The reality is that vouchers were never for poorer Arizonans who can’t cover the average private-school tuition costs of $10,421 when a voucher provides only $5,200.

And yet, the AZ Legislature is pushing two bills to fully open the floodgates on voucher availability, making every student in Arizona eligible for vouchers for homeschooling, tutoring, private school, or to save for college. This, despite the fact that there is little accountability in the program. Yes, recipients must provide quarterly reports of their spending, but DOE staffing for oversight is reportedly insufficient and the schooling options that vouchers pay for have no responsibility for reporting any kind of results. The taxpayer then, has no way to determine return on investment.

Here’s where I start to get confused. The GOP nay, Teapublican-led Arizona Legislature, loves to tout the need for accountability of taxpayer dollars. They are great however, at picking and choosing their targets for applying this accountability. [Please read on, this post isn’t really about vouchers.]

In 2015 for example, Representative Mark Finchem, R-LD11, basically accused both the Phoenix Union High School (PUHSD) and Tucson Unified (TUSD) school districts of using desegregation (deseg) funding for purposes other than what they were intended for. TUSD Superintendent H.T. Sanchez said he was not aware of any misuse, citing the fact that there is a strict review process for every deseg dollar spent. In fact, oversight of this funding is provided by the plaintiffs in a deseg suit against the district, the DOJ, a federal judge and the special master, a deseg expert overseeing the district’s efforts all get to weight in on how deseg funds can be used. Finchem though was undeterred and demanded forensic audits that the schools would have to pay for because “these are taxpayer dollars and we want to make sure those dollars are being spent wisely, that they’re not being misappropriated. And I think that’s an obligation this body has to see to it that those dollars are spent that way.”

Fortunately, SB 1120 failed. Senator Steve Farley, D-LD9, who had a child in TUSD, said, “Finchem represents no part of the Tucson Unified School District.” Finchem never took the time to discuss the issue first with Sanchez, meet with district officials or review audits already done according to Farley.

So, why don’t AZ Legislators care about accountability when it comes to vouchers, but are all over it when it comes to desegregation funds? Could it just have something to do with the socio-economic status and color of most voucher (private school) students versus those who are beneficiaries of deseg funds? Just sayin’…

I must admit I hadn’t really taken the time to learn the details about deseg funding (my district doesn’t get any) until a recent email exchange with Representative Vince Leach, R-LD11. In his email, he intimated that “districts continue to violate civil rights after billions of dollars have been spent to fix the problem” and asked, “Where is the accountability in that?” Again, that whole accountability thing. Yet, when I asked him to please vote no on the voucher expansion, citing in part the lack of accountability, he said “I think you know I am going to vote for them.”

So yes, I took the time to learn more about desegregation funding. The issue dates back to at least 1974 when two families filed separate lawsuits against TUSD and the court found TUSD “had acted with segregative intent” and failed to fix the problem. In 1979, the U.S. Department of Education’s Office for Civil Rights (OCR) launched an investigation against PUHSD and a lawsuit was filed in 1982 for allegedly engaging in segregation practices. Problems were also found in the Tempe Elementary School District to include deliberately segregating minority and non-English speaking students, assigning minority teachers to the district’s poorest schools and placing a disproportionate number of English language learners in special education classrooms. Schools in wealthier parts of the District also had full-day kindergarten, nurses and librarians, but the others did not.

In 1985, Arizona enacted legislation to allow districts under federal court orders or OCR agreements to bring racial and ethnic balance to their schools and provide equal access to high quality education, to levy property taxes above their revenue control limit. As a result, those districts were able to levy a limited amount of higher local property taxes without voter approval. Although there were some problems along the way, in 2005, PUHSD gained “unitary status” followed by TUSD in 2009. This status meant that these districts had formally fulfilled their desegregation court order. Plaintiffs in the TUSD suit disagreed the problem was fixed, filed an appeal of the District’s unitary status designation and in 2011; the Appeals Court reversed the decision and appointed a highly paid special master (in Massachusetts) to help TUSD develop a new “road map.” This road map outlines required activities including student assignment, transportation, faculty and staff assignment, quality of education, discipline, family engagement, access to facilities and technology and transparency and accountability.

There are now 19 school districts with almost 250,000 students (about 23% of the total) around Arizona that receive $211 million for racial and ethnic discrimination remediation (unchanged since 2009.) Since 1986, the total comes to $4.3 billion, with 97 percent going to Phoenix and Tucson Schools. Only PUHSD and TUSD actually receive “desegregation funding”, the other 16 districts have administrative agreements with OCR. Two bills in the AZ Legislature, seek to reduce and eventually eliminate all this funding (within 5 years for those with OCR agreements and 10 years for those in unitary status.) SB 1125 (a follow-on to last session’s unsuccessful 1371), sponsored by AZ Senator Debbie Lesko, R-LD21, passed by the Senate Finance committee on 2/11/16 and claims state property tax rate caps require the general fund to make up some $23 million in 2015 in desegregation funding garnered at the local level. HB 2401 sponsored by Representatives Vince Leach and Mark Finchem is a companion bill which has been retained on the calendar as of 2/23/16.

Of her bill, Lesko said “That’s money from all over the state that shouldn’t just go to a couple districts.” She thinks that rather then relying on deseg funding, districts should ask voters to approve budget overrides. According to the Senate Fact Sheet for SB1125 however, although the state funded this “cap gap” through FY 2015, the Legislature has now capped the state’s cost of the 1 percent cap program to $1 million per county, i.e., the state passed on a portion of the cost for the gap to the counties (who must then pass these costs on to the taxpayer.) Irrespective of the caps however, affected districts contend they would be violating a federal agreement and a lawsuit will ensue if the funding is discontinued. Additionally, according to a recent analysis by The Republic, districts receiving desegregation funding did not spend more per pupil than all others in 2014. This is because there are many different funding sources for schools including varying amounts of federal dollars, bonds and overrides.

For PUHSD, the largest in the state with over 27,000 students, the loss of deseg funding would translate to about $53 million and would require closing four high schools with a loss of 702 teaching and staff jobs (estimates put the state-wide loss of jobs at about 2,500.) The superintendent, Dr. Chad Gestson, says, “The proposed elimination of desegregation funding is simply a huge tax cut on the backs of our poorest students.” He goes on to say that the ramifications go beyond public education and will affect property values, crime rates, reduced tax base, more burden on the city, county and state and a lower quality of life. Superintendent Robbie Koerperich of Holbrook Unified School District says “we all deserve it…we [shouldn’t] bring Holbrook [down] to the same level as similar school districts, but we should fund the other districts to bring them up.”

Proponents of the funding however say the results speak for themselves with the graduation rate at PUHSD at 80 percent up from 55 percent 15 years ago. Same thing with dropout rates that went from 15 percent over 20 years ago to 3.4 percent today. The Districts grads are also earning more scholarships for college than only six years ago, $50 million now, versus $13 million then.

The $211 million currently spent in deseg funding works out to an average of $844 per student. The question we should be asking isn’t “is it unfair for the 19 districts under deseg orders or with OCR agreements to receive this funding”, but what is the appropriate level of funding for all our students. Arizona k-12 education saw the highest cuts in per pupil funding in the Nation from 2008 to 2014 and to move up to even 45th place, we would need to spend $1 billion more, or almost $950 per pupil. Of course, other than the badly needed Prop 123 monies, our Legislature isn’t talking about education plus-ups, only cuts. (Sorry, but the recent restoration of all but $2 million of JTED funding doesn’t count, that was just about rectifying the bad decision made in last year’s budget.)

To the Arizona Legislature I say, the voters are waking up to your pretension that you give a damn about All Arizona’s children. To the voters, I say NOTHING speaks louder than your vote.

 

 

 

 

The Real Super Bowl

Capitol Media Services reported this morning that a “New deal could restore $28M, keep JTEDs alive.” Even though Governor Ducey has said he won’t support any bill that doesn’t keep the budget balanced, a Legislative veto-proof majority organized by Senator Don Shooter might save the day. That is of course, unless Senate President Andy Biggs refuses to have the bill considered. Biggs has said that although JTED started out as a good idea, it “has become a way for schools to get extra tax dollars for programs that really do not qualify for as CTE.” Shooter’s bill however, includes a requirement for audits and will include a new grading system, and Bigg’s has indicated these changes will help.

I predict the bill will pass given wide support by both the education and business communities and the fact that for the most part, the Legislature knows they made a dumb mistake in cutting the program in the first place. Or, I could give them credit for being really smart and cutting the program last year without the cuts taking affect until next year so they could be big heroes in restoring it this year if the voters put up a fuss. Nah…let’s stick with the first scenario. The bigger issue to me though, is the duplicity with which our state leaders are dealing with education. After all, they have no problem with exponentially expanding the amount of taxpayer dollars that go to private schools (92% of which are religious), but absolutely can’t stomach districts schools trying to improve their programs and ensure sustainability.

I’ve written before how CTE is a win-win-win, so I won’t belabor that point again. If the Legislature wants to place more rules on uses for JTED funds, that’s one thing. But it is entirely hypocritical for them to have cut the funds in the first place when the districts are just following the established rules. That reminds me of how districts followed the rules to create their own charter schools and then the legislature changed the law to prevent them from doing so.

It’s like this. Imagine the Super Bowl this Sunday isn’t between the Panthers and Broncos but between the Districts (underfunded district schools) and the Privates (well supported private schools.) Both sides have been training as hard as they can with the resources available to them. Unfortunately, the Privates have several advantages not afforded the Districts. First, the Privates were able to have all their first picks in the draft before the Districts could weigh in. Second, the Privates aren’t required to divulge any information about their team or their strategy whereas the Districts must divulge all, to include their playbook. Third, the Privates have unlimited potential for funding which allows them to hire and hold on to good coaches and trainers while the Districts struggle to recruit and retain sufficient numbers of each. Fourth, the Privates are flown to the game in first class style aboard their private jet. The Districts however, can’t afford a jet and they make the day long trip via bus to the game location. Fifth, the night before the game, the Privates are treated to a steak dinner at Ruth’s Chris Steak house while the Districts have a meal at McDonalds. Finally, the morning of the game, the Privates prepare in a luxurious locker room with all the amenities, while the Districts crowd into one of the stadium restrooms. Finally, to cinch the deal, the Privates have lobbied for government subsidies designed to lure players from the Districts. Of course, the costs for the Districts to maintain their team infrastructure remains fairly constant despite the attrition of players, so the funding they have left makes it even tougher for them to compete.

Who do you think would win the game? Not hard to figure it out is it? And yet, the Districts do more than their fair share of winning. As I have said before, I am not anti-choice. I just believe that the choice should be made with all the cards on the table. Corporate reformers have managed to sell the narrative that public schools aren’t working and the only way to save American education is to turn it over to the private sector. Truth is though, it is easy for the privatized schools to claim they work when they make the choice about who they admit, what rules they follow and what results, if any, they divulge. As many have said, it seems like school choice is more about choice for the schools than choice for the students or their parents.

I say let parents make the choice, but let’s demand both teams play by the same rules, particularly when it comes to return on taxpayer investment. More importantly, let’s all of us ensure that our overall system of education is producing the results needed for our students, our state and our Nation. To achieve the right result, we must focus on the right goal, that which made our country great. A free public education for all provided the fuel that allowed our economy to thrive and inspired the American Dream. It is too bad that keeping that dream alive isn’t the real Super Bowl that captures our attention.  The path we are on now will only serve to exacerbate income inequality and the death of that dream. It is about choice…a choice that is ours to make. It is our duty to make it wisely.

The needs of the many…

Spoiler Alert: I am really glad I didn’t drive to Phoenix today for the House Ways and Means Committee meeting during which they considered HB 2842, Empowerment Scholarship Accounts (ESAs); Expansion; Phase-In. I’m glad I stayed home because I’m sure my presence would have made no difference. Instead, I watched live streaming of the meeting and gleaned from the testimony that ESAs are lacking in accountability and transparency and serve the few at the expense of the majority.

The first “against” speaker I viewed was Ms. Stacey Morley from the Arizona Education Association. She talked about how when the full cap is reached, 5,500 students could have accepted ESAs at a cost of $13M to the state. Tory Anderson, from the Secular Coalition of Arizona expressed her organization’s opposition to any use of taxpayer dollars to fund religious schools. An AZ Department of Education representative said DOE is neutral on the bill, but wants to ensure they get their full 5% portion of the ESA funds for ensuring accountability. These funds are prescribed by law, but haven’t always been fully included in the budget. He talked about the importance of adequate oversight and referred to the 700 to 1 ratio currently in place for program liaisons that work with families to provide that oversight. As high as that number is, he wanted to ensure further budget cuts don’t make the challenge even tougher.

Mike Barnes, from the Arizona Superintendent’s Association talked about how ESAs make it very difficult for districts to determine their potential enrollment and therefore the impact on their budget. He said he doesn’t see how under this structure, the state doesn’t end paying for students that were going to attend private school anyway. He mentioned that the funds given in an ESA equal about $5,200 which is $600 more than is given to a district, but $600 less than what a charter costs. Representative Bruce Wheeler asked him if we knew how many of those students who take ESA have parents that make in excess of $100K. He said he did not.

The next speaker was Julie Horwin, a grandparent of two children who attend private schools. I assumed she was going to advocate for ESAs but that was not the case. She opened by saying that ESAs mean we are paying with two separate school systems with public funds. She then relayed a story of a private school principal who is paid $40K per year and found out that his board members each get paid $150K per year with public monies. She finished by saying that this bill will not help the greater majority of our students.

Janice Palmer from the Arizona School Boards Association (ASBA) said school choice is robust and noted that ASBA was the first school boards association to participate in National School Choice Week. She said the bill is disconcerting because in a competitive environment, it is important to be fair. Parents she said, definitely need to have the largest voice in their children’s education but when public dollars are involved, taxpayers also need to be part of the equation. Finally, she noted that this is not a zero sum game. If we choose to press ahead with the expansion of ESAs, but refuse to increase taxes, other programs will suffer to cover the additional expenses to the state budget.

The “for” speakers were three parents or grandparents of special needs children and Michael Hunter from the Goldwater Institute. Those who spoke regarding the value of ESAs for their special needs students were eloquent and convincing. There could be no doubt that the ESA program has provided them options they might not have otherwise had. But, the option for special needs students already exists in the law the expansion of HB 2842 is well beyond just them, but ultimately for all students in Arizona. Michael Hunter of the Goldwater Institute pointed out that changes like this are always met with resistance. First, there was open enrollment and then charter schools, both which were touted by opponents as being detrimental to district schools. He said that instead of looking at the impact on district schools, we should look at each family’s situation. Representative Reginald Bolding went back and forth with him a couple of times trying to pin him down (with little avail) about the difference in accountability and transparency, especially with regard to academic standards, but in the end Bolding was left to make his points on his own.

When the committee members voted, only Representative Bruce Wheeler and Reginald Bolding explained their votes. Wheeler called it subsidization of the rich and voted no and Bolling said he just wanted to ensure we have good schools for all our students and he was worried that individuals who might benefit from the program wouldn’t know about it. In the end, the vote was not surprisingly, along party lines and the measure passed (5-3-1.) The vote was predictable, but still depressing. I am convinced it will do nothing to improve education in Arizona and will do very little to help those who most need it. The Senate Education Committee meets this Thursday, February 4th at 9:00 am in Senate Hearing Room 1 and will be considering SB 1279, also about ESA expansion. If you are registered in the Request to Speak system, please make a request to speak on this bill and if not, please email or call your legislators to let them know you do not support it. Anyway you look at it, ESAs are vouchers and, they are siphoning valuable taxpayer dollars to private (to include religious) schools. Register your concerns and let your voice be heard. In this case, the needs of the many, must take precedence over the needs of the few.

 

 

 

 

 

 

Accountability in Arizona…not so much

Two headlines in the AZ Star caught my attention this morning: “Plan adds state cash for private education” and “Veto-proof majority backs repeal of JTED cuts.” The first one is about Representative Justin Olson’s bill to remove any limits on Empowerment Scholarship Accounts (ESAs.)  The second is about the Legislature’s plan to reinstate the $30 million in JTED cuts they made last year. Evidently the Legislature is now saying “my bad” about the 7.5% cut (about $400 per student) to charters and districts with students enrolled in JTED. According to Diane McCarthy at West-MEC, legislators weren’t really aware of what they were doing. “After the fact, some legislators said they didn’t understand what the impact of that (cut) was,” McCarthy said. “There’s a lot of talk about how do we fix it.”

I’m really glad the Legislature has come to its senses and intends to restore the funding, since 96% of Arizona students enrolled in CTE graduate from high school, 21% above those who don’t. Most CTE graduates also go on to post-secondary education and jobs and they score higher on standardized tests. CTE really is a win-win-win as the recent letter to the AZ Legislature signed by 32 business and education entities made clear. What really caught my eye about the JTED article was a quote from Senator Don Shooter who introduced the legislation to repeal the cuts. In response to Senate President Andy Bigg’s accusation that the program has insufficient oversight, Shooter said one key is “transparency.” Thanks for the segue Don.

Don Shooter is correct that transparency leads to more accountability, but evidently he and his fellow GOP legislators don’t understand that concept when it comes to ESAs (basically vouchers by another name.) As of mid-April 2014, approximately $17 million had been handed out through ESAs. That is a lot of money to be handed out without any way to ascertain return on investment. Unlike district school students, ESA recipients are exempted from all state assessments so there is no way to know whether the money was well spent.  Although there is a quarterly spending report required from ESA recipients, parents must only provide proof of spending 25% of the funding they receive each year. The money they don’t spend can be saved from year to year and can even be used for college. If the money isn’t spent, does it mean the parent was efficient with their child’s education or does it mean they skimped? Also, the vast majority of ESA funding goes to private schools (92% in 2012) and at least in Arizona, 70% of private schools are religious. I know this has been deemed constitutional because the money is given to parents who then give it to the schools, but sorry if it looks like a rose and smells like a rose…

The ESA program has been expanded little by little, (students: with disabilities, wards of the court or those that were, students of active duty military members or those killed while serving on active duty, those who had attended a D or F school the prior year, siblings of students currently in the program, and students who reside within the boundaries of an Indian reservation) but it has always been the intention of the GOP-led Legislature to open up the program to all. So far, pro-public legislators and those who believe in good stewardship of government dollars have been able to keep the wolves at bay. Make no mistake however; this legislation is much more about privatizing public education than it is about opportunities for disadvantaged children. Proponents say we need to transition from financing schools to funding students. Problem is, when students accept an ESA and leave the district school, they take all the funding with them, but none of the costs of running the school. A certain amount of overhead costs are fairly independent of student count and schools are incapable of rapidly adjusting their operating expenses with each student lost.

School choice is alive and well in Arizona and still a full 85% of Arizona’s students choose district schools.   The Legislature can pretend they care about these kids, but the truth is that they have a stranglehold on the necks of our district schools and as they continue to restrict the flow of resources to these schools, our kids are the losers. The more they encourage parents to look for greener grass outside our district schools, the more likely it is that resources will be pulled away from these schools making it harder for them to continue to educate the majority of students who remain.

If the Legislature really cares about Arizona students, why not just support our district schools why not just support what we know works: great teachers, small class sizes, infrastructure that supports learning and curriculum that is rich and challenging. We also know that schools can’t do it on their own. Many of our children face obstacles outside of school that affect their ability to learn inside school.

I am incredibly tired of our children being used as a political football. It is time for all good people to say enough is enough. We must stand up and speak for those who have no voice and no power to save themselves. It will be hard to make Arizona public education the envy of the Nation. But, it is possible and that possibility gives me hope.

Part 2 – Why Ducey’s Promise to Lower Taxes is a Lie

In my previous post, I showed why Governor Ducey’s focus on tax reduction is a disastrous recipe for our state. Now let’s look at how those tax reductions we’ve been seeing aren’t really helping the average Arizonan. Instead, we continue to see the tax burden transferred from those who have, to those who can least afford.

Governor Ducey is intent on eliminating income tax in Arizona. Why might you ask? Because, for this Governor and others like him, it is ALL about business. And although corporate tax breaks are good for large business, 97% of the employers in Arizona are small businesses like S-corporations, LLCs and partnerships. These businesses amount to over 40% of the private workforce and are currently taxed by the state via income tax. I’m not sure whether ASU’s Center for the Study of Economic Liberty 2015 policy report by Stephen Slivinski is the “policy roadmap to elimination of the Arizona income tax” as it claims, or, if it was written to support Governor Ducey’s tax reduction plan. At any rate, Slivinski concludes in the report that: “The best hope Arizona policymakers have to eliminate the income tax is to phase it out over a number of years while maintaining budget balance.” He also makes the point that now that the state is on “surer fiscal footing”; it is time for Arizona policymakers “to look at important and necessary reforms over the next couple of years.” Waiting longer he claims, “may result in losing a golden opportunity.” Sounds like a Ducey talking point commercial to me.

Arizona already has though, the 13th-lowest individual income tax and the 10th-lowest combined state and local income tax in the Nation. Additionally, according to an article in Business Insider in August 2014, Arizona’s economy was ranked the 4th fastest growing in the US after Colorado, California and Texas. Of course, we also have the 4th highest poverty rate in the US with one in five Arizonans living in poverty. Obviously, there are winners and losers in Arizona’s current economy and Governor Ducey’s insistence on eliminating the state income tax and shifting state revenue collection to increased sales tax will do nothing to help those who most need it. Although sales tax is said to be a less volatile form of revenue than income tax, it also is the most regressive, hitting the poorest the hardest.

Of course, income and sales taxes are just two ways a state can tax its residents, there are a multitude of others. Here’s just a few examples of how we continue to be “taxed” all the while Governor Ducey claims he is reducing our tax burden.

 1.  The highest per-pupil cuts in K-12 education funding in the Nation from 2008 to 2012 caused Arizona school districts to seek more locally controlled funding as a way to survive. The number of districts asking their communities for funding through bonds and overrides in 2015 was up 150 percent since 2008. The good news for districts is that the voters recognized the need for the funding and the approval rate for these measures was also high. The bad news is that this was no reduction in taxes, but just a shifting from the state to the local level. Unfortunately, often the communities with districts most in need have the least amount of capacity to help.

2.  Another solution many districts were forced to try in order to make ends meet was to reduce their school week from five days to four. As of May 2015, 43 districts (most in rural communities) in Arizona have already gone this route with many others considering following suit.  Arizona districts make up one-third of all four-day week districts in the Nation. There is debate over whether this move really produces the touted savings in the long run, but parents certainly don’t come out on top.  Rather, a four-day school week often requires parents to find childcare or, reduce the hours they work in order to care for their children when they are not in school. It also results in decreased wages for cafeteria workers and bus drivers. These people (especially in rural areas) may not have any real options to make up the difference.

3.  The state’s push of school choice via charters and Empowerment Scholarship Accounts (essentially vouchers) has been another way to transfer education costs to the local level. Charters usually require parents to transport their children to the school, do not offer any free and reduced lunch programs, and often require donations of parents. Schools in the Great Hearts Academy schools for example, “recommend parents contribute at least $1,200 to $1,500 per year per child to the school. There are also a variety of fees that are either not charged at all in district schools, or are much lower than what the charters charge.

4.  Even before Governor Ducey and the Legislature cut $99 million from our state universities and $19 million from our community colleges, Arizona had the deepest cuts in the Nation to higher-education spending. Those cuts drove the significant fee hikes and steepest tuition hikes as well, rising 83.6% since 2008.

5.  The Highway User Revenue Fund (HURF) which includes several taxes and fees such as the gasoline and vehicle license tax, was established to maintain roads, bridges and other transportation needs in the state. The Legislature swept about $860 million from this fund from 2000 to 2014 for other priorities. This forced local government to try to keep up with a more than $455 million in backlogs (with only 70% of cities reporting) for construction, repair, and maintenance of municipal streets. This isn’t just a double tax on Arizona residents (pay taxes to maintain the roads, then pay for car repairs after unmaintained roads cause damage), but also translates into a significant loss of jobs that could employ Arizonans to repair infrastructure and ensures that if and when the repairs occur, they will cost significantly more than if we had just maintained the infrastructure to begin with.

6.  In 2015, the state shifted 25% of the cost (about $12 million) for housing juvenile offenders to the counties, based on total population of the county. The counties are now required to raise the funds for this bill either through increased taxes or reduced services.

7.  Also in 2015, the cost to pay the Arizona Department of Revenue to collect and distribute sales taxes was passed down from the state to cities and counties. The change is expected to cost cities and counties about $17 million. This change applied even in counties that don’t charge a sales tax (such as Pima whose share of this new bill is $1.6 million.)

8.  In the past, the state picked up most of the cost of presidential primary elections. In 2016 however, the cost for these elections will be pushed down to the counties who will pay more than $3 million extra to cover those costs.

There are countless examples of this shifting of real costs, and even more in lost opportunity costs. Local governments say the state merely balanced its budget on their backs and saddled them with a huge financial burden that will continue to result in layoffs, tax increases and crumbling roads. Governor Ducey’s office responded that it is up to local government leaders to make responsible decisions. Really? How can local government leaders make responsible decisions when budget expenses they had no part in approving, are forced upon them without any vote in the process? Leave it to Ducey and Company to not only make a really bad brown matter sandwich for local governments to eat, but then also blame them for complaining how it tastes.

In this, as with any debate, it is possible to find a source to support any point of view. For me it is really this simple…does it make sense that you would tax the poor more to provide tax relief for the rich? Does it make sense that corporations are lured to locate in a state so they can pay even less than the under one percent they generally pay in corporate taxes? Or, does it make more sense that corporations are savvy and look at a variety of indicators to determine where to locate such as the quality of local schools, availability of a quality workforce, or a solid infrastructure? One doesn’t need to be a genius to understand basic economic concepts, all it really takes is a little common sense. A strong middle class is the best path to prosperity for our communities and our nation and economic policies that support its growth are the solution. Our tax policies should incentivize the behavior we need for the health of our communities, states and nation, not for the enrichment of a few. Finally, business definitely has a critical role to play, but so does government. It should ensure we are provided the basic essentials of safety, security, infrastructure and education and our tax policies should ensure sufficient revenue to do that properly. And, it should do that at the right level so as to ensure proper oversight and economies of scale.

No one party has the right answer here and there is no one right solution. It takes a smart application of available tools, wise employment of lessons learned and yes, a whole lot of common sense. Alas, as Voltaire is credited with saying in the early 1700’s: “Common sense is not so common.”

 

Why Ducey’s Promise to Lower Taxes is a Lie

During Governor Ducey’s inaugural address in 2015, he indicated that he would not support higher taxes with: “prosperity moves, and as taxes go up, it moves away. Gone as well are jobs, people and companies that found a better welcome someplace else.” Likewise, during his 2016 State of the State address, he bragged about lowering taxes and assured Arizonans that he will “lower taxes this year. Next year. And the year after.” Yes, he has been consistent about his promise to lower taxes and even to do away with the state income tax. He obviously subscribes to the GOP mantra of supply-side (some call it trickle-down) economics.

The basic theory of supply side economics is that marginal tax rates and less government regulation will help business expand and create more jobs. The Laffer Curve, named after Arthur Laffer, is a central theory of this philosophy and posits that lowering tax rates generates more economic activity eventually leading to more tax revenue. Proponents of this philosophy include the Koch-brothers-financed American Legislative Exchange Council (ALEC), Americans for Prosperity, and the Wall Street Journal’s editorial board. They claim that the nine states without personal income taxes are outperforming the rest of the states and that their success can be easily replicated in those states that abandon their income tax.   The non-partisan Institute on Taxation and Economic Policy (ITEP) however, says that Laffer focused on “blunt aggregate measure of economic growth” to support his contention. The truth says ITEP, is that states with personal income tax, even those with the highest rates, are experiencing as good, or better, economic conditions than those without. Still, there are plenty of examples of governors who insist on leading their states down the proverbial rabbit hole.

Take Governor Sam Brownback for example. When he took the reins in Kansas, he dropped the top income-tax rate by 25%, lowered sales taxes and created a huge exemption for business owners filing taxes as individuals. Now, five years after doubling down, his state lags in job creation, tax revenue is far short of expectations and bond and credit ratings have been downgraded.

In Oklahoma, Governor Mary Fallin and the GOP-led Legislature enacted a quarter-point reduction in the top income tax rate two years ago and corporate tax breaks when oil crude prices were riding high. Oklahoma’s Republican Treasurer Ken Miller, who advocates for revenue-neutral tax cuts, blamed his GOP colleagues for the now “self-inflicted” crisis. Miller said: “Common sense dictates that until the state proves it can live within its means, it really should stop reducing them, yet some ‘thinkers’ continue to advocate eliminating the state income tax – even arguing that the state’s largest funding source and be vanished without a replacement and still fund needed teacher pay raises.” To Arizonans I ask: “sound familiar?”

In Wisconsin, Governor Walker enacted several permanent tax cuts just as the national recession ended and state revenues began to climb. His speech this year to ALEC was all about how his “big, bold reforms took the power out of the hands of big government special interests.” What he didn’t say is that his reforms produced only about half of the jobs he promised and resulted in delayed debt payments and deep cuts to education to balance the budget.

In North Carolina, with all three branches of government now securely under GOP control, money saved from cutting safety net programs wasn’t reinvested into education, job training or infrastructure, but given to the wealthy and corporations in the form of tax breaks. In September, the NC legislature signed a budget into law that provides $400 million in income tax cuts to be offset by taxes on repair, installation and maintenance services.  Alexandra Sirota, who studies tax policy for the NC Justice Center said the affect of the lower taxes “is a huge revenue loser” and that “the revenue losses aren’t fully accounted for in the next few years.”

At the root of it all are ALEC’s questionable economic and fiscal assumptions and faulty analysis. Specifically, these policies include deep cuts in income taxes, particularly for affluent households and corporations; a repeal of state income and estate taxes; and a shift in state revenues from graduated-rate income taxes to sales taxes that are much higher than what exist today. They also include the end of various state-based tax credits for low-income working families; a Taxpayer Bill of Rights (TABOR) that would impose rigid constitutional limits on state revenues and spending; requirements that state legislatures garner two-thirds or other “super-majority” votes to raise any taxes or fees; and other mechanisms to reduce the funds available to finance public services. ALEC also pushes the repeal of state personal and corporate income taxes, which typically provide one-third to one-half of a state’s funding for schools, health care and other services. Finally, ALEC and its supporters fail to acknowledge that public services such as education or infrastructure are important to a state’s long-term prosperity.

Mainstream economic research though, shows that state taxes average less than one percent of a business’ total costs. Extensive economic research indicates that tax-funded public services like education, health, transportation, and public safety are more important for attracting businesses and jobs.  In fact, Paul O’Neill, former CEO of Alcoa and President George W. Bush’s first Secretary of Treasury said: “[As a businessman] I never made an investment decision based on the Tax Code…[I]f you are giving money away I will take it. If you want to give me inducements for something I am going to do anyway, I will take it. But good business people do not do things because of inducements, they do it because they can see that they are going to be able to earn the cost of capital out of their own intelligence and organization of resources.” Robert Ady, of Ady International has assisted in countless business site locations. He says that “subsidies cannot make a bad place good.” Good places are competitive because their long-term business basics (labor, materials, marketing, overhead, and transportation) are solid. As Greg LeRoy, founder and director of Good Jobs First, said in his book The Great American Jobs Scam, “any subsidies are icing on the cake, but the cake is already baked.”

Yet, Governor Ducey insists on following the ALEC playbook with his plan to eliminate state income tax. During his gubernatorial campaign, he promised not to postpone a $225 million corporate tax cut to be phased in over three years. To the Arizona Tax Research Association, Ducey bragged about signing legislation to index the state’s income tax brackets ensuring salary increases that don’t outpace inflation don’t bump earners into higher tax brackets. Ducey claimed it was “an important first step in our mission to reduce income taxes in the State of Arizona every year.”

Stay tuned for the second half of this post in which I’ll explain why I claim Governor Ducey’s promise to lower taxes is a lie. Small spoiler alert…he may be committed to reducing income taxes, but there is WAY more to this story.

Open Letter to Governor Ducey

It was fitting that your propaganda piece, “Arizona schools win big in my budget” was published in AZCentral.com’s “AZ I See It” column. After all, I understand this is your view of reality. But, the fact that it is your view, doesn’t make it factual.

You open your piece speaking of last year: “we protected priorities, like K-12 education…” Not sure how you can claim you protected K-12 education when in 2015, you cut $113.5 million from K-12 district schools and reduced charter additional assistance funding by $10.3 million. This year, you claim credit for “an historic $3.5 billion funding package for schools.” Yeah Governor, you are just a regular education philanthropist, digging deep into the schools own coffers (state trust lands revenues set aside for education funding) to give our schools the money they’ve been owed since 2009. You offered this deal to take additional monies from state trust lands, despite Arizona ending last fiscal year with an extra $312 million in the bank and being on-track to end FY2017 with $621 million. To add insult to injury, you now plan to pad the states’ rainy day fund with an additional $10 million to bring the balance to $470 million. I have to wonder how many corporate tax breaks will that fund?

 Despite your largely unearned grandstanding, I’m going to hold my nose and vote for Prop. 123, because I think it is the only way we will get any significant additional funding for our schools anytime soon. Rest assured though that education advocates throughout the state are going into this eyes wide open. We know there are caps and triggers in the deal that could allow the legislature to cheat our kids yet again. Just know that we will be more vigilant than ever and that “Hell hath no fury” like advocates scorned after negotiating in good faith.

Of course, taking credit for new funding when you are really just restoring it seems to be a trend for you. You claim to be targeting high-need employment sectors with a “new”, $30 million investment in career and technical education (CTE.) Give me a break! This is the same $30 million the Legislature cut from CTE in 2015. It is definitely not a “new” investment and you aren’t even proposing to give it all back at once. Rather, you: plan to give only $10 million per year over three years; only want it spent on certain kinds of programs; and are requiring matching funds from business. House Minority Leader Eric Meyer said “two thirds of the JTEDS across the state will disappear under this plan, it will create havoc.” He went on to question “why we are ‘fixing’ this program that already works so well to train our kids for the workforce.” These programs are proven to produce higher graduation rates, provide job skills for those not necessarily destined for college, and provide employers the skilled workers they so badly need. The reduced funding won’t only hurt JTEDs, but also district schools who get funding for their students participating in the job training programs.

Speaking of reduced funding in district schools, I noticed you didn’t mention that FY2017 will see the implementation of last year’s legislation to change the district funding model to “current year funding” versus the “prior year funding they’ve been using for the past 30 plus years. Essentially, this will immediately cheat our district schools out of one year’s worth of funding totaling $40 million across 64% of Arizona’s districts. And, while you claim this year’s budget proposal makes new investments in our universities, you failed to mention that your “plus-up” is really only $8 million, less than 10% of the $99 million cut in the 2015 budget. As for our community colleges, I note you also didn’t mention restoring any of the state funding you entirely eliminated from Maricopa and Pima colleges in 2015.

I do thank you for inviting all Arizonans to read your budget and join the conversation about it. You do, after all, work for us and we absolutely should give you feedback on the job you are doing. You can bet I’ll visit azgovernor.gov/budget, read your budget in detail, and comment. I wholeheartedly encourage all my fellow Arizonans to do the same.

Respectfully, Linda Lyon