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February 5, 2016

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AZ Legislature, Budget, CTE/JTED, Education, General Arizona, Opportunity, Privatization, Public Education

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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.

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February 2, 2016

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AZ Legislature, Budget, Democracy, early childhood education, Economics, Education, Opportunity, politics, Poverty, Prisons, Privatization, Public Education, taxes, Uncategorized

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AZ again at bottom in “50 States Report”

The Network for Public Education (NPE), a public education advocacy group headed by the Nation’s preeminent public education expert and advocate, Diane Ravitch, released their “A 50 State Report Card” today. As the name indicates, the report card grades the 50 states and the District of Columbia on six criteria: No High Stakes Testing, Professionalization of Teaching, Resistance to Privatization, School Finance, Spend Taxpayer Resources Wisely, and Chance for Success. Letter grades from “A” to “F” were then averaged to create the overall GPA and letter grade for each state.

I was proud to note the study was conducted with the help of Francesca Lopez, Ph.D. and her student research team at the University of Arizona. They assisted in the identification of 29 measurable factors that guided the ratings of the six criteria and created a 0-4 scale for ratings and then evaluated each state on the 29 factors. The graders were tough, with only 5 states earning an “A” grade and no state’s overall grade exceeding a “C.”

Not surprising to anyone who keeps up with Arizona public education, the state ranked 48th, but I assume only because Arizona begins with an “A.”   Arizona’s grade of 0.67 earned it an overall “F”, numerically tying it with Idaho and Texas (in 49th and 50th place), just above Mississippi.

The first criterion evaluated was “High Stakes Testing” which according to NPE has caused “the narrowing of the curriculum and excessive classroom time devoted to preparing for tests.” The organization also points to peer-reviewed studies highlighting “the potentially negative impacts of this practice, including the dismissal of quality teachers and the undermining of morale.” Five states received an “A” grade for their rejection of the use of exit exams to determine high school graduation, the use of test results to determine student promotion, and educator evaluation systems that include test results. Arizona received a grade of “C” in this area.

The second criterion evaluated was “Professionalization of Teaching”, because “many of the current popular American reforms give lip service to the professionalization of teaching while displaying an appalling lack of understanding of what professionalization truly means.” NPE points to research that “shows that experience matters and leads to better student outcomes, including increased learning, better attendance and fewer disciplinary referrals.” High grades were given to states that exhibited a commitment to teaching as a profession. Unfortunately, no states were awarded an “A” in this area and only two states, Iowa and New York received a “B.” Arizona received a grade of “F” which goes a long way towards explaining our state’s critical shortage of teachers.

In the area of “Resistance to Privatization”, seven states received an “A” grade. The evaluation of this criterion was centered on school choice policies that “move control of schools from democratic, local control to private control.” Market-based approaches (vouchers, charters and parent trigger laws) reports NPE, “take the governance of schools out of the hands of democratically elected officials and the local communities they serve, and place it in the hands of a few individuals – often elites or corporations with no connections to the community.” Such policies drain resources from neighborhood schools and don’t overall, produce better results in general. NPE writes “they also serve to undermine the public’s willingness to invest in the education of all children while creating wider inequities across the system as a whole.” Since NPE believes in strengthening community schools, they evaluated states on whether they have laws, policies and practices that support and protect their neighborhood schools. As an early leader in school choice, Arizona more than earned the “F” grade it was awarded.

Since the level of poverty in a school is the single best predictor of average student performance, “School Finance” was another criterion evaluated. NPE looked at whether states adequately and fairly funded their schools noting that “resources like smaller class sizes and more support staff lead to significantly higher achievement and graduation rates – especially for poor and minority students.” Only one state, New Jersey, received an “A” grade in this area. This is not surprising since in the past decade, the gap in spending between rich and poor districts has grown by 44%. NPE calls for states to sufficiently fund public education and implement progressive financial polices that “provide the most funds to districts that demonstrate the greatest need.” The factors used to determine a state’s grade were: per-pupil expenditure adjusted for poverty, wages and district size/density; resources spent on education in relation to the state’s ability to pay based on gross product; and increased proportion of aid given to high-poverty districts than to low-poverty. Once again, Arizona received an “F” grade in this area.

In evaluating the criterion of “Spend Taxpayer Resources Wisely”, NPE looked at how states’ education dollars are spent. As research shows the significant benefit of early childhood education, high quality pre-school and all-day Kindergarten were a significant factor in the evaluation as were lower class sizes and the rejection of virtual schools.   In this area, Arizona received a “D” grade, with no states receiving an “A” and only Montana receiving a “B” grade.

“Chance for Success” was the final criterion evaluated. It looked at state policies directly affecting the income, living conditions and support received by students and their parents/guardians. NPE says that residential segregation is largely responsible for school segregation. However, the organization says, “state policies that promote school choice typically exacerbate segregation and charters often isolate students by race and class.” The states that had fewer students living in or near poverty, and have the most integrated schools received the highest grades. No states received an “A” grade, but 10 received a grade of “B.” In this final area, Arizona received a grade of “D.”

It can be no coincidence that Arizona continues to finish last, or close to last, in the vast majority of every report on state public education performance. In fact, the only report I’ve found it to be rated better than at the bottom is from the American Legislative Exchange Council’s (ALEC) Report Card on American Education. Not surprising from this highly conservative “bill mill” for the Koch Brothers and the GOP, which works to develop model legislation favorable to its corporate members and provide it to legislators for implementation in their states. It speaks volumes about ALEC’s focus when even though Arizona ranked 47th on the 2013 National Assessment of Educational Progress (NAEP), they gave the state an overall B- on education policy. That’s because ALEC values states’ support of charter schools, embrace of home schools and private school choice programs, teacher quality (as defined by the National Council on Teacher Quality) and digital learning. For the most part, the positions ALEC takes on education policy are the exact opposite of NPE’s positions. ALEC pushes school choice and the privatization of public education and in Arizona, the Goldwater Institute does it’s part to support ALEC in it’s efforts to kill public education. What’s in it for ALEC, the Goldwater Institute, their legislators, donors and corporate members? As is often the case, it’s all about money in the form of campaign donations for legislators, profits for those in the for-profit charter and private school business, increased tax breaks for donors and welfare for corporate members. You might ask how privatizing education can lead to increased corporate welfare when such privatization will undoubtedly lead to increased costs? (Think privatization of prisons.) Easy, when the state’s cost for “public” education is passed on to those taking advantage of the privatized option via vouchers and charters. It is well known that both often cost more than the state provided funding covers and parents must pick up the tab.

I attended the first NPE Conference held in 2013 in Austin, Texas where I was privileged to meet and hear Diane and numerous other leaders in the effort to save public education. I, like them, believe (as Diane writes in the NPE report) “educating all children is a civil responsibility, not a consumer good.” And although the phrase “civil rights issue of our time” is way overused, I deeply believe it rings true when, (as Diane writes) it refers to “sustaining our system of free, equitable and democratically-controlled public schools that serve all children.”  I’ve quoted him before, but John Dewey’s words bear repeating until we, as a nation “get it”: “What the best and wisest parent wants for his child, that must we want for all the children of the community. Anything less is unlovely, and left unchecked, destroys our democracy.” Yes, we should act on public education as our very democracy is at stake, because it is!

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February 1, 2016

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AZ Legislature, Budget, Democracy, Democratic, Economics, Education, General Arizona, Opportunity, politics, Poverty, Privatization, Public Education, taxes

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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.

 

 

 

 

 

 

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January 26, 2016

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AZ Legislature, Budget, CTE/JTED, early childhood education, Economics, Education, politics, Public Education

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A Tale of Two States

As a kid, one of my favorite authors was Charles Dickens. In his 1859 novel, A Tale of Two Cities, he “depicts the plight of the French peasantry demoralized by the French aristocracy in the years leading up to the revolution.” Hmm, peasantry demoralized by the aristocracy…that reminds me of something…wait, I’ll think of it. Maybe, it is the fact that the 62 richest people in the world now own more than the poorest half? In fact, their wealth has increased 44% since 2010 while the bottom half’s has dropped by 41%. And in the U.S., the wealth inequity is now worse than at any time since the Great Depression. The Walton family alone owns more wealth than 42% of American families combined and CEO-to-worker pay-ratio is 354-to-1. Americans haven’t taken to the streets with pitchforks (the “Occupy” movement aside) to demand “off with their heads” yet because for the most part, they still believe in the American Dream. That is if one works hard enough, they can move up the economic ladder. The truth is more like comedian George Carlin joked: “the reason they call it the American Dream is because you have to be asleep to believe it.”

Although reference to the concept of the American Dream was made as early as the 1600s by those who came to America from England for the chance of a better life, it was most likely “codified” in the Declaration of Independence, which proclaims that “all men are created equal” with the right to “Life, Liberty and the pursuit of Happiness.” Part of this right and critical to achieving the dream are the opportunities to receive a good education and work that provides at least a living wage. But, the game is now stacked. Stacked in favor of the wealthy, stacked in favor of corporations, stacked against the middle class who is increasingly squeezed, and stacked against children who don’t come from a family of means.

Of course, everyone has a different idea about how to “unstack” the deck. In fact, as I mentioned earlier, some don’t even see the deck as unfairly stacked. I am firmly in the “”deck is stacked” camp and believe if we don’t start to make progress at turning the tide, pitchforks may be in our future. In Arizona, Governor Ducey thinks the way to move our economy forward is vouchers and charter schools, no individual state income tax and very little tax on the corporate side, and oh yeah, the “sharing economy.” Really, a “sharing economy”? Could it be that Ducey and I agree on something? I mean, I think it would be great if we would all share equally in our economy. After all, when Arizona’s top 1% pays only 4.6% of their income in state and local taxes while the bottom 20% pays 12.5%, we could really use some sharing. What you say? He was referring to “sharing” type businesses like Über and Lyft where the services are cheap and convenient, but the workers have no rights or benefits? Oh, okay, that sounds more like current Arizona leadership.

Just for kicks, let’s look at another state’s version of the way forward. Interestingly, Massachusetts has almost exactly the same population as Arizona, 6.8 million. Both states also have the Tea Party in common although with Massachusetts, it is mostly in their past (as in Boston in 1772) and in Arizona it is very much in the present.

Politically, Arizona is GOP led with no statewide Democratic leaders and both the state senate and house under GOP control. Massachusetts conversely, is almost entirely led by Democrats with the exception of their governor who is a Republican. Given the political parties’ priorities, it should be no surprise then that MAZ vs MAassachusetts ranks much better in education and child well being than Arizona. What may surprise some though, is that while Arizona’s economy ranks 25th in the Nation, Massachusetts’ comes in at #6.  

Why might you ask? Well, I have a few theories and as you can imagine, the state’s prioritization of public education is at the top of my list. Take Career Technical Education (CTE) for example. It produces significantly higher graduation rates than traditional district high school programs, often provides living wage jobs to graduates, and helps provide skilled workers for the employers who so badly need them. It is, by all accounts, a win-win-win. Massachusetts Governor Charlie Baker obviously gets this as indicated by his recent proposal to add an additional $83.5M for vocational education.   Included in this is a $75 million five-year capital program to finance grants for school equipment and expansion an additional $8.5 million for grants for “school-to-career connecting activities.

At the same time, we have Governor Ducey objecting to restoring the $29 million in cuts to CTE made in last year’s budget. Instead of embracing the AZ Legislature’s veto-proof coalition to restore the funding, Ducey wants to only restore one-third of the funding for only three years and, attach a variety of strings to the money including a requirement for business matching of the funds. This despite a plea for repeal of the cuts signed by 32 business and education leaders as to the importance of CTE.

Maybe Governor Baker just had better advice than Governor Ducey. Tim Murray, a regional chamber of commerce president who toured 64 votech and agriculture education programs when he was the Lieutenant Governor of Massachusetts, said “the single biggest need” of the business community “regardless of the size of the company, regardless of the sector” is a “pipeline” of available workers. Surveys of 352 employers and 475 parents recently conducted by The Dukakis Center in Massachusetts revealed that 90% of employers see a need to increase CTE graduates, while 96% of parents had a favorable opinion of the CTE programs they children attend.K-12 az ma

But wait, there’s more. I believe one of the best determinants of the value someone or an entity places on something is what they are willing to pay for it. Massachusetts obviously values education. I know there are those of you ready to say: “there are plenty of examples of more money not producing better results.” Yes, that is true. But in almost every case, I’d be willing to bet where money doesn’t help, there are significant social issues outside of the schools that keep students from learning and achieving. It is obvious, by Massachusetts’ #1 ranking in education achievement, that their money is well spent.

Of course, as mentioned earlier, we know there are factors outside of the school that determine how children do in school. Massachusetts has lower unemployment, their residents earn higher salaries and they are less likely due to lose their homes to foreclosure. Their residents are also better educated, safer, and healthier. They also have fewer disabilities, likely from the better health care they experience. It should be no surprise that Arizona also has four times the adults in state prison as does Massachusetts, spending hundreds of millions more in this area. Yet, Arizonans are no safer with over double the murder rate.

Some claim that Massachusetts is more successful in some areas because society is more homogenous with 74.3% of its residents being white as opposed to only 56.2% in Arizona. There may be some truth to that since unfortunately in the U.S. today, socioeconomic status often has to do with the color of one’s skin. But, Arizona is doing little to address this issue even though our state’s share of white K-12 students dropped below 50% in 2004 and Latin@s K-12 students are on the cusp of breaking 50%. One example of this blind eye toward the problem is new HB 2401 sponsored by Vince Leach-R SaddleBrooke. The bill, titled “Schools; Desegregation Funding; Phase-Down” phases out funding for desegregation expenses, a cut of about $211 million dollars. These funds will hit some of our most vulnerable children, about 22,500 English Language Learners (ELL) and leave high performing magnet schools, such as Phoenix Union’s Metro Tech High School, without their primary source of funding. It is in two words, extremely shortsighted. Learning English is critical to these student’s future success and by extension, that of our state. They will either be contributing members of our society or drains on it. This is a clear example of “you can pay me now, or you can pay me later.”

So let’s recap. Massachusetts performs better than Arizona in education, child welfare, health and safety, the economy and many other areas. Yes, taxes are a little higher ($1,706 per person in 2013), but look what you get for your money! I’m well aware of course that this line of reasoning will fall on many a deaf ear that think the only good government is a starved one. It can’t be said enough though that taxes are not bad or good, they are the price of living in a well-functioning society with a decent quality of life. There are many things such as education for all and safety that are best provided by the government. It our duty (the voters) to determine our priorities for our hard earned tax dollars and then elect candidates that will ensure those priorities are provided for and secured. That is how we keep ourselves free.

 

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January 23, 2016

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AZ Legislature, Budget, CTE/JTED, Education, General Arizona, politics, Privatization, Public Education, taxes

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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.

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January 20, 2016

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AZ Legislature, Budget, Education, General Arizona, Opportunity, politics, Poverty, Public Education

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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.”

 

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January 18, 2016

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AZ Legislature, Budget, Economics, Education, General Arizona, taxes

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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.

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January 17, 2016

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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

 

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January 15, 2016

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$82,996 is low income…REALLY?

Kudos to Arizona Representative Doug Coleman, R-Apache Junction, who has introduced HB 2063 to cap the limit for corporate donations to School Tuition Organizations. His bill looks to cap the “year-over-year limit at 2 percent or inflation for the Phoenix metropolitan area” for corporate donations. 501(c)(3) tax-exempt organizations, these STOs allocate at least 90% of their annual revenue to tuition awards for students to use to attend qualified schools. Proponents claim STOs allow underprivileged students the opportunity to attend private schools they would otherwise not have access to. Critics however, note that these corporate credits don’t truly serve the “low-income” population.

According to Arizona law, the current definition of “low-income” for this credit is a “family of four with an annual income of $82,996.” Given that the median household income for an Arizona family of four in 2014 was $50,068, that annual income really can’t be legitimately defined as “low income.” Jonathan Butcher, of the Goldwater Institute, said: “The eligibility is set up to help students no matter where they are in their life and where their family is,” he said. “The scholarships seem to be pretty modest, often around $2,000. Families can use the scholarships to get close to where tuition may be.”

Problem is, tuition at many private schools is much more than the scholarship amounts and parents are left to cover the rest. Senator Steve Farley, D-Tucson said “it’s almost impossible for someone who is poor to benefit because even if they get a scholarship, they still have to come up with the rest of the tuition.” For the 2013/2014 school year, limits were $4,900 for grades K-8 and $6,200 for grades 9-12. The average corporate tax credit scholarship for students at All Saints’ Episcopal Day School in Phoenix was $9,405. With the average private school tuition in Arizona for 2015 at $10,236, it is hard for low-income families to bridge the gap. And, there is no rule to preclude parents from getting multiple scholarships for their child from multiple tuition organizations. The state doesn’t track how common that is. Senator Steve Yarbrough, R-Chandler, (who profitably runs the Arizona Christian School Tuition Organization), “admits many of the scholarship recipients likely would go to private school without the financial help.” Unfortunately, it is almost impossible to prove these allegations since the STOs aren’t required to divulge information required to get to the truth.

Representative Coleman’s bill is meant to help ensure the program’s sustainability. Although Arizona lawmakers placed a statewide $10 million annual cap on the corporate credits, the law allows a 20% per year increase.   Next year, the cap for all private school tuition corporate tax credits will increase automatically to $62 million and by 2030; it will be ten times that amount. That number is especially significant when one considers that for the last budget year, Arizona’s corporate income tax collections were $663 million, and more than 7 percent of state tax revenues. One has to wonder where all this money is going and what the diversion away from the general fund does to the state’s ability to operate.

Senator Debbie Lesko, R-Peoria, is against the cap claiming it gives “needy” children opportunities they wouldn’t otherwise have. She also claims that more money in scholarships means less students in public schools and that ultimately, saves taxpayers money. This claim only holds water if a student started out in public school before switching to a private school. A 2009 Arizona Republic article reported that out of the 50,000 private school students, only 7,350 students had been added since the tax-credit program started [in 1998]. Not exactly an indication of resounding success. The more likely driver for Senator Lesko’s support of this program is the fact that she is the Arizona state chair for the American Legislative Exchange Council (ALEC.) This Koch brothers-backed, tax-exempt organization works with its corporate members to create model legislation favorable to their corporate interests. Then ALEC provides these model bills to state legislators to implement back in their home states. ALEC’s Education Task Force has pushed school choice, vouchers, charters, parent trigger laws and yes, education tax credits. Along with providing the template for the legislation titled “The Great Schools Tax Credit Program Act” ALEC provides recommendations to state legislators designed to help them “sell” the program to the public. They acknowledge the model legislation includes “students presently enrolled in a private school” and therefore “reward[s] many families already financing their child’s education.” They tell legislators to consider limiting “eligibility to students who attended a public school in the last year or are starting school in their state for the first time.” This, they point out, will likely produce “a savings for state taxpayers since a scholarship covering private school costs in many cases will be less than the cost of state support provided to students attending a public school.”

They also recommend to lawmakers that if they “decide to include a statewide tax credit cap in the legislation…language should be added to automatically allow the cap to increase by 25% in any year after 90 percent of the cap was reached in the previous year.” As for the contribution amount allowed, ALEC states that although a 50% cap is deemed more equitable, making a higher “percentage of a donor’s tax liability eligible” for a credit can make it easier to raise donations. Higher amounts though they acknowledge, “open the program up to charges that money is being diverted from non-education programs to support private schools.”

The dollar amounts are significant. For the 2008 tax year, nearly three-fourths of corporations (over 35,500) that filed income taxes in Arizona had the minimum tax liability of $50. In 2009, there were 54 corporations reducing their state income tax via the private school tuition tax credits, lowering their income tax by over $5.5 million with a carry forward of $1.2 million to reduce future taxes. Then In 2010, 63 corporations donated $11 million to private school tuition organizations, with 8 donating at least $500,000.

This, all the while corporate taxes have been shrinking in Arizona. At 9.3% in 1990, corporate income tax is currently at 6.968% and will phase down to 4.9% by 2017. When fully phased in, these cuts will cost the state about $270 million each year, that’s enough to restore full-day kindergarten across the state and much, much more. This doesn’t even include the commercial property tax rate, which has also been cut from 25% in 2005 down to 18% this year.

 In addition to the issue of sustainability, is the issue of which private schools are getting the corporate tax credit money. At least one-fourth of the 64 schools on the states approved list of School Tuition Organizations certified to receive donations for the corporate income tax credits are religious institutions. Yes, the Arizona Supreme Court has deemed this constitutional via what many believe are convoluted reasoning, but it still should give pause to the majority of taxpayers – those that support the separation of church and state. Additionally, I was unable to determine of the $11 million donated by corporations in 2011 and in subsequent years, how much was actually paid out? There are numerous questions about these school tuition organizations and the corporate tax credits that fund them. Unfortunately, laws designed to preclude transparency and accountability prevent these questions being answered. It is obvious to me that Representative Coleman’s bill makes total sense, which unfortunately means it will probably be a tough sell in the Arizona Legislature. Let’s hope against hope that reason prevails.