State budget deal lacks Prop 123 funding mechanism, additional ESA program staff

Arizona Gov. Katie Hobbs made Proposition 123 a major issue during state budget talks, but the education funding mechanism isn’t included in the $18.29 billion spending plan she and Republican lawmakers agreed to Monday.

Prop 123 was approved by voters in 2016 but expired last year. It increased the amount of State Land Trust money allotted to public education by about $300 million per year. The GOP-controlled Legislature would have to refer it to the ballot to give voters a chance to renew in November.

In March, the Democratic governor temporarily cut off budget talks because Republicans wouldn’t consider Prop 123 as part of the spending plan for the fiscal year that starts July 1.

“The Republicans have said we’re not going to do a [Prop] 123. That is not acceptable. And if they don’t want to do that, they need to show Arizonans what their plan is to invest in our schools,” Hobbs told reporters in April.

After lawmakers announced Monday they’d agreed upon a deal, the governor issued a statement that briefly mentioned education but didn’t address the absence of Prop 123.

“With this agreement, we are delivering a $1.4 billion tax cut for working class families, investing in job creation, education and water security while tightening our belts and securing a moratorium on the data center tax exemption so we can develop a responsible path forward that protects our water future and lowers utility bills for Arizona families,” she said.

When asked about Prop 123 on Thursday, Hobbs told reporters that she’s still hoping to get an extension in front of voters.

“There’s a few factors,” she said. “One is getting a deal through the Legislature that works for Arizonans, and the second part is having the buy-in of all the folks that need to push it across the finish line at the ballot box.”

She indicated that conversations were ongoing.

“I am proud that this budget does not shortchange public schools, and we have time to still continue the conversation down the road on a Prop 123 extension,” she said.

The Legislature is expected to pass the budget this week after hearings and send it to Hobbs’ desk.

State Superintendent Tom Horne, a Republican, has been advocating for Prop 123’s renewal for years and told KTAR News 92.3 FM last week it’s a problem for Arizona classrooms now that it has been neglected in the budget.

“It’s very damaging to the state that we pay our teachers so badly. We’re at the bottom of the pack as far as we pay our teachers, they can make a lot of money by moving to a neighboring state. To me it’s a high priority. I’ve been emphasizing it to the legislature. I’ll keep lobbying the Legislature and hopefully we’ll [have] more success next year,” he said.

Horne said Prop 123 is the easiest way to raise teacher pay as the Legislature looks to cut spending in other areas.

ESAs protected in budget, but voucher program staffing isn’t addressed

Meanwhile, Republican lawmakers said the budget plan protects the state’s Empowerment Scholarship Account (ESA) school voucher program.

The program allows parents to use taxpayer education money for alternative schooling options like homeschool or private school.

However, Horne said in a statement Wednesday he is disappointed that the budget doesn’t give the Arizona Department of Education additional staff to administer the ESA program and review purchases.

“Staffing to deal with the ESA program was determined when the program had 11,000 students. In the past three years, the program has expanded to over 100,000 students. Despite numerous requests by us, the Legislature and governor have not adjusted staffing to this almost tenfold increase in the number of students,” he said.

Horne has been requesting more employees for over a year and pointed to the lacking of staffing when responding to allegations of ESA fraud.

KTAR News 92.3 FM’s Colton Krolak contributed to this report.

Funding for this journalism is made possible by the Arizona Local News Foundation.

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