Ducey: K-12 needs money first, then reform

Gov. Doug Ducey's plan to ask voters to infuse more than $2 billion into K-12 education over the next decade was met Thursday with cautious optimism by education groups, state lawmakers and even some of his most strident critics, who say the plan offers a short-term solution to a persistent problem.

Under Ducey's plan, schools would get an extra $300 per student per year to boost per pupil funding by the state from the current $3,400, which is the lowest in the nation. Before it goes to voters, however, the Legislature needs to pass a resolution to put it on the November 2016 ballot.

Ducey's proposal requires no tax increase but instead hinges on public support for increasing funding from the state-land trust's permanent fund from 2.5 percent to 10 percent each year for the next five years. It would then drop to 5 percent and expire at the end of 2026.

The new Republican governor rolled out his proposal inside the library at Phoenix's Central High School, acknowledging that public schools need more money. He said his plan gives schools the resources they need without raising taxes — a key pledge of his 2014 campaign. Ducey, who has faced intense criticism over his education policies, said that before conversations about his ideas to overhaul the state's education system can take place, funding levels need to be increased.

Arizona continues to be among the lowest-ranked states for per pupil funding, and its expenditures have fallen while the rest of the nation's have risen, a new U.S. census report based on 2013 data said. The report, released this week, ranked Arizona last in the amount of funding provided by the state.

"Our public schools say they need more money to do their jobs," Ducey said, flanked by educators, business leaders and lawmakers. "Under this plan, they will get those resources. Second, it allows Arizonans to decide whether they want more resources in our public schools. I'm confident they will say 'yes,' and I'll be leading the effort ... to make the sale."

Ducey's plan builds on a previous ballot proposal that he, as state treasurer, successfully promoted in 2012. That plan increased the amount of money coming to schools from the land trust's permanent fund to a steady 2.5 percent a year, which has equaled $80 million annually.

Arizona was given 9.3 million acres of land at statehood to be held in trust, primarily for the benefit of public education. The state invests proceeds from land sales and leases to grow the fund, which currently stands at $5.1 billion.

Some questioned if the plan would erode the state's long-term ability to use the trust to fund public schools, noting that a 10 percent annual withdrawal reduces the fund's principal. But relying on projections from his budget office, Ducey said he expects the trust to increase to $5.39 billion by fiscal year 2021, even with the increased distributions. The 10 percent withdrawal rate drops to 5 percent after five years to protect the principal, he said.

Asked earlier in the day why he's not addressing funding for universities, which took a $99 million cut for the coming year, Ducey responded, "The first issue is K-12."

Tim Ogle, executive director of the Arizona School Boards Association, said the group is "relieved" that the governor acknowledges the need for more school funding.

"We have school districts that are starving," Ogle said. "The hard part, of course, will come in moving forward with ballot language that will garner broad-based support."

Other educators applauded the idea, although some agreed that "the devil's in the details," as Kent Scribner, Phoenix Union High School District superintendent, put it. New funding would allow money-strapped schools to boost academics, hire teachers, restore arts and music programs and upgrade outdated technology and classroom materials.

Moses Sanchez, president of the Tempe Union High School District governing board and a Ducey supporter, said the plan would bring about $4 million a year to the district.

"This is outside-the-box thinking," he said. "I think he laid out a great case on why we have all this money sitting on the sidelines, why not tap into that?"

Bill Gregory, executive director of Legacy Traditional Schools, a charter-school group, said he doesn't see a downside.

"In what I have heard and read, I don't see how this could be a bad thing," he said. "It's a way to get money into the classroom without raising taxes."

State Rep. Paul Boyer, R-Phoenix, who is chairman of the House Education Committee, said he is "ecstatic" about the proposal. He's been worried about the loss of extra state aid to small schools in the coming year's budget and said this could provide a fix, albeit down the road.

But as promising as Ducey's plan might be, schools have immediate funding needs, Democratic lawmakers said. Ducey's proposal, if enacted, would not take effect until 2017.

Andrew Morrill, president of the Arizona Education Association, said he is encouraged by the talk of pumping significant money into K-12, especially given the new census report.

"We need some clarity on how this is going to work," Morrill said. "It's hard to describe in Arizona that it's an 'Opportunity for all' when you're underfunding the Number 1 vehicle to create an opportunity for all," he said, referencing Ducey's campaign promise of no new taxes to fund education.

Tim Hogan of the Arizona Center for Law in the Public Interest cautioned that the proposal could pick up unneeded baggage, such as attempts to reform land-trust procedures or to change the planning process, once it starts moving through the Legislature. Ducey did not signal whether he intends to call a special legislative session or wait until next year's regular session to address the referendum.

"The cattle growers have been interested in changing the grazing-ease provisions," said Hogan, who has opposed previous land-trust measures. "Anytime you introduce additional items, you start to lose support."

Sen. Katie Hobbs, D-Phoenix, said Ducey's plan is promising, but she needs more details before she can get on board.

"There's still a lot we don't know," she said. "What happens after 10 years? This isn't a permanent solution. And, what if it doesn't get passed by the voters?"

Likewise, House Democratic Leader Eric Meyer, D-Paradise Valley, said the plan needs to be structured carefully to ensure the money goes to classrooms.

Ducey said the extra money would be dedicated to the state's school-funding formula. His spokesman emphasized Ducey intends this to be new money, meaning the Legislature should not cut other education dollars if trust-fund money flows in.

Republic reporter Cathryn Creno contributed to this article.