Hobbs makes her push for Prop 123 renewal, but it’s dead on arrival at the GOP legislature

Yazmin Castro is a student at Apollo High School in Glendale, and she’s had a front-row view of how the state’s ongoing teacher shortage impacts schools. 

A September 2023 report from the Arizona School Personnel Administrators Association estimated that more than 6,000 teacher positions across the state were either vacant or filled by an unqualified candidate well into the first month of the school year, the eighth year in a row the state has faced a significant shortage of educators. 

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For Castro, that crisis manifests at her school in a dearth of advanced classes, because there aren’t enough instructors to go around. And, she added, required classes often only have one time slot for kids to sign up, leaving many in the lurch. 

“These students deserve the opportunity to have the right classes on the path they want to take,” she said at a Monday press conference advocating for increased school funding. “The lack of teachers should never be a roadblock in a student’s education.” 

The teen joined Gov. Katie Hobbs and Democratic lawmakers to back Hobbs’ version of a Prop. 123 renewal, which has been seized on by both the Republican majority and the governor as a way to resolve the state’s teacher shortage. 

But while voters will almost certainly decide how to replace Prop. 123, they won’t ever get a chance to weigh in on Hobbs’ proposal.

What is Prop. 123? 

Passed nearly a decade ago, Prop. 123 injects about $300 million every year into the K-12 school system, but it’s set to expire in 2025. The money for that boost is sourced from revenues generated by the state land trust, a portfolio of land given to Arizona by the federal government to benefit public entities, like schools. 

In 2016, lawmakers sent voters Prop. 123 to settle a lawsuit against the state that accused it of failing to follow a different voter-approved measure requiring K-12 funding increases every year to, at a minimum, keep pace with inflation. After voters narrowly greenlit the proposition, the slice of revenues sent to Arizona public schools from the land trust increased from 2.5% to 6.9%. 

With the funding stream’s expiration on the horizon, both Hobbs and Republican lawmakers are aiming to overhaul and extend it — though at different rates and with slightly different purposes. Republican lawmakers want to keep the funding rate at 6.9% but allocate it strictly for teacher pay raises. Hobbs’ proposal, meanwhile, calls for an increased funding rate of 8.9% for the next decade and dividing up the money between general school funding, educational support staff, school safety improvements and teachers — who would be allocated the biggest share. 

Lawmakers and educators: don’t leave out critical staff

Republican lawmakers are unwilling to include support personnel, like custodians, bus drivers and librarians, in their funding plan. The problem with increasing who can benefit, Rep. Matt Gress told the Arizona Mirror in a Jan. 23 interview, is that it leads to smaller returns for teachers. 

Under the Republican proposal, which is aiming to secure $4,000 pay raises for full-time teachers across the state, voters would have to approve two ballot initiatives: one that preserves the current land trust withdrawal rate of 6.9% until 2035, and another that outlines which teachers can receive that money.  

“If you put too many personnel in the land trust proposal, then the raises are not going to be the kind of meaningful progress we need to address the biggest workforce challenge in the state,” the Phoenix Republican said. “And that is having a classroom teacher at the head of every classroom.” 

But Democrats and public education advocates disagree, saying that support staff are a critically important part of the day-to-day functions of schools, and leaving them out of pay increases is a mistake. 

Rep. Judy Schwiebert, D-Phoenix, who is both a former teacher and former librarian, compared support personnel to the tires on a car and likened teachers to the engine.

“As hard as that engine works, it’s going to burn itself out without those wheels,” she said. “Teachers know that it’s a package deal. All educators are vital to student success.”

Savannah Galaviz-Tranguch, who currently works as an elementary school librarian, added that she helps bridge learning gaps in her role, acting as an extra resource for both teachers and students. But, she said, her compensation is abysmal, and raising the wages for all support personnel is imperative to ensure that students across the state can benefit from fully staffed schools. 

“For educational support professionals, the situation is dire. We make an average of $29,000 a year. That is not a living wage for one person, and not enough to raise a family,” she said. 

What’s the impact on the state?

Because the funding is sourced from the state land trust, it won’t raise taxes. But state officials disagree on how much money is fiscally responsible to withdraw. Republicans advocate for keeping the withdrawal rate the same as it’s been since voters OK’d Prop. 123 in 2016 and Hobbs is pushing for a more than 2% increase. 

State Treasurer Kimberly Yee, who oversees the land trust, is critical of both plans, advocating instead for a 4% to 5% funding rate, warning that the trust is estimated to make less than a 6% return in the next 10 years. 

But both Hobbs and lawmakers say Yee is being far too cautious, pointing to the trust’s strong fiscal health in the past decade. When Prop. 123 was first referred to voters in 2016, Hobbs said, it was made with the projection that the trust would grow to about $6.2 billion in the next decade. Instead, the trust is currently at a whopping $7.8 billion. And the Governor’s Office is counting on that growth to continue for the next decade to offset the increased K-12 funding. 

Sen. Christine Marsh, D-Phoenix, echoed that assumption on Monday and added that the choice is between letting the revenue in the trust go stale or mobilizing it to benefit Arizona schools. 

“Our choice is between letting that number sit in a bank account and get bigger or setting Arizona’s children up for success,” she said. 

Which proposal is likely to succeed? 

Because increasing the amount of revenue from the state land trust given to schools requires amending the Arizona Constitution, voters have the final say. And while Hobbs is the final stop for most legislative proposals, a legislatively referred ballot initiative doesn’t need her approval — meaning that she can be entirely cut out of the process.

Senate President Petersen acknowledged that in an emailed statement, saying that lawmakers have the ultimate authority over what voters will see in November. 

“While we appreciate her input on the matter as a referral to the ballot, the issue is solely at the discretion of the legislature, subject to voter approval,” the Gilbert Republican said.

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