Horizon, Host: Ted Simons

June 3, 2013


Host: Ted Simons

Sales Tax End/Education


  • A one-cent state sales tax ended at the end of May. Most of the money from the tax went to education. Chuck Essigs, Director of Governmental Relations for the Arizona Association of School Business Officials, will talk about the impact of the end of the sales tax on education.
Guests:
  • Chuck Essigs - Governmental Relations for the Arizona Association of School Business Officals, Director
Category: Business/Economy   |   Keywords: tax, arizona, education, money, state,

View Transcript
Ted Simons: Good evening and welcome to "Arizona Horizon." I’m Ted Simons. The state’s three-year, one-cent sales tax expired at the end of May. Two thirds of the nearly $3 billion raised by the tax went to fund public education, but what happens to that funding now that the tax has gone away? Joining us is Chuck Essigs, director of governmental relations for the Arizona Association of School Business Officials. Good to see you again, thanks for joining us.

Chuck Essigs: Thank you for having me.

Ted Simons: How much did this tax impact education funding?

Chuck Essigs: It's probably what it prevented from happening. Because there were some cuts to schools but without that temporary 1 cent sales tax, there would have been almost another $3 billion that would have been cut out of state government and I don't know what the state would have done. I've been doing this thing for a long time and I've never seen the magnitude of the impact both on the state budget because of the downturn in the economy but even with that 1 cent sales tax the impact on schools.

Ted Simons: So without the tax, teachers lost?

Chuck Essigs: You would have had to see a lot more cuts in programs, more reductions in services. I just don't know in many cases schools would have done.

Ted Simons: What kinds of programs?

Chuck Essigs: Arts, music, all those things that are outside the basic classroom on a day-to-day basis. Some of the special programs would have been reduced. Some of the after-school programs, it's hard to envision what would have had to happen without that additional resource.

Ted Simons: Education leaders, as well, would they have been lost?

Chuck Essigs: They've already lost a lot of them like the Scottsdale school district has cut a number of their administrators. Because even with that sales tax being there, there's probably over the last three years been about a $600,$700 million reduction in school funding. In addition, there would have been a greater cut, had the sales tax not been there.

Ted Simons: $1.8 billion to education sound about right?

Chuck Essigs: That sounds about right. It went into the general fund, I thought Dennis Hoffman did a good job of explaining that and I think he had the same response, without that, it's hard to believe how the state would have survived.

Ted Simons: So with that in mind, taxes now gone. What happens next?

Chuck Essigs: The legislature has put aside a number of dollars into the rainy day fund, into carryover moneys to kind of cushion that blow. They were lucky -- part of their planning was that the economy would have recovered over that period of time. But also people need to remember there's about another $600 million of cuts to school that have not been restored and sometime over the next few years, the state needs to look at that. Capital funding, for example, is only at 40% of what it was 14 or 15 years ago and it wasn't adequate or years ago. I hope people don't just think we're done. They need to now start looking, how do you restore a lot of those cuts?

Ted Simons: Even without the restoration, the improved economy and what you're seeing so far from budget proposals does bode well?

Chuck Essigs: It's a start in the right direction. The state is talking about funding inflation for the first time in many years, which would be $80 million, which is a move in the right direction.

Ted Simons: They're talking about it because the Arizona supreme court is looking at this right now and basically --

Chuck Essigs: Regardless of their motives, it's a good thing.

Ted Simons: Yes but even the --

Chuck Essigs: When it was running -- it was a little bit less than 2% but now that it's running about 1.8%, $80 million. Some of the lesser years, might have been $60,$ 65 million.

Ted Simons: And that's a major factor there.

Chuck Essigs: It's down about five and a half to 6% was lost over that period of time.

Ted Simons: If U.S. census numbers -- apparently, everyone's got their own figures and their own numbers but as far as census numbers are concerned, for education spending, we've got Oklahoma, you've got Idaho, you've got Utah, and then you've got Arizona. What's going on here?

Chuck Essigs: That's not new. It's been that way for many years. Sometimes we've been a little bit lower. I think a better way of looking at it, there's other states that are spending more than what we are. We're very near the bottom. Sometimes, we spend , sometimes . We spend about 70% per pupil of what the national average is and it's hard to compete.

Ted Simons: And I know the critics will say more money does not necessarily mean better results. How do you work that equation when so many of the states that do spend a lot on education do get more results.

Chuck Essigs: Just spending more money doesn't make for better schools but you need resources to provide some of the services. I think a lot of people don't understand how schools operate today. And I think a good analogy is Coca-Cola, for example, has -- I was amazed, 3,500 products across the world that they sell. To be competitive. Schools to be competitive have online programs, they have special services for gifted, special services for disabled students, they have after-school programs, summer school programs. You have to provide services for students, especially for those who are more challenged and have trouble catching up and that takes resources.

Ted Simons: Did the fact that the state went through these tough economic times, that so much was cut, were new ideas forged in these bad times? Was this an opportunity to say hey, we can do more with less, let's give it a try?

Chuck Essigs: I think it was more of an opportunity for districts to stay competitive, they had to do some things, that they really didn't necessarily have extra resources to do. Online learning is a big factor in this program that a lot of students now are taking those programs online and for districts to stay competitive, they had to start up those programs. They're not inexpensive to start up. And districts -- so I would phrase it a little bit differently. It's not well these are tough times so we learn to do things better. These are tough times but there's things we have to do regardless to stay competitive. Students only get one shot at 3rd grade so you have to do whatever they need to do as best you can with whatever resources you have.

Ted Simons: Last question. Will 3rd graders in the future get a better shot?

Chuck Essigs: The one thing the legislature did was provide a little additional money for school districts to help students in 3rd grade as they passed this move on with reading. I think you'll see improvements over that period of time but it's at the cost of other programs that districts may have to stop.

Ted Simons: Thanks for joining us.

Chuck Essigs: I'm glad to be here, thank you.

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