Ted Simons: Good evening, and welcome to "Arizona Horizon." I'm Ted Simons. The governor's office is proposing a plan to expand internet broadband infrastructure for schools at a cost of $350 million. But the plan is facing opposition from school officials. Joining us now is Chuck Essigs, director of governmental relations for the Arizona Association of School Business Officials. Good to see you again.
Chuck Essigs: Thank you for having me.
Ted Simons: Broadband infrastructure across Arizona. This is a very important stuff, and we've got a ways to go to catch up to other states.
Chuck Essigs: We certainly do. And we've had many years where we haven't done as much as other states. But it impacts our schools, our libraries, it impacts our hospitals, all our individuals.
Ted Simons:: And the importance again to education, because that's your focus. Talk to us about that.
Chuck Essigs: It connects education and students to the world. Part of it, what's being focused on is the testing program. Because the new testing program to the state will be an online testing program. That's only for a small portion of the year. Main thing with the internet, not only in Arizona, but in all other states, they're using it for students to access information globally, to be connected, to do courses online. It just has such great influence on a student's education.
Ted Simons: If we are lagging 15 to 20 years behind and here's a plan now to spend $350 million to get back up to speed, what's the problem?
Chuck Essigs: There is absolutely no problem with the plan. I've not talked to a school person who isn't excited to see this coming to Arizona. But so should everybody else in the state. It would really move our state into the super highway information highway mode. What concerns schools is how it's being funded. They object to the fact they're being singled out and having to pay a portion of the cost themselves, where other portions of the state that will benefit really aren't being assessed the cost. It's something great for the state to do and something good for the state to fund.
Ted Simons: And this is $15 per student for six years, something along those lines?
Chuck Essigs: Yes, that's correct.
Ted Simons: So $15 million maybe a year for six years?
Chuck Essigs: $90 million.
Ted Simons: The total cost of $350 million, schools, sounds like that's about a quarter of the total cost. Correct?
Chuck Essigs: That's correct.
Ted Simons: And the general fund would be a quarter of the cost and private firm pays what?
Chuck Essigs: They say the private companies will pay about half of the cost. Because they'll benefit from it, because they'll be -- They will own the system and than able to market the service.
Ted Simons: So a quarter of the cost you think that's still too much for schools to pay?
Chuck Essigs: Definitely. When you look at -- First thing I just went on the internet today, broadband creates jobs, broadband a small catalyst for small business growth. It will be such an economic boom to Arizona, but I don't know how you assess who benefits the most? Libraries are going to benefit, schools are going to benefit, hospitals are going to benefit, doctors are going to benefits, people's businesses going to benefit. So why single out schools? This is something the state ought to take responsibility for. And people have heard this before, schools have been hit hard over the last five years with budget cuts, and it's one more thing they don't need to pay for.
Ted Simons: I know there's an argument that schools could pay for this through the inflation adjusted funds. Your thoughts on that?
Chuck Essigs: Inflation adjustment funding is to do just that, so schools don't lose ground to inflation, which they’ve lost ground over the past five years. You're right, you could use that to pay for just about anything, but it defeats the purpose, inflation funding is so schools can keep pace win inflation so they don't have to cut programs.
Ted Simons: The idea of the schools, a quarter of the total cost, the fee was go to the state, could you leverage that money to get federal money, you leverage the federal money to get more private development in here. The schools are a part of the community, many cases the focus of a community, a lot of lawmakers I'm hearing saying why not?
Chuck Essigs: Well, when you look at the schools in most communities are the center of the community. When the information gets to the school, it's going to be available to everybody in the community. So why doesn't the state make that -- I was quoted in the paper, when they built the highway to Flagstaff, they didn't charge Camp Verde because Camp Verde was going to benefit. That's the same way we shouldn't charge schools. A lot of schools have done a lot of the work already. And they're going to be charged $15 per student where some district that hasn't done anything -- So there's a fairness issue involved, but also if there's anything the state should do, this is it.
Ted Simons: So if that's not the best idea as far as funding, what is a good idea?
Chuck Essigs: A really good idea is the internet tax that is most likely going to be in place in most states. Right now a lot of the internet sales are not taxed unless the company has a presence in their own state with a warehouse. The federal government is pretty close to changing that, and once they do, Arizona's estimated to get $100-700 million in additional revenue every year. What a better place to use some of that money early on to get this project completed, and once it's done they can use the money for other purposes. Because the reason that people can shop on the internet is because they have access to the internet. And expanding internet will expand that concept.
Ted Simons: And yet there's already talk of maybe cutting Arizona income taxes correspondingly to what those internet taxes might be in order to keep Arizona consumers from facing a tax hike.
Chuck Essigs: I don't think it's a tax hike, because if you would have purchased a television in Arizona at a store, would you have paid the sales tax. You purchase it online you don't pay the sales tax. It's just an equity issue. Other purchases are covered.
Ted Simons: With a quarter of the funding coming from schools, and school officials saying that's too much, what isn't too much? An eighth, a 16th? What?
Chuck Essigs: I think people ought to look at it differently. They ought to look at, this benefits everyone in the state. Rather than trying to figure out who benefits by what percentage, this is something that the state should take on and get it in place and then the districts and homeowners and everybody else can pay the annual fees to use it. But I don't know how you determine who benefits by how much.
Ted Simons: Indeed, last question, senator Don Shooter, who is very much behind this, says it's good for the community, hospitals, government agencies, they can all tap in along with the schools. It's all good. Everyone is contributing, you're just saying too much on the backs of the kids?
Chuck Essigs: He proved my point. Of that group you just listed the only one being assessed a fee is schools. Everybody else is going to benefit and they're not being assessed the $15 per student or anything similar to what schools are. So he's basically proved the point this is something good for a wide variety of people, why not have the state take that responsibility on?
Ted Simons: General fund a quarter of the amount paid as well in this particular plan. More, you think, should come from the state?
Chuck Essigs: Maybe the private sector can make a greater contribution. We also have, if you notice the president has proposed $750 million I think of new money from businesses, the E-rate is going to be doubled. There's going to be a lot of money coming from the federal government and from businesses to help. Maybe that will cover a good portion of the cost?
Ted Simons: Where do you see this headed? Are people talking about this?
Chuck Essigs: There's a lot of discussion, and I just want to repeat, schools are very much in favor of this. It's just the method they chose to fund it that schools don't think is fair.
Ted Simons: All right. Chuck, it's good to see you.
Chuck Essigs: I'm glad to be here. Thank you.