1. Proposition 123 Overview

2. Expect More Arizona is…
A statewide nonpartisan organization dedicated to ensuring every Arizona child receives a world-class education, from the early years through college and career
Transition to introducing EMA. Share who EMA is. Share why our work is so important.
Elevate expectations for education
Make it the top priority for everyone – if we are truly going to achieve a world-class system, everyone has a role to play

3. What We Do
We are building an education-first culture and creating opportunities for people to take action by:
Raising Awareness & Support
Spotlighting Excellence
Moving Parents and Voters to Take Action
Fostering Statewide Collaboration
We do our work by raising awareness of critical education issues and creating opportunities for everyone to take action, in their homes, their local communities or statewide.
Raising Awareness of Critical Issues
Building Public Support & Spotlight Excellence
Moving Parents and Voters to Take Action
Fostering Statewide Collaboration to Create Change

4. We’re building a movement of people and organizations who will take action to support education.
75,000+ Individuals
We’re working with our growing network to advocate for key policies and priorities that resonate most with Arizona voters
180+ Partners
30+ Cities/
Towns

5. #1 & school funding Arizona Voters Say… teacher pay education is
Above immigration & the economy
We are making progress
In a Recent Poll, We Found:
Education is #1 issue for Arizona voters, far above immigration and economy
School funding and teacher pay are top two education issues
school funding
&
teacher pay
Are the top two education issues

6. Long-Term Advocacy Priorities
Great Teachers & Principals
Education
Funding
Early Years – College/
Career
Proficiency in Reading by 3rd Grade
Access to High Quality Early Learning
Students Graduate Prepared for College &
Career
With feedback from our partners and our network, we are fighting to achieve these long term priorities…
Attainment of Postsecondary Credentials

7. Arizona’s Current Education Funding Picture

8. Where Funding Stands
Over $3 billion was cut from K-12 during the Great Recession (23% between )
Maricopa and Pima Community Colleges were zeroed out of the state budget in FY16
State funding for public universities dropped – 47% during the recession ( ) – the highest of any state in the nation

9. Impact of Great Recession to K-12 (Since FY09)
Amount
Description
-$144M
Capital outlay revenue limit
-$676.4M
Soft capital
-$239M
District additional assistance
-$218.3M
Elimination of full day Kindergarten
-$70M (only
-$29M to state)
Career ladder phase out
-$183M
Excess utilities
-$1.6B
Building renewal
-$144M Capital outlay revenue limit
-$676.4M Soft capital
-$239M District Additional Assitance
-$218.3M Elimination of full day Kindergarten
-$70M Career ladder phase-out
-$183M Excess utilities
-$1.6B Building renewal

10. Result of Insufficient Resources to K-12
Impact to student learning
School closures
Teacher/instructional support layoffs, low teacher pay
4 day school week
School building conditions deteriorate
Elimination of full-day Kindergarten
Elimination of CTE offerings
Larger class sizes
Stronger reliance on bonds/overrides
Districts considering closing schools – Apache Junction considering closing 2 schools because they have a budget shortfall
Layoffs – Dysart laid off 143 teachers before the school year
Districts are getting rid of full day K, (parents have to pay), the arts and sports programs – sometimes these things are what keep kids in school – now parents will have to pay for them directly and those who cant afford it won’t get the opportunity at all

11. A long-term solution is needed to increase education funding
Support a long-term solution to increase education funding that focuses on equity and excellence in results.

12. Long-Term Funding Solution is Needed
Should focus on equity and excellence
Should also include:
Increasing teacher pay
Prop 301
Supporting universities and community colleges
Restoration of Career & Technical Education funding
Will this solve Arizona’s education funding issues? Proposition 123 is one step towards a long-term, sustainable and dependable funding plan that is needed for Arizona education from the early years through college and career readiness. We believe that other steps in the future should include increasing teacher pay, updating and addressing the renewal of Proposition 301, restoring funding to our universities and community colleges, ensuring all children can read proficiently by the end of 3rd grade and restoring Career and Technical Education funding.

13. Proposition 123 Overview

14. Proposition 123
Voter referendum that proposes to add $3.5B over 10 years to education
Settles the K-12 education inflation funding lawsuit
Will be considered by voters in a special election on May 17
What is Proposition 123? Proposition 123 is a referendum that will ask Arizona voters to increase K-12 school funding. If the Proposition is passed, it will infuse $3.5 billion over 10 years into the K-12 education system.

15. 66% believe Prop 123 is Arizona Voters Believe…
one important step towards solving education funding issues AND should be supported by
additional new funding
Prop 123 as one important step towards solving education funding issues in Arizona and believe it should be supported by additional new funding (66%).

16. Funding Sources
Funding comes from State Land Trust (60%) and from General Fund (40%)
Increases payout of State Land Trust from 2.5% to 6.9%
$50M from general fund for 5 years, $75M for 5 years following
Where will the funding come from? While a state general fund obligation will continue to be substantial, a majority of funding will come from the increased payout from the State Land Trust (from 2.5% to 6.9%) via Proposition Also, an additional $625 million will be appropriated for K-12 education and come from the state’s general fund ($50 million for five years and $75 million for the next five years). The inflation requirement will continue beyond the ten-year funding deal that Prop. 123 provides.

17. What is the State Land Trust?
When Arizona became a state, Congress granted land to the state that are managed for the purpose of generating revenue primarily for K-12 education.
Long-term savings account for Arizona education.
What is the State Land Trust?
When Arizona became a state, Congress granted lands to the state that are managed for the purpose of generating revenue primarily for K-12 education. These lands serve as a long-term savings account for Arizona education. Since statehood, some of these lands have been sold and the proceeds placed into a fund. This fund is then prudently invested in securities and bonds. (The value of the fund is currently estimated at $5.2 billion (growing from $1 billion in 1999) and the average return for the last ten years is 7.3%.) Right now from this fund, 2.5% of total fund is given to K-12 education for classroom expenditures; Proposition 123 proposes to increase that to 6.9% for ten years to assist in paying for inflation adjustments. It is estimated with this additional draw, the value of the permanent fund will be over $6.1 billion in ten years – after Prop. 123 expires.

18. Proposition 123 Overview:
Raises the base level of per pupil funding (from $3, to $3,600)
Guarantees permanent inflation adjustments
Funds begin flowing in June 2016
Local control of funding – no strings attached
Public district and charter schools receive the same funding amounts per pupil

19. Proposition 123 Overview:
Includes measures to protect the general fund from severe economic downturns, while protecting the base level reset
Ends the inflation funding lawsuit
What do the triggers in Prop 123 do?
There are contingencies in the Proposition language to protect the State Land Trust and the general fund should a recession occur. If the contingency plans are ever needed, the Base Level amount will still be reset to account for inflation. The triggers do the following things:
Permit the Proposition 301 inflation factor to be suspended for any fiscal year that Transaction Privilege Tax (TPT) and employment growth are between one and two percent. Mandate that the Proposition 301 inflation factor be suspended if TPT and employment growth are less than one percent. Even if this is in effect, the base level will still be adjusted for inflation. The trigger relieves the requirement to fund it in the year the “recession trigger” is in effect, however it is required to be paid in future years.  This is important because it ensures that schools will not lose ground from the effects of inflation in the future.
Allow the Legislature, beginning in FY 2026, to suspend inflation payments and reduce K-12 funding if K-12 accounts for at least 49 percent of state General Fund spending. Stipulates that if it is above 49 percent, the Legislature will be able to reduce K-12 spending by the amount that it was inflated in the prior year and if it is 50 percent or more of state General Fund spending, then the Legislature may reduce spending by twice the inflation amount from the prior year. It is worth noting that K-12 education currently comprises 43% of general fund spending and the last time it was at 49% or higher was 1983 – when state spending, and state obligations, looked very different than today.

20. Inflation Funding Lawsuit
Voters passed Prop 301 in 2000 that required inflation each year
Starting in 2010, during the recession, the Legislature did not fund inflation
Agreement by parties involved led to a Special Session in October 2015
Legislation increases funding from general fund
Voter referendum = Prop 123
How did Arizona get into this situation?
Arizona voters passed Proposition 301 in 2000 that includes a 0.6 percent sales tax to support education. It also included a measure that requires inflation to be included in the budget each year. However, during the recession, inflation was not funded, which resulted in a lawsuit in After years of litigation, the parties reached a tentative agreement which was presented to legislators during a Special Legislative Session in October As a result of the Special Session, a referendum was passed to give voters the opportunity to choose whether or not to consider increasing the payout from the State Land Trust to assist in paying for inflation funding and to increase additional education funding from the general fund. This referendum is now known as Proposition 123.

21. How will Funds Be Used?
Schools and districts decide how to use the funds
Many are developing two budgets for consideration – one assuming Prop 123 passes and one that does not
Many will use the funds for teacher salaries and benefits
Other uses could include: smaller class sizes, up to date textbooks, technology, full day Kindergarten

22. Why is Proposition 123 Important?
Arizona schools sustained one of the largest per pupil funding cuts during the Great Recession
Will settle the five-year inflation funding lawsuit
Will generate a dedicated funding source for annual inflation adjustments
Why is Proposition 123 an important question for Arizona voters to decide?
The passage of Proposition 123 will provide additional funding to support Arizona schools, which sustained the largest per pupil funding cuts among all states during the Great Recession. It is a first step towards a long-term, sustainable and dependable funding plan for K-12 education. It will settle the 5-year inflation funding lawsuit and will guarantee a significant dedicated funding source for annual inflation adjustments to school funding.

23. What Happens if Prop 123 is unsuccessful?
No additional funding for schools
The inflation funding lawsuit will continue with an uncertain outcome
What happens if Proposition 123 is not passed? If Proposition 123 is not passed, schools will not receive this funding in June and the inflation funding lawsuit will continue, likely for years, with an uncertain outcome.

24. However, Significant Gaps in Funding Remain
Estimated impact keeps Arizona at 48th in per pupil funding (source: ASBA)
The estimated impact of Prop 123 keeps Arizona at 48th in per pupil funding (source: ASBA).
We need a long-term solution for education funding in Arizona – one that includes K-12, the universities, community colleges and early education.

25. We have to work together to ensure we have a long-term solution for Arizona schools.

26. Important Dates
April 18 – last day to register or update registration for the Special Election
April 20 – early voting begins for Special Election
May 12 – mail back ballot for Special Election
May 17 – Special Election Day
Important dates for special election. But remember there nearly all elections impact education and offer an opportunity to Vote 4 Education! Don’t forget about the Primary in August and the General in November. Our elected leaders are making decisions that impact education every day. Not to mention, November ballots can include bond and/or override elections for your local school district.

27. Join Us Join the Movement Vote Sign Up in the Request to Speak system
May 17 – Special Election
2016 Primary and General Election
Sign Up in the Request to Speak system

28. Thank You!