PHOENIX — Saying there's no need for a tax hike, Gov. Doug Ducey wants to dig deeper into a special trust fund to provide an infusion of cash for public schools.
The proposal would ask voters to quadruple the amount of money schools are allowed to withdraw from the fund each year for five years. That should add another $325 million to $375 million a year to current state funding.
Press aide Daniel Scarpinato said that should initially boost base per-student funding, currently about $3,400, by about $300 a year for that period.
Then, for the second five years, the additional funding from the trust gets cut in half before going back to current levels.
The proposal, which would require voter approval in 2016, is getting a cautious reaction from elements of the education community. And central to that is the question of whether providing this short-term infusion is fiscally sound.
Ducey has been under pressure to increase aid to public schools amid various reports showing state-provided per-student funding is the lowest in the nation. What has kept Arizona from being at the absolute bottom overall is that local taxpayers have had to dig deeper to support their schools despite constitutional requirements for the state to provide a general and uniform school system.
The governor has batted down talk of asking voters for a tax increase. Tapping the trust fund gives him an alternative to present to voters.
"We don't believe it's necessary to raise taxes when we have $5 billion sitting on the sideline,'' Scarpinato said.
That goes to the heart of the issue.
When Arizona became a state in 2012 it was given 10 million acres of federal land to be held in trust for various beneficiaries. More than 90 percent of that is earmarked for public schools.
The trust consists of proceeds from the sale or lease of state lands and minerals.
Scarpinato said the trust grew from $2.7 billion in 2009 to $5.1 billion now. He said that would grow to $7.6 billion over five years.
But he said boosting the figure of how much can be taken out of the trust for five years would still leave it with $5.4 billion at the end of the period, more than now.
That, however, is based on the assumption that the fund will grow by close to 7 percent annually over the 10-year period. By contrast, the governor's office said the growth rate from 2000 through 2015, including boom and recession, was 6.3 percent.
Scarpinato said his boss believes that doing nothing — and just allowing the fund to grow untapped — is not a realistic option given the immediate need for dollars.
Less clear is how the additional funds will play in the ongoing efforts to resolve a lawsuit over whether the state has been shorting schools for years.
The Arizona Supreme Court ruled in 2013 that legislators and then-Gov. Jan Brewer ignored a 2000 voter-approved mandate to adjust state aid for schools each year to account for inflation. That sent the case back to Maricopa County Superior Court Judge Katherine Cooper to figure out exactly how much schools are owed.
Cooper already has ruled that current state aid needs to be immediately increased by more than $300 million. And she is weighing a request by schools for more than $1 billion in aid not given in prior years.
Challengers and attorneys for the Legislature are in closed-door negotiations trying to work that out. Scarpinato said Ducey is not a party to the lawsuit but believes it should be resolved.
The other concern is how the money will be divided.
Scarpinato said it will be according to current formulas which provide a certain amount of money per pupil. But he acknowledged that the governor just formed a special committee to study whether that formula should be adjusted, potentially in a way to reward schools doing better on educating students, leaving less for schools where students already are struggling.
He said, though, that is a separate issue.
"Today is about resources: How do we get new money into the system,'' Scarpinato said.
He acknowledged that the earliest the schools could get new money would be 2017 as the change in tapping the trust fund would require voter approval. But Scarpinato said Ducey is not interested in a special election this year to expedite the process, saying the governor wants time to build public support.