PHOENIX — Governor Katie Hobbs has announced her Prop 123 renewal plan to "raise pay for every educator and support staff" in Arizona. Her office says the proposition will also improve school safety without raising taxes.
According to the Governor's Office, the plan will expand on the current Prop 123 funding to continue building a quality public education for the over 90% of Arizona children who attend public schools.
The plan extends Prop 123 for 10 years increasing the State Land Trust Permanent Fund distribution to 8.9% with the following dedicated split:
- 2.5% of the distribution will continue general school funding ($257 million projected 10-year average distribution)
- 4.4% of the distribution will raise educator compensation ($347 million projected 10-year average distribution)
- 1.5% of the distribution will increase support staff compensation ($118 million projected 10-year average distribution)
- .5% of the distribution will invest in school capital for safety and security ($39 million projected 10-year average distribution)
"We have a once in a decade opportunity to invest in a public education system that gives every child the opportunity to succeed," said Governor Katie Hobbs. "We can increase compensation for educators and make schools safer for our kids, all without raising taxes on Arizonans. Or we can let billions of dollars accrue in a bank account and do nothing to address our immediate needs. The choice is clear. My plan is a critical step toward ensuring every Arizona child can get a quality and safe public education while addressing our teacher shortage. I look forward to working with Republicans and Democrats in the legislature to send Prop 123 back to the ballot and making these critical investments in public education."
Arizona Treasurer Kimberly Yee released the following statement regarding the governor's plan:
"Governor Hobbs just announced her proposal to increase Prop 123 distributions to 8.9%. The Governor's proposal is dangerous and unsustainable. It would break the bank. Governor Hobbs wants to raid the land trust to cover for her mismanagement of the state budget and overzealous spending plans in an ever-increasing inflationary environment. That is irresponsible and doesn't look out for the long-term vision of Arizona, and this land trust was put in place for our state's future.
As Treasurer, I oversee the management of the Permanent Land Endowment Trust Fund (PLETF) and oppose the Governor's egregious proposal. The purpose of the PLETF is to provide an ongoing revenue stream to the beneficiaries from the proceeds of any of the land entitled to the beneficiaries. That land is to provide an income stream to the beneficiaries and the Endowment was created to replace that revenue stream from the land holdings. Continuing at a 6.9%, or increasing the distribution to 8.9%, will likely dip into corpus and violates the terms of the Enabling Act, under which Arizona became a state.
Wall Street forecasters predict a 5.45% return for the next decade on a 60/40 portfolio like the PLETF. My office will continue to make the financial recommendation of a 4-5% distribution, as it is prudent and consistent with what most Endowments distribute annually. My office has not reported a 10-year return above 8.9% in nearly two years. Over the span of the last 10 years, only 32 months have had a 10-year return over 8.9%. In short, this means an increase to 8.9% is unfeasible based on past performance."
ABC15 spoke with Marisol Garcia who is currently the president of the Arizona Education Association on Tuesday.
"This is a conversation we've been hoping to have for a long time. Retention is a massive issue within our schools and so, to have another plan come out means that all of our emails and calls and discussions are actually coming to the forefront," said Garcia.
Garcia has worked as an 8th-grade social studies teacher for 15 years.
"I think the great thing about the governor's proposal today is that it included all of my coworkers in it, where the previous proposal that had been presented only included teachers," said Garcia.
Ultimately, lawmakers are the ones who would push a Prop 123 renewal plan for voters to decide.
"Let's come together and fix something that's important - overwhelmingly - to parents and voters across the state," said Garcia.