5 fundamental facts about education funding in Arizona

You asked. We're answering.

Hundreds of readers responded via social media to a recent article about whether Arizona voters would support paying higher sales taxes to benefit education. Many posed questions about how school funding works — where the money comes from, where it really goes.

The Arizona Republic answered some of your questions:

Why should I pay more when it will just go to administrative costs and not the classroom?

Voters in 2000 approved Prop. 301, to add a six-tenths of a cent per dollar sales tax to fund education. The tax is set to expire in 2021 and some education, business and political groups have begun discussing whether to extend or increase that tax. The current tax designates how the money can be spent. And any new proposal could keep the same restrictions, or create new ones. Here is how the money was allocated in fiscal 2016:

• Teacher salaries, reducing class sizes, student programs such as reading intervention: $364 million.
• K-12 public schools to fund five additional school days and related salary costs: $86 million.
• Universities to fund technology and research-based initiatives: $69.6 million.
• School improvement revenue bonds to repair school buildings: $64 million.
• Reimbursement to the state for income tax credits for families that earn less than $25,000: $25 million.
• Community colleges and tribal colleges to fund workforce development programs: $18 million.
• K-12 public schools for school safety and character education: $8 million.
• Development of a statewide computerized database to track attendance and performance: $7 million.
• Tutoring for students in failing schools: $1.5 million.

Why can't we just save money by consolidating school districts? 

Arizona has 227 school districts. Every few years, a lawmaker proposes consolidating districts. Occasionally it makes it to the ballot, where voters overwhelmingly reject it.

The last vote was in 2008 when voters were asked to consolidate 76 K-12 districts into 27. It passed in four of those districts, but none ever consolidated. Opponents, including the teacher's union and various parent groups, argued parents would lose local control.

Gov. Doug Ducey has indicated in the past that he may be interested in revisiting this issue.

Why can't we just eliminate corporate tax cuts? 

Ducey and the Republican-led Legislature could do that, but Ducey has vowed to cut taxes every year and neither he nor the Legislature have supported proposals to freeze or reverse corporate tax cuts.

“Together, we will lower taxes this year. Next year. And the year after. And at the same time we will invest in education this year, next year and the year after,” Ducey said in his January 2016 State of the State address. “It doesn’t have to be an either-or. We can be responsible with our budget, invest in the future, and allow the people to keep more of the dollars they earn.”

But some economists disagree.

The past three governors, including Democratic Gov. Janet Napolitano, cut taxes. Arizonans paid 30 percent less in general-fund taxes in 2015 than they did in 1992, according to the analysis by economists Dennis Hoffman and Tom Rex.

The economists estimate Arizona would have more than $4 billion more a year in revenue had it not cut taxes over the past 20 years.

Wasn't Jan Brewer's 2010 tax supposed to pay for education?

Voters in 2010 overwhelmingly approved a one-cent-per-dollar sales tax hike proposed by former Gov. Jan Brewer. The tax generated about $900 million a year, with two-thirds going to education and the rest to health and human services and public safety.

At the same time, Brewer and the Legislature implemented a $538 million corporate tax-cut package. So while more money was coming in, more was also going out.

K-12 got about $675 million per year from the tax hike. But schools also got less from the state's general fund: K-12 general fund education spending dropped from $4.7 billion in fiscal 2008 to $3.9 billion fiscal 2013.

Oh, and the sales tax was temporary. It expired in 2013.

The corporate tax cuts, meanwhile, were permanent.

Where's the lottery money that helps pay for education?

Contrary to popular belief and years of marketing from prior Arizona Lottery administrations, no lottery money is designated directly for K-12 public education in Arizona.

Since the Arizona Lottery's launch on July 1, 1981, its sales revenue has totaled $11 billion, with nearly $3.5 billion of that directed back into state funds and programs. A majority — and growing — share of that money has gone into the general fund where the governor and Legislature can spend it as they choose. That can be for education or not. Once it hits the general fund, it becomes part of a larger pot of money and there's no way to track how it is spent.

Before the recession, the general fund received about $30 million a year. Over the past several years, the annual allocation has topped $100 million.

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