Arizona’s Ducey Proposes $1.8bil Funding Boost Without New Taxes


Arizona Governor Doug Ducey has announced a plan to increase funding for public education in the state by $1.8 billion over the next five years, all without raising taxes.

Ducey’s plan would offer schools in the state an extra $300 per student to increase per-pupil funding up from the current $3,400, the lowest in the country.   The governor intends to take the necessary funds from the Permanent Land Endowment Trust fund, giving public schools across the state 2.5-10% each year for the next five years.  The land trust currently holds a total of $5.1 billion, with schools receiving less than $100 million of that last year.

“It’s an incredible asset and the $5.1 billion in money is currently in the bank,” Ducey said.

After the initial five years, schools across the state would receive 5% of the trust fund for another 5 years, and then the funding would come to an end.  Ducey said that doing so would help the fund to remain stable and secure for future use, writes Jesse A. Millard for The Phoenix Business Journal.

“Our public schools say they need more money to do their jobs,” Ducey said, flanked by educators, business leaders and lawmakers. “Under this plan, they will get those resources. Second, it allows Arizonans to decide whether they want more resources in our public schools. I’m confident they will say ‘yes,’ and I’ll be leading the effort … to make the sale.”

When Arizona became a state, it received 9.3 million acres of land to be held in a trust.  The majority of that land was meant to benefit the public school system.  Any funds raised through land sales or leases are invested by the state in an effort to increase the trust fund.  According to Ducey, the trust has an estimated future value of $70 billion to be put toward the public education system.

Critics of the plan argued that it would cause the state to lose its ability to fund public schools through the trust over the long-term, suggesting that a 10% annual withdrawal would cause the principal to drop.  However, according to projections from his budget office, Ducey maintains that the trust will increase to $5.39 billion by fiscal year 2021, as the 10% withdrawal rate will drop to 5% after the first five years.

Meanwhile, educators across the state are applauding the plan, as the additional funds would allow schools to increase academics, hire teachers, bring back arts and music programs, and upgrade out-of-date technology and other classroom materials.

In order to make his plan a reality, the governor needs approval from the state Legislature and then from voters.