Vote 2012: Prop 204 (Sales Tax Initiative)

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A measure to permanently extend a one-cent state sales tax is on the November ballot. The Quality Education and Jobs initiative would use that money to pay for education and road, rail, transit and other transportation projects. Ann-Eve Pedersen, Chairman of the Quality Education and Jobs initiative, will speak for the initiative. State Treasurer Doug Ducey will talk in opposition to the measure.

Good evening, and welcome to "Arizona Horizon." I'm Ted Simons.
Ted Simons: Our vote 2012 coverage continues tonight with a debate on proposition 204. It's a citizen initiative that looks to make permanent the temporary One-cent state sales tax that voters approved in 2010 to fund public education. That tax is set to expire next year. Here to debate prop 204 is Ann-eve Pedersen, chair of the quality and education jobs committee, the group supporting the initiative, and to speak in opposition to prop 204 is state treasurer Doug Ducey. Good to have you both here. Thanks for joining us. Ann, we'll start with you. Why do we need to make this permanent?
Ann-Eve Pedersen: Prop 204 is something very positive for our state's school children and for parents and families, and also for our state's economy. It just renews the one cent so we won't pay anything more in taxes, but it protects those dollars and ensures that they actually are going to go to help education. K-12, community colleges, universities, GED programs, vocational education programs. Arizona, you may know, led the nation in the depth of cuts to K-12 education over the past five years. That has left our schools without some of the basics they need, and at a time when our schools are going to be adopting a whole set of new reforms. That are really raising the bar for our teachers and students. And we want to ensure that we set them up to succeed. That's what we're going to do by passing prop 204.
Ted Simons: And why not renew this tax?
Doug Ducey: No on proposition 204 campaign is proud to announce the Arizona chamber of commerce, the Phoenix chamber of commerce, and today the Tucson Hispanic chamber of commerce have come out against proposition 204. The reason is, it's a $1 billion permanent sales tax increase, annually and forever. If this passes, Arizona will have the second highest sales tax rate in the country. It will be devastating to our economy, and there are really no real reforms in proposition 204, and no accountability. So for those that care about the education like the opponents of prop 204, these dollars won't get to where they're needed and necessary, to teachers and the classrooms.
Ted Simons: Respond, please.
Ann-Eve Pedersen: It's really important to note that the state's two top CEO organizations, greater Phoenix leadership, and southern Arizona leadership council, strongly back prop 204. These are the CEOs who run the major employers in our state. And they back it because they understand that if we don't invest in education, and our legislature refuses to do that, we are putting a closed for business sign in front of the state of Arizona. We are not able to recruit and keep the good companies we need to remain here. Google tried to set up in downtown Phoenix. They had to close their doors because they could not find enough experienced employees to staff their headquarters.
Ted Simons: The idea of a dead kitted source of funding for public education in Arizona, bad idea?
Doug Ducey: To have funds going to public education is a good idea. Let's make sure there's a chance they can get to where they are needed and make the biggest difference inside the classroom. The fact the chamber has never come out against anything that's been pro-education, yet across the state, a group of business leaders have said, this is not the reform that we need. And the reason is, because there is zero accountability in this bill. It also goes to fund things other than education, and at this time to put a tax rate that high on our state is not the right thing to do, and to put a bill in front of the voters that is said to be for education, yet goes to other interests, and funding bigger bureaucracies that's not good government, that's not right for the state.
Ted Simons: Take this in part, the idea there's not enough accountability, no measurable goals. How do you respond?
Ann-Eve Pedersen: It's just completely untrue. Unfortunately the opposition led by politicians and special interest lobbyists who actually are the major members of some of the chambers, are spreading misinformation. There is lots of accountability and reform. We are for the first time actually going to tie a piece of state funding to performance. If our schools statewide do not improve graduation rates, reduced drop-out rates, improve on ACT and sat scores, a percentage of the funds will not be released and it will go to pay down school debt. The other piece that we put into place is for the first time a true accountability database. So that we can accurately measure the department of education can measure student, teacher, principal, district, and charter school performance.
Doug Ducey: Ted, This is a 17 page single spaced bill to raise your taxes a billion dollars and to pay off special interests. This has 100 million dollars a year annually that goes to contractors. I think that hundred million dollars to could -- could go to the hard working teachers, yet this bill doesn't specify any dollars to go to teachers or classrooms. All those dollars are optional. I encourage our viewers to read this bill, they can go to the no on 204 website to see this is a bill full of pork and paying off special interests.
Ted Simons: Allocations for public transportation and road building, those allocations are included. Why?
Ann-Eve Pedersen: They are. 90% of the funding, 80% is for education, 10% for children's health, and for social services. And there's 10% for transportation. And if you talk to economists, they will tell you that there are a few things you need to invest in if you want to improve the state's overall economic climate. Remember, the name of prop 204 is quality education and jobs. The places her you want to invest your funds are in education and transportation. Where has the state been divesting? I have to address the special interest group piece. Children are not a special interest group. OK, this was conceived by parents, I'm a volunteer parent who is chairing this committee, it was drafted with parents' concerns in mind. It is imperative that money goes to the classrooms. Why do you think we would be behind this if we didn't know that was going to happen?
Doug Ducey: Children are very special. This bill has no interest in them, because it directs no dollars to the classroom. I encourage the viewers to read it for themselves. This is a chart of the special interest carve-outs in the bill and where the dollars flow. They can never change in changing circumstances, Ted. If this is enacted, it will straddle our state with a tax burden which will hurt our economy and we will not be able to change the education formulas to get the dollars to the classrooms so we can truly reform education. It is the special interest bill full of pork.
Ted Simons: Handcuffs appropriations and changing times. Again, that's another concern here. Respond.
Ann-Eve Pedersen: Education funding is never going to go away as a state need and a state obligation. Our state is actually obligated under the constitution to provide for the development and improvement of our public schools. Our legislature has abandoned that duty. Mr. Ducey is just an apologist for them. I have to tell you, please go to our website, quality education and jobs under facts, we have had to set up a special page debunking politician Doug Ducey because of the misinformation that continues to be spread.
Ted Simons: The idea of infrastructure, social safety nets, they are included in here, and we hear there are reasons for them to be included because they provide a better way for education and a better way for jobs. Again, what's wrong with that?
Doug Ducey: First, say what you will about the legislature, but at least they're accountable. They stand before the voters every two years and when they're doing a bad job, they change the legislature and it's changed quite dramatically in the last two years. This bill is permanent, and forever. And what I don't want to see have happen in these changing circumstances is us not to be able to get the dollars where they're needed and necessary, and to the teachers. I do think we agree on a lot more than we disagree on, we want to see the right outcomes for education. I simply don't think proposition 204 which gives money to special interests like $100 million a year to contractors, is going to help teachers in the classroom.
Ann-Eve Pedersen: Let's be clear, can I address the $100 million? This is to go to help the road, rail, and public transit projects. These are projects desperately needed in our state. We can't have pothole city. That is not good for attracting and keeping businesses in the state of Arizona. These are issues that are in the public interest. Just like having a plan for our kids is in the public interest. School boards which are elected, will be making decisions about these dollars. It retains local control, so elected officials will be making critical decisions.
Doug Ducey: And I agree with you, we do need safe roads, we have the funds available, we have gas taxes available. We should focus education bills on education. The legislature's done some good things, they've done things like move on when reading, grading, schools, teacher evaluations, improvement to the curriculum. If we take dollars and couple them to those reforms, which will give us better outcomes in the classroom, and serve our teachers better, we'll have a better K-12 system. This bill doesn't do that.
Ann-Eve Pedersen: The key is attaching dollars to those reforms. That's the piece that you're missing. Because the legislature does a great job of enacting reforms, but they don't attach dollars. The governor this year, remember, we have an $851 million surplus in the state of Arizona. Governor asked for a modest funding increase. What does the legislature do that you're putting all of your trust in? They zeroed her out. They said we're not giving one more dime to the kids of Arizona. And so what happened? There was a compromise reached, that compromise of $89 million doesn't even have money for textbooks. How can we expect our teachers to meet these new higher standards?
Doug Ducey: We've had changing circumstances. The state was in the worst possible financial condition in the country just 2½ years ago. Today we have financial responsibility, we have 1.4 billion dollars in the operating account. $450 million in the reserve account. We've changed the legislature, and we'll have a new legislature coming in January. Let's let them deal with education and funding these reforms. If prop 204 passes, this will handcuff elected leaders and give the power and the spending to unelected and unaccountable bureaucrats. It's a California style idea. California has a $17 billion deficit in this year. We shouldn't be following the direction of Arizona.
Ted Simons: With so much in the way of spending cuts for education, and again, the center for budget policy and priorities, 22% drop in the past five years, number one in the country, number 6 in the country as far as dropping per pupil spending, why should voters trust a legislature that has done that?
Doug Ducey: We had no money. Now we are on sound financial footing, and we need to do what's right for students and teachers. But this idea of where dollars are going, if education needs more money, and I think that's a great argument to have, because I think we do need to get the dollars where they make a difference, and where they change the outcome. Prop 204 would put this $1 billion into the same failed formulas that have underserved our children for the past two decades. The definition of insanity is doing the same thing over and over and thinking you're getting different results.
Ted Simons: Why are there so many mandates, why are there so many requirements as far as where this money has to go, what this money --
Ann-Eve Pedersen: Because we don't trust the legislature. And I have to tell you the number one question we were asked whether we were circulating petitions is how can you assure me that these dollars are going to go where voters want them to go? The reason the legislature doesn't like this and the reason that they've sent Doug Ducey as their apologist is because they want control over how our tax dollars are spent. And they don't want to spend them on education. As a volunteer parent the reason we had to go to this level is because we met with legislators and it was very clear to us, they were hostile to the very idea of public education, they do not want to attach dollars to it. And the lobbyists unfortunately that -- they want to be able to give these dollars to favors to their friends. They don't want them going to our kids.
Doug Ducey: Over 50% of the state spending is on K-12 education. We need to take the dollars that we have and more effectively spend them. If we need more dollars in K-12 education, let's have that discussion, because we have $1.4 billion in the operating account and $450 million in a savings account earning interest. We shouldn't raise taxes on hard-working Arizonans in a hurting economy. It's the wrong thing to do. Proposition 204 raises those taxes and takes tax reform and education reform off the table.
Ann-Eve Pedersen: No. All we're asking is voters to keep the penny for the kids. We're not raising taxes. All we want to do is make sure that our state makes a minimum level of commitment to our kids. With the cuts that happened, all the kindergarten was lost unless parents can pay for it in certain districts. We lost thousands of teachers were laid off. In addition, there are schools operating without money for basic supplies. He's saying let's trust the legislature. Doug, this past session where was the legislature? They said zero, nothing for our kids. The public does not trust them. Parents do not trust them. They have lost our trust.
Doug Ducey: Ann-Eve, I'm a parent as well, I share your concern --
Ann-Eve Pedersen: not in the public school system.
Doug Ducey: -- inside our schools. If this bill cares so much about teachers and school supplies, why does it give $100 million to contractors?
Ann-Eve Pedersen: Look, 80% of the funding, it doesn't give it to the contractors. It gives them to the state department of transportation. Let's be clear about that. In the public interest. 80% of the dollars flowed directly to benefit children.
Ted Simons: Please respond, why are those other things in there? He's repeatedly asked that question.
Ann-Eve Pedersen: Because when you talk -- this is again not just about -- it's about the state's overall business climate. If we want to have a strong economy, what do economists tell us? Invest in education and transportation. And I'm not clear why investing in safe roads, we have the eighth most dangerous rural roads in the nation. Isn't that a problem? And the reason that we're not funding roads is because the legislature has been raiding those funds.
Ted Simons: Please.
Doug Duvey: This is a bill full of pork to pay off special interests that will not help education.
Ann-Eve Pedersen: No.
Doug Ducey: I share Ann-eve's concern about the teachers and outcomes in the classrooms, we're not going to get this through proposition 204. The Tucson Hispanic chamber of commerce would not be against it if it did anything to help inside our classrooms. I hope our viewers will as well vote against it.
Ted Simons: We have to stop right there. Good debate. Good to have you both here.
Ann-Eve Pedersen: Thank you.
Doug Ducey: Thank you.

Ann-Eve Pedersen:Chairman, Quality Education and Jobs Initiative; Doug Ducey:State Treasurer;

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