Ballot initiative filed to fund education through increased income tax


TED SIMONS: COMING UP NEXT ON "ARIZONA HORIZON," IT'S DAY THREE OF THE
TEACHER'S WALKOUT. WE'LL HAVE THE LATEST. ALSO TONIGHT, AN UPDATE OF THE
VALLEY'S RESIDENTIAL REAL ESTATE MARKET. AND WE'LL TAKE YOU TO AN "ARIZONA'S GOT TALENT" COMPETITION. THOSE STORIES AND MORE, NEXT, ON ARIZONA HORIZON.


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TED SIMONS: GOOD EVENING AND WELCOME TO "ARIZONA HORIZON." I'M TED SIMONS. IT'S DAY THREE OF THE TEACHERS WALKOUT, A DAY THAT SAW CONTINUED PROTESTS AT THE CAPITOL, A VISIT FROM THE PRESIDENT OF THE AMERICAN FEDERATION OF TEACHERS TO SHOW "SUPPORT" FOR THE WORK ACTION AND THE LEGISLATURE DEBATING A BUDGET DEAL WITH THE GOVERNOR THAT CALLS FOR A 20-PERCENT INCREASE IN TEACHER PAY BY 2020. AND, A BALLOT INITIATIVE WAS FILED TODAY TO INCREASE STATE INCOME TAXES TO PAY FOR EDUCATION FUNDING. WE'LL HAVE MORE ON THAT IN JUST A MOMENT. ALSO TODAY, GOVERNOR DOUG DUCEY DENOUNCED A CONTROVERSIAL CONSERVATIVE GROUP THAT APPEARED WITH HIM IN A PHOTO TAKEN LAST WEEKEND AT A REPUBLICAN PARTY DINNER IN MOHAVE COUNTY. IN THAT PHOTO, MEMBERS OF "PATRIOT MOVEMENT ARIZONA" FLASH HAND SIGNALS THAT ARE ALLEGEDLY USED BY THE WHITE SUPREMACIST MOVEMENT. IN AN EMAILED STATEMENT TODAY, THE GOVERNOR SAID, QUOTE, "MY AGREEING TO A PHOTO WITH ANY GROUP OR INDIVIDUAL SHOULD NOT BE SEEN AS AN ENDORSEMENT OF ANYONE'S VIEWS OR ACTIONS--BECAUSE IT'S NOT. BEFORE YESTERDAY, I HAD NEVER HEARD OF THIS GROUP. I ABSOLUTELY DENOUNCE THEIR BEHAVIOR." PATRIOT MOVEMENT ARIZONA MEMBERS HAVE APPEARED AS COUNTER-PROTESTERS AT SEVERAL RECENT EVENTS, INCLUDING LAST MONTH WHEN MEMBERS WORE GUNS AND YELLED AT ATTENDEES OF THE PHOENIX MARCH FOR OUR LIVES RALLY AGAINST GUN VIOLENCE IN SCHOOLS. AS WE MENTIONED EARLIER, A BALLOT INITIATIVE WAS FILED TODAY, THE MEASURE CALLS FOR AN INCREASE TO THE STATE'S INCOME TAX AS A WAY TO FUND EDUCATION. AND HERE WITH MORE IS DAVID LUJAN, DIRECTOR OF THE ARIZONA CENTER FOR ECONOMIC PROGRESS, WHICH IS BEHIND THIS INITIATIVE. GOOD TO HAVE YOU HERE. GOOD TO SEE YOU AGAIN--THANKS FOR JOINING US. NOW WHY AN INCOME TAX AND NOT A SALES TAX. WHAT’S GOING ON HERE?


DAVID LUJAN: WELL I THINK FOR ONE ARIZONANS ARE GETTING A LITTLE FATIGUED BY SALES TAX. AND WE HAVE BEEN CUTTING TAXES EVERY YEAR IN ARIZONA FOR THREE DECADES NOW, AND EVERY TIME WE CUT TAXES THAT PUTS MORE AND MORE RELIANCE ON THE SALES TAX. AND WHEN WE RELY ON THE SALES TAX THAT HITS ARIZONA MIDDLE INCOME AND LOWER INCOME FAMILIES IN A MUCH MORE DRAMATIC FASHION, IN TERMS OF HAVING TO PAY THE HIGHER PORTION OF THEIR INCOME THAN WEALTHY FAMILIES. AND SO WHAT WE ARE DOING IS TRYING TO CREATE A SOLUTION WHERE WE HAVE GUARANTEED SUSTAINABLE REVENUE FOR OUR PUBLIC SCHOOLS BUT DOING IT IN A REASONABLE MANNER, WHICH IS ASKING THOSE WHO CAN AFFORD TO PAY IT THE MOST TO PAY THEIR FAIR SHARE.


TED SIMONS: INCOME TAXES ON THOSE WHO EARN OVER $250,000, FOR INDIVIDUALS WHO MAKE OVER $250,000, A THREE POINT FOUR, SOMETHING LIKE THAT, HIKE. HOUSEHOLDS MAKING OVER $500,000, HAVE THAT SAME THREE POINT FOUR, SIX HIKE. INDIVIDUALS MAKING OVER $500,000 A FOUR AND HALF PERCENT HIKE. WHERE DID THOSE NUMBERS COME FROM? WHY THOSE NUMBER? WHY NOW?


DAVID LUJAN: WELL WE LOOKED AT, GOING BACK TO A TIME WHEN ARIZONA HAD A FAIRER TAX CODE. YOU CAN GO BACK TO THE '80S, OUR TAX CODES WERE SIMILAR IN THAT RANGE. SO WE HAD A PUBLIC EDUCATION SYSTEM BACK THEN THAT WAS NEAR THE NATIONAL AVERAGE WHEN IT COMES TO STATE FUNDING. AND SO RAISING THE TOP RATES, 99 PERCENT OF ARIZONA TAXPAYERS WOULD NOT SEE A TAX INCREASE UNDER THIS. AND IT'S REALLY, WE THINK, CREATING A FAIR SYSTEM. THE ONE THING WE DID NOT WANT TO DO IS RAISE OUR SALES TAX, WHICH IS GOING TO IMPACT THE TEACHERS AND THE SCHOOL EMPLOYEES WHO ARE TRYING TO HELP IN THIS INSTANCE. AND ARIZONA HAS ONE OF THE HIGHEST SALES TAX IN THE NATION, WITH SOME ARIZONA COMMUNITIES IT’S ALREADY OVER TEN PERCENT.


TED SIMONS: HOW MUCH MONEY IS THIS EXPECTED TO RAISE?


DAVID LUJAN: ABOUT $690 MILLION DOLLARS.


TED SIMONS: AND WHERE WOULD IT GO?


DAVID LUJAN: IT WOULD GO INTO THE CLASSROOM SITE FUND, WHICH IS A FUND THAT ALREADY EXISTS, TO MAKE SURE IT’S GETTING INTO THE CLASSROOMS. IT’S GOING TO GO FOR TEACHER SALARIES, SUPPORT STAFF, SCHOOL’S COULD USE IT FOR FULL DAY KINDERGARTEN, BUT GETTING IT TO THE CLASSROOM WHERE IT'S NEEDED MOST.


TED SIMONS: I’VE READ 60 PERCENT TEACHER SALARIES AND THEN 40 PERCENT FOR OPERATIONS, MAINTENANCE, FULL DAY K -- THOSE SORTS OF THINGS. THAT’S PRETTY MUCH ON THE BALL?


DAVID LUJAN: YES, THAT’S HOW IT BREAKS DOWN.


TED SIMONS: IF IT’S 60 PERCENT OF TEACHERS DOES THAT MEAN EVERY TEACHER IN ARIZONA GETS A RAISE, INCLUDING FROM THE ONE ROOM CLASSROOM IN THE RURAL PARTS OF THE TOWN TO THE CLASSROOM WITH 40 KIDS IN ONE ROOM IN URBAN AREAS? HOW IS THAT MONEY GOING TO BE DISTRIBUTED?


DAVID LUJAN: IT'S DISTRIBUTED AS IT IS NOW THROUGH SCHOOL BOARDS. AND WE PUT SOME LANGUAGE IN BECAUSE AS WE LOOKED AT THIS WHAT WE HEARD FROM ARIZONA VOTERS, THEY WANT TO MAKE SURE IT'S GETTING TO TEACHERS, IT’S GETTING IN THE CLASSROOMS. AND SO WE HAVE LANGUAGE IN THERE THAT SAYS SCHOOL BOARDS WILL COME UP WITH A PLAN ON HOW TO GET THERE AND DO IT IN A PUBLIC TRANSPARENT MANNER WITH CONSULTATION FROM TEACHERS SO THAT WE CAN MAKE SURE THAT THAT MONEY IS GETTING TO WHERE IT’S SUPPOSED TO BE.


TED SIMONS: SO THE GOVERNING BOARDS WOULD HAVE TO GET TEACHER INPUT.


DAVID LUJAN: YES, ABSOLUTELY


TED SIMONS: BECAUSE YOU’VE HEARD THE ARGUMENTS BEFORE. I MEAN THE MONEY GOES INTO THE DISTRICTS AND THEN ALL OF A SUDDEN IT SPREADS IN WAYS THAT NO ONE UNDERSTANDS.


DAVID LUJAN: THIS WILL MAKE SURE THAT IT'S GETTING INTO THE CLASSROOM AND THAT TEACHERS HAVE A CONSULTATION IN IT.


TED SIMONS: OKAY, I KNOW A LOT OF LAWMAKERS ARE WORKING RIGHT NOW ON THE GOVERNOR'S PLAN, THE 20 PERCENT INCREASE, THE PLEDGE BY 20 PERCENT HERE BY 2020. THEY ARE SAYING THAT THIS INITIATIVE IS NOT NECESSARY.


DAVID LUJAN: WELL I WOULD DISAGREE. FIRST OF ALL, WHAT THE GOVERNOR HAS PROPOSED IS PROGRESS. I WILL SAY THAT. HE HAS COME FROM 1 PERCENT BACK IN JANUARY TO WANTING TO DO A 10 PERCENT RAISE THIS YEAR. THE PROBLEM IS MANY HAVE RAISED, IS IT'S NOT BACKED BY SUSTAINABLE REVENUE. WE’VE GONE THROUGH THREE DECADES OF A CLASSROOM CRISIS, FUNDING CRISIS. SO WE NEED SUSTAINABLE REVENUE THAT’S GOING TO BE THERE. ARIZONA SCHOOLS TODAY HAVE ONE POINT ONE BILLION DOLLARS LESS THAN
THEY HAD A DECADE AGO. THERE IS SIMPLY NO WAY THAT WE CAN CLOSE THAT GAP JUST RELYING ON ECONOMIC GROWTH. WE NEED TO RAISE NEW REVENUE, AND THAT’S WHY SOMETHING LIKE THIS IS NECESSARY.


TED SIMONS: AND YET THE CRITICS WILL SAY RAISING REVENUE IN THIS FASHION IS CLASS WARFARE. THAT THE WEALTHY ALREADY PAY A LOT IN TAXES. THIS ISN'T FAIR. YOU SAY?


DAVID LUJAN: I WOULD DISAGREE. AND I’LL GIVE YOU ONE EXAMPLE, SO SOMEBODY WHO FOR EXAMPLE WOULD HAVE THEIR TAXES RAISED UNDER THIS, IF YOU WERE TO TAKE SOMEBODY IN ARIZONA WHO MAKES $30,000 A YEAR, THAT PERSON IS STILL GOING TO PAY A HIGHER PORTION OF THEIR INCOME IN TAXES, SALES, PROPERTY AND INCOME TAXES, THAN THE PERSON WHO WOULD HAVE THEIR TAXES RAISED UNDER THIS INSTANCE. THAT’S HOW INEQUITABLE OUR TAX SYSTEM IS. SO THAT'S WHY WE’RE SAYING WHY WOULD WE DO ANOTHER SALES TAX, WHICH IS ONLY GOING TO HURT SMALL BUSINESS, WHICH IS GOING TO HURT THE PEOPLE THAT WE’RE TRYING TO HELP.


TED SIMONS: IT TOOK THE CHAMBER OF COMMERCE ABOUT FOUR NANOSECONDS TO COME OUT AND SAY THIS AIN’T GOING TO CUT IT, WE’RE GOING TO FIGHT.


DAVID LUJAN: THEY MUST HAVE TWEETED BEFORE WE ACTUALLY FILED.


TED SIMONS: IT ALMOST FELT THAT WAY. THEY ARE SAYING THAT THESE TAX BRACKETS, HISTORICALLY, ARE THE MOST VOLATILE IN TERMS OF COLLECTIONS. AND EVEN IF THEY AGREE WITH THE IDEA, DOING IT THIS WAY IS NOT THE BEST WAY TO GET MONEY, SUSTAINABLE MONEY, INTO TEACHER'S HANDS. DO THEY HAVE A POINT?


DAVID LUJAN: WELL YOU KNOW BOTH SALES TAX AND INCOME TAX CAN BE VOLATILE. BUT WE ARE CONFIDENT A SOLID CHUNK OF MONEY, THE MAJOR PORTION OF THIS, IS GOING TO BE THERE. BECAUSE YOU’RE ALWAYS GOING TO HAVE A VOLATILITY TO SOME EXTENT, BUT IT'S USUALLY VERY SMALL. SO YOU’RE GOING TO HAVE THAT SUSTAINABLE REVENUE. I WOULD ALSO SAY, ONE OF THE REASONS YOU HAVE VOLATILITY IS OFTEN TIMES WHEN YOU DON'T HAVE A VERY DIVERSE ECONOMY. SO THE ANSWER TO THAT IS, ONE OF THE ANSWERS IS, TO HAVE A STRONG PUBLIC EDUCATION SYSTEM TO CREATE THAT DIVERSE ECONOMY.


TED SIMONS: THEY'RE GOING TO SAY THOUGH, AND THEY’VE ALREADY SAID, THAT IT WILL CREATE A DRAG ON THE ECONOMY, WHICH WILL LOWER ALL BOATS INCLUDING EDUCATION.


DAVID LUJAN: THAT'S DISAPPOINTING TO HEAR. I WOULD HOPE THAT THEY COULD GET BEHIND US. BECAUSE FOR THE LAST THREE YEARS ALLIANCE BANK DID A SURVEY OF 400 OF THE TOP BUSINESS LEADERS IN ARIZONA. FOR THE LAST THREE YEARS, THAT SURVEY HAS BEEN

CONSISTENT. WHEN THEY ASKED BUSINESS LEADERS WHAT'S THE NUMBER ONE CHALLENGE TO DOING BUSINESS IN ARIZONA, THE RESPONSES HAVE BEEN EDUCATION, EDUCATION, EDUCATION. THE QUALITY OF OUR WORKFORCE, AND NEEDING A STRONG PUBLIC EDUCATION SYSTEM IS WHAT LEADERS REPEATEDLY SAY WE NEED TO MOVE OUR ECONOMY FORWARD. AND THIS DOES THAT. SO THEY SHOULD BE GETTING BEHIND THIS PROPOSAL.


TED SIMONS: WELL I KNOW SOME BUSINESS LEADERS ARE GETTING BEHIND AN IDEA OF A ONE CENT THREE YEAR SALES TAX THAT GETS YOU TO 2020. AND THEN IN 2020 YOU’VE GOT A BALLOT MEASURE. THE CURRENT EDUCATION TAX IS SIX TENTHS OF A CENT OKAY. THE BALLOT MEASURE IN 2020 WOULD BE ONE POINT FIVE CENTS. THAT'S A BIG INCREASE AND IT’S ALSO VOTER PROTECTED IF IT'S ON THE BALLOT. THEY’RE SAYING THREE YEARS SALES TAX INCREASE AND THEN WE GO ONE POINT FIVE WITH THE TAX INCREASE IN 2020. DOES THAT SOUND LIKE A MORE VIABLE WAY TO GO?


DAVID LUJAN: I DON'T THINK SO. FIRST OF ALL, THE FIRST THING YOU SAID, A THREE YEAR TEMPORARY TAX. THAT MEANS IT'S GONNA GO AWAY. WHAT TEACHERS, WHAT CLASSROOMS, NEED--THEY WANT A SUSTAINABLE REVENUE SOURCE THAT’S GONNA TO BE THERE. SO THEN AFTER THREE YEARS YOU’RE GOING TO GO A BALLOT INITIATIVE. WE DON'T KNOW WHAT THE ECONOMY’S GOING TO BE LIKE IN THREE YEARS. WE MIGHT BE IN A RECESSION. IT MIGHT BE MORE DIFFICULT TO PASS A SALES TAX AT THAT TIME. BUT THEN ALSO, THEY’RE GOING TO PUT FORTH A ONE AND A HALF CENT SALES TAX WHEN MANY OF OUR COMMUNITIES ALREADY HAVE A TEN PERCENT SALES TAX. SO YOU’RE ASKING PEOPLE TO RAISE IT EVEN HIGHER. SO I THINK MANY ARIZONANS ARE GOING TO PUSHBACK AGAINST THAT. WE’RE ALREADY SEEING THAT. THAT’S WHY WE WENT--THIS DROUGHT IS BECAUSE SO MANY ARIZONANS ALREADY HAVE SUCH A SALES TAX FATIGUE AND IT’S HURTING OUR MIDDLE AND LOWER-INCOME FAMILIES.


TED SIMONS: WELL LAST QUESTION HERE, THE CRITICS ALSO LOOK AT THIS AND BECAUSE IT'S FOCUSED ON WEALTHY FOLKS IN ARIZONA, THEY’RE SAYING IT’S GOING TO DRAW SOME BIG MONEY IN OPPOSITION. YOU’VE GOT UNTIL JULY 5TH TO GET 150,000 SIGNATURES. A, CAN YOU DO IT, AND B, ARE YOU READY TO FIGHT THAT KIND OF BATTLE?


DAVID LUJAN: YES. WELL WE’RE STARTING TODAY. WE STARTED COLLECTING PETITION SIGNATURES TODAY. PEOPLE CAN GO TO THE WEBSITE, INVEST IN ED AZ DOT COM. AND YOU KNOW WHAT I’VE THINK WE’VE SEEN WITH THE SOS MOVEMENT, AND THE MARCH FOR OUR LIVES AND NOW 75,000 PEOPLE MARCHING ON THE CAPITOL FOR PUBLIC EDUCATION. IT'S A NEW DAY IN ARIZONA. PEOPLE ARE FRUSTRATED. PEOPLE ARE READY TO MOBILIZE AND TAKE ACTION. SO I THINK WE CAN GET IT DONE, AND I THINK WE’LL HAVE THE RESOURCES FOR A VIABLE CAMPAIGN ALL THE WAY THROUGH NOVEMBER.


TED SIMONS: ALL RIGHT. DAVID LUJAN, GOOD TO HAVE YOU HERE. THANKS FOR JOINING US. WE APPRECIATE IT. AND COMING UP LATER IN THE SHOW, 100 YOUNG ARTISTS COMPETE IN A
STATEWIDE TALENT COMPETITION.

A new ballot initiative has been created to increase income taxes on individuals who make over $250,000 as a way to fund public education.

The ballot calls for a little over three percent income tax hike on individuals who make more than a quarter of a million or household that earn $500,000. There will also be a 4.5 percent hike on individuals who make over $500,000.

Why not a sales tax? David Lujan from Arizona Center for Economic Progress says that Arizonans are getting tired of sales taxes. The state already has one of the highest sales tax rates in the nation, with some communities paying over 10 percent. Taxes have been cut every year in Arizona for the last three decades, and Lujan says it wouldn’t be fair to make teachers pay for their own salary increase.

“When we rely on the sales tax, that hits Arizona’s middle income and low income families in much more of a dramatic fashion in terms of having to pay a higher portion of their income than wealthy families,” Lujan says. “What we are doing is trying to create a solution where we have guaranteed, sustainable revenue for public schools but doing it in a reasonable manner, which is asking those who can pay the most to pay their fair share.”

The proposed income tax is expected to raise about $690 million. It would go to a classroom site fund which helps to make sure the school board is distributing the money to where it needs to go. He says that ballot includes clear language that requires 60 percent of the funds to go to teachers and the remainder to be spent in the classroom.

Governor Doug Ducey proposed a plan to give teachers a 20 percent salary increase by the year 2020 using revenue generated by a successful economy. Lujan, along with many others, do not see that as a sustainable plan.

“What the governor has proposed is progress,” Lujan says. “He went from one percent to 10 percent for this year. As many people have raised, it’s not backed by sustainable revenue. We’ve gone through three decades of classroom funding crisis. We need sustainable revenue that’s going to be there.”

$1.1 billion was taken away from public schools in 2008 during the recession, and the money has yet to be returned. Lujan says there is no way that gap can be closed by just relying on economic growth. A new revenue stream must be created if this is going to get anywhere, he says.

The initiative needs 150,000 signatures by July 5 to go on the ballot. For more information on this proposal visit investinedaz.com.

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In this segment:

David Lujan: Arizona Center for Economic Progress

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