Arizona Post-Prop 123

May 20, 2016

(Guest Post by Matthew Ladner)

Arizona Education Association President Andrew Morrill and I hit NPR to discuss the Arizona school finance landscape post Prop. 123.


Texas Supreme Court Makes Room for School Finance Democracy, will Arizona Democracy (narrowly) embrace reason?

May 18, 2016

(Guest Post by Matthew Ladner)

In 2013, I was discussing a reform agenda (non-choice related) with a seasoned observer and participant in Texas education politics.  I asked this individual whether he was taking steps to advance this reform in the then ongoing legislative session. He responded “no this is a lawsuit year.” My puzzled look must have spurred him to elaborate, whereupon he told me:

Let me explain to you how the districts use the courts to manage the Texas legislature. The districts do everything they can to block reform, and then they file a lawsuit. The lawsuit takes years to wind through the Texas court system, making a ready made excuse against reform.  The lawsuit eventually gets a final ruling and they go back to blocking reform and preparing for the next lawsuit.

This is a lawsuit year.

I recall distinctly “I wish I could have learned this six months ago rather having than my brains beat out in Austin.”

Well in the latest round of this cycle of Texas school finance litigation, the Texas Supreme Court finally decided to stop being the school establishment’s puppet, making some space for the whole “democracy” thing to play out.  Much better late than never imo.

Speaking of school finance lawsuits, out here in AZ the voters took to the polls yesterday to vote on a settlement of such a suit. Back in 2000 Arizona voters enacted an inflation based spending increase for schools. During the first year of the Great Recession the state’s general revenue dived 20% in a single year and lawmakers began digging up money from the couch rather than stop payments to hospitals or close state prisons.  During the boom years lawmakers had increased funding above and beyond inflation, and an arcane dispute broke out over whether than above and beyond spending counted against the voter mandate or not, and the school groups filed a lawsuit.

The Arizona School Boards Association and the Arizona Education Association agreed to settle the suit in part by increasing the payout from the State Land Trust from 2.5% to 6.9% per year for 10 years.  The trust is funded by sales of state land, and has grown to a multi-billion dollar fund not because the state sells much land, but rather because you can fall out of bed and beat such a low payout rate over time. Federal law requires private charities to pay out 5% per year and you may have noticed that most of them are functionally immortal. There is nothing either sacred or even reasonable about a 2.5% payout.

Some have worried about a “fiscal cliff” in 10 years, but this seems to have a fairly simple solution to me- sell a bit more state land (the state retains an estimated $70 billion worth while the Land Trust is worth less than $6 billion) and permanently put the payout at 5% to match private charities a decade hence.  In addition to state land, Arizona has a ton of open space in the form of national parks, federal land, tribal lands, state parks etc. so the great outdoors is not in any danger.

Well the election was held last night and it is a cliffhanger with the Yes holding a slight lead.  The Arizona Republic’s Bob Robb has been at pains to explain the incoherence of the arguments made against the settlement but there is no need to let mere reason get in the way in a year like 2016.  There are different flavors of opposition, but my personal favorite are the armchair strategists who believe they have a keener grasp on the risks of continuing the lawsuit than those who brought the suit. Ah well <<Insert Churchill quote about democracy about here>>

We should have a final result by Friday- stay tuned.