Senior Vice President for State Fiscal Policy
Arizona voters on November 3 could take a giant step toward educational equity that would help every schoolchild in the state, with outsized benefits to kids of color and kids whose families have low incomes.
The Invest in Education Initiative (Proposition 208) would boost the state’s K-12 school funding by $827 million to $940 million every year, through a 3.5 percent income tax surcharge on income over $250,000 for individuals and $500,000 for joint filers. The surcharge would bring the top tax rate to 8 percent on income above those thresholds while keeping other rates the same. In other words, it would fall almost entirely on the highest-income 1 percent of Arizonans, who have benefited from two decades of repeated state tax cuts.
Arizona sorely needs the new dollars for K-12 education. It’s one of two states that made the deepest per-pupil school funding cuts, of 23 percent, from 2008 to 2017. That’s even as many states have started to reverse the deep cuts that they made during and after the Great Recession of a decade ago. Arizona pays its teachers less than almost any other state, resulting in widespread teacher flight that’s hitting rural areas and poor school districts particularly hard.
Proposition 208 is particularly important for low-income children and children of color. By raising new revenue exclusively from high-income households, the measure won’t raise the economic stress on working families (unlike, say, a sales tax increase or an across-the-board wage tax). Nationwide, workers in low-wage industries — who are disproportionately people of color due to longstanding inequities — are three times likelier to have suffered job loss than high-wage workers during the COVID-related recession.
And the measure contains provisions that are particularly well targeted to improving educational outcomes for low-income children. The state would distribute 12 percent of the funds as grants for career and technical programs, giving preference to programs with mainly low-income students. Another 13 percent would go to teacher mentoring and development programs, mostly in low-income schools. The rest would go to school districts based on their student populations, with the money earmarked for hiring and retaining teachers and support personnel.
Over the last decade, studies have documented conclusively that better-funded schools improve educational outcomes for all kids. Adequate school funding helps raise high school completion rates, close achievement gaps, and make the future workforce more productive by boosting student outcomes. States’ Great Recession-era cuts, meanwhile, hurt students’ educations, driving down test scores and college attendance rates.
An adequately funded school system is particularly important for kids from non-affluent families. Wealthy parents can hire private tutors and other supports to compensate for what kids aren’t getting in school. Poorer kids don’t have those resources. Study after study shows that while money matters for all children’s education, it has the biggest benefits — including large increases in adult earnings — for kids in families with low incomes and kids of color, who disproportionately live in districts facing underinvestment.
And states with better-educated workforces tend to have greater productivity and higher per-capita incomes, according to studies across the political spectrum. Nearly 1 in 4 Arizonans are under 18, slightly more than the national average, and most of the state’s schoolchildren live in low-income households. Arizona can ill afford to ignore its future workforce.