The Grand Canyon Institute (GCI) does not take a position on the Initiative. Its analysis is based on the best available academic research to estimate how Prop. 208’s estimated $810 million in revenue (after state-level administrative costs are deducted) might impact educational and economic outcomes as well as the individuals and businesses affected by the 3.5% surcharge.

Several key findings from the analysis include:

Impact Invest In Ed Funds will have on Public Education

• • Teacher pipeline problem substantially reduced and teacher retention improved due to investments in teacher training programs, mentoring and teacher pay raises.
  • No discernible impact on student achievement due to modest reductions in classroom size that could be achieved with funding generated by the initiative.
• Substantial reduction in teacher pipeline problem likely due to substantial investment in teacher training programs.

As a result of overall teacher investments:

• $630 million to $1.3 billion estimated gain — building annually over the next 13 years as Kindergarteners next year get the full benefit. These gains are for the projected 65% of students who will spend their working lives in Arizona.
• 2% increase in high school graduation rate and 1% college attendance increase over the next 13 years among students expected to stay in Arizona.
• Career and Technical Education investments are likely to result in improvements in student performance, labor market attachment, and future earnings. It is not likely to impact college attendance. Overall impacts are difficult to estimate.

Impact on Taxing High-Income Earners

• An estimated 30,000 Arizona income tax filers/households will be affected, approximately 55% (16,000) of whom receive pass-through business income.  Business income is typically about one-third of their income.
• Less than 100 tax filers/households are likely to move from Arizona since their taxes have increased as a result of Prop. 208’s impact on high-income earners.
• 10,000 jobs might be lost by the 10th year among small businesses impacted by the Initiative’s tax surcharge — this does not take into consideration eventual economic growth impacts the educational investments are estimated to have.

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