April 24, 2018
Getting Serious about K-12 Educational Goals Costs $2 Billion Annually
Dave Wells, Ph.D.
Research Director, Grand Canyon Institute
In two short months the #REDforED movement has already successfully pressured the legislature to pass a 20-year extension of the 0.6 percent education sales tax and moved Governor Doug Ducey from a 1 percent pay raise for teachers to a three-year commitment to raise salaries by about 20 percent, assuming revenues stay flush.
#REDforED leaders have been skeptical that those funds are sufficiently stable as they are largely premised on continued robust economic growth. Teacher pay raises are only one of the demands put forward by Arizona Educators United, the organization leading the #REDforED movement. Other demands include competitive pay for education support staff (counselors, speech therapists, bus drivers, cafeteria workers, etc.), the restoration of education funding to 2008 levels, and suspending tax cuts until the state’s per-pupil funding reaches the national average, which would require a nearly $3,000 per-pupil increase.
However, if the debate solely focuses on education-related expenditures, we lose track of our ultimate goal, improving Arizona’s educational performance. How much funding does Arizona need to meet its educational goals?
In September of 2017 Governor Ducey helped lead a coalition of community, business, philanthropic and education organizations in setting a goal that 60 percent of Arizona adults aged 25-64 attain a postsecondary degree or certificate by the year 2030, up from the current 42 percent. Reaching that goal is imperative, since the Governor and business leaders agree that within 5 years, nearly 70 percent of jobs will require education beyond high school. A key part of attaining that goal is “improving the K-12 pipeline.” The goals identified there were “increasing pre-kindergarten enrollment, third-grade reading levels, eight-grade math scores, and high-school graduation rates.”
For instance, Arizona’s high school graduation rate of 78 percent is in the bottom third of the country. California and Texas have similar portions of non-Hispanic white and Hispanic students yet do a better job graduating them. In recent years those states have improved, while Arizona has been stagnant.
Two coalition partners—Expect More Arizona and The Center for the Future of Arizona— developed the Arizona Education Progress Meter that outlined a complementary set of goals to be reached by 2030.
Any discussion of educational investments ought to have these goals in mind. To reach these goals the state will need to identify new and dedicated funding sources—as there are not sufficient funds from economic growth or potential fund sweeps or savings from other governmental services to meet these needs. The state can start, however, with the $200 million in anticipated added revenue due to recently enacted federal tax reform including limits to deductions that will boost state revenue as estimated by the state’s department of revenue. Beyond that initial funding, the state will need to consider some combination of boosting the state income tax, examining potential services for taxation, increasing the state-education sales tax, removing some of the recently enacted corporate tax cuts, possibly reinstating a statewide property tax, and reviewing current state tax credits.
SUMMARY OF GCI RECOMMENDATIONS
The Grand Canyon Institute (GCI) has identified the following necessary education investments to reach the 2030 goals as well as correct K-12 capital deficiencies.
- Early Childhood Education—To meet the needs of children under the poverty line so they can be successful in school: $200 million.
- Teacher Salaries—To provide a $10,000 flat raise to Arizona’s teachers: $686 million. This will also improve student achievement by reducing the teacher shortage and enhancing recruitment and retention of teachers. A flat raise achieves these results better than a percentage increase.
- Added Interventions—To elevate student performance to achieve goals for third grade reaching, eighth grade math and high school graduation: $250 million
- Refilling Prior State Investments: $991 million
- Soft Capital and Capital Overlay now known as District Additional Assistance: $352 million
- All-day Kindergarten: $265 million
- New School Construction: $284 million
- Building Renewal Funds: $90 million
Total Annual Investment: $2.1 billion
 These are funds that were cut from 2008 onwards during the Great Recession.