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Ariz. Gov. Betting Big On Tax Plan for Schools

By Darcia Harris Bowman — October 11, 2000 8 min read

Gov. Jane Dee Hull is exhibiting interesting behavior for a lame duck.

First, this fiscal conservative proposed a sales- tax increase early last spring to improve Arizona’s dismal record on education spending.

Then, mere months before the state primaries, she fought bitterly with conservative members of her own Republican Party to force her $445 million plan through the Statehouse and onto the November ballot.

Now the 65-year-old Missouri native and former schoolteacher is stumping her longtime adopted state, using nearly every speaking engagement on her schedule to drum up public support for her proposal, Proposition 301.

Some critics have questioned the governor’s methods and motives in the campaign. Others in this sprawling capital city say she is fighting the most important battle of her career, and suggest its outcome will determine her prospects on the national stage, as well as her legacy in a local political landscape forged by the late U.S. Sen. Barry M. Goldwater.

The governor insists it is the future of her state that is at stake.

“I see this as a do-or-die issue for Arizona,” Ms. Hull said during a recent interview here. “Where we will be if [Proposition 301] doesn’t pass is frightening to look at. I think we’ll have a huge teacher shortage. I think we’ll probably see our dropout rate get worse, not better. And you won’t see this kind of money for education for at least another 10 years.”

Education has been a main focus of Gov. Hull’s administration since she unexpectedly took the state’s top office three years ago. As the Arizona secretary of state, she succeeded fellow Republican Fife Symington, who was forced to resign in September 1997 following a conviction on fraud charges.

She spent the final year of her predecessor’s term laboring with legislators on a court-ordered plan to retool the way the state financed school facilities. Elected in her own right in November 1998, Ms. Hull vowed to do more for schools before constitutionally mandated term limits end her governorship in January 2003.

“We have improved, or are improving, the quality of our school buildings,” she said in her January 1999 State of the State Address. “Now, we must improve the quality of what happens inside those buildings.”

In some areas, by some standards, the Grand Canyon State is a leader in education.

The Manhattan Institute for Policy Research, a New York City-based think tank, recently ranked Arizona first in the nation for “educational freedom,” because it offers more charter schools than any other state, a tax credit for donations to scholarship programs providing private school tuition aid, and an unrestricted interdistrict-choice program in public schools. (“New Index Rates Some States More Free Than Others,” Sept. 27, 2000.)

But when it comes to paying for classroom instruction, Arizona falls near the bottom of the heap.

In 1997, the state spent $4,334 on each public school student, well under the national average of $5,873, according to the latest figures from the U.S. Census Bureau. Only Mississippi and Utah posted lower per-pupil spending figures that year.

“Essentially, we had a 10-year period where taxes were being cut and schools were being funded with no [adjustment for] inflation, period,” Gov. Hull said, referring to state tax reductions in the 1990s. “Schools were taking money from wherever they could find it. I felt strongly that we had reached a crisis in education.”

Scraping Bottom

Arizona’s record on teacher salaries is also unimpressive; it ranked 34th among the states in average salary for public school teachers— trailing neighbors Colorado, Nevada, and California—according to 1998-99 data from the National Education Association. And last, but far from least, is the court order forcing the state to bring hundreds of neglected school buildings up to minimum standards. The estimated price tag: more than $1 billion.

Ms. Hull’s proposed solution to this myriad of financial challenges is an increase of six-tenths of 1 percent in the state’s 5 percent sales tax, a rate that would remain in effect for 20 years.

The first $70 million dollars raised through the tax hike would be earmarked for interest payments on $800 million in general-revenue bonds the state would issue to raise money for school building improvements. Of the remainder, 15 percent would go to colleges and universities and 85 percent to K-12 education.

“It’s very tough for conservatives to talk about raising taxes, and I don’t believe in just throwing money at a problem,” the governor told a luncheon audience at an education conference here last month. “But as a conservative Republican, I believed it had come time for Arizona to look back over the last 10 years to see what we’ve done, and ahead 20 years at what we should do.”

Getting Comfortable

For Lisa Graham Keegan, Arizona’s elected schools superintendent for the past five years, the low funding levels for education are a national embarrassment. So Ms. Keegan, a Republican who is quite comfortable with the conservative label herself, has been Gov. Hull’s constant partner in championing an increase for schools.

“I think the Republican Party has to get real comfortable taking a lead on education,” the 41-year-old education chief said recently. “My answer to these legislators [who oppose a tax increase] is, ‘You are absolutely free to go back in and cut 0.6 percent from whatever program you want—transportation, health—I don’t care, but I am tired of being at the back of this bus.’”

The conservative leaders of the Republican-controlled legislature flatly opposed a tax increase. Led by Speaker of the House Jeff Groscost, they fought relentlessly against the plan in a lengthy special session last summer.

“For the first time, I saw a consensus in the legislature for putting more money into education,” Mr. Groscost said. “Our plan would have done that without a tax increase, but I’m afraid we’ve squandered that consensus by attaching it to the largest tax increase in Arizona’s history and forcing it to be screened by voters.”

Despite the fierce opposition, the politician nicknamed the “Iron Lady” during her leadership days in the Arizona House enjoyed a decisive win. (“Arizona To Hold Referendum On Tax Increase for Schools,” July 12, 2000.)

Political Fallout

The bile from that June session spilled over into the Republican primaries this fall, when many of the governor’s foes in the legislature found themselves facing challenges from more moderate GOP candidates running with her backing. Gov. Hull’s picks won in some of those races, an outcome she attributes to strong public support for her education plan.

But Mr. Groscost is on a fast track to the state Senate after handily winning his primary contest last month. And many of his conservative colleagues also survived, leaving some observers to suggest the governor’s hardball tactics paved the way for even greater adversity in the last two years of her final term.

“That special session was really very brutal, and I’m not sure anyone came out smelling good,” said Mary Gifford, the director of the Center for Market-Based Education at the Goldwater Institute, a conservative think tank here. “The governor in particular expended a lot of political capital to get what she needed.”

Speaker Groscost said there was no surprise in Ms. Hull’s tactics. “She was generally willing to throw over the conservative members of her party to get the votes she needed,” he said, “and that’s why she was thrown out as speaker in the House six years ago.”

Those on the governor’s team offer a different take on her abilities in the game of politics.

“She would have been a great chess player,” said Superintendent Keegan, who served in the House when Ms. Hull was the speaker. “Even though you don’t realize it, she knows where all the pieces are, and she thinks about where she needs to move next.”

To Be Continued?

Gov. Hull is upbeat these days as she barnstorms the state.

Polls have consistently shown high levels of public support for her ballot measure, billed as the “Education 2000" plan. Newspaper editorials are favorable. The business and education communities are both on board. And the forces that typically surface to defeat tax increases have so far remained silent.

“If this fails, I have not read Arizona right,” Ms. Hull said.

Most political insiders here expect voters to approve Proposition 301 on Nov. 7. But a victory on the referendum may ensure only the financing mechanism of the governor’s plan.

In Arizona, the legislature needs a supermajority to change any aspect of a measure the public votes on directly. In the case of Proposition 301, voters essentially only decide whether to support a tax increase. Other key provisions could be up for grabs because the bill containing the meat of the governor’s plan doesn’t become law until next spring.

A legislative session will convene between now and then, and some groups are gunning for changes.

The Arizona School Boards Association is zeroing in on Ms. Keegan’s Student Accountability Information System, which would allow the state to track financial and educational data about students. The association’s executive director, Panfilo Contreras, said his group also opposes a proposed end run around districts to give school principals direct control of a portion of the new funding.

And Democrats, who were instrumental in the governor’s legislative victory, are drafting possible amendments as well. “I will support Proposition 301 unconditionally, but come next session, we’ll be looking to fix some things,” Democratic Sen. Joe Eddie Lopez said in an interview last month.

Gov. Hull says she isn’t worried. Her plan will prevail, she argues, because it is the right thing to do.

“Arizona has no chance of being a new-economy leader if we are not a leader in education at all levels, most importantly, in K-12 education,” she said in a speech at a rural economic conference last month in Sedona. “Proposition 301 is the answer. It will help breathe new life into our education system from top to bottom.”

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