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Proposition 301 – What you need to know

by Expect More Arizona

We can’t repeat this often enough: Arizona needs a long-term solution to increase education funding (Pre-K through postsecondary), with a focus on equity and outcomes for every student. And, we believe a long-term solution must include the renewal and expansion of Proposition 301. Here is a little background and the reason we think Prop 301 is so important.

What’s the backstory?

Proposition 301 was passed by voters in November 2000. Among other things, Prop 301 increased the state sales tax from 5.0% to 5.6%, dedicating the increased revenues to public education. To support low-income families for whom the additional sales tax would be an added burden, Prop 301 also included a tax credit. The extra .6% sales tax and the associated tax credit for low-income households are set to expire at the end of 2021.

How does the funding benefit Arizona’s classrooms and communities?

Prop 301 generates over $640 million dollars annually, with about $500 million going to K-12 education. Here’s a breakdown of where the money went in 2016 (source: Joint Legislative Budget Committee):

  • K-12
    • Classroom Site Fund (see description below): $364M
    • Five (5) additional school days each school year: $86.3M
    • School Facilities Board (school buildings): $64.1M
    • Other programs managed by the Arizona Department of Education: $16.5M
  • State Universities $69.6M
  • Community Colleges $18.2M
  • Tax credit for low-income households $25M

The Classroom Site Fund is distributed to school districts and charter schools on a per-pupil basis. The funds are used for teacher performance pay (40%), teacher base pay (20%), and general maintenance and operations (40%). Class size reduction, dropout prevention, teacher professional development, interventions for struggling students, and tutoring are just some of the ways this funding benefits students.

What should a renewal of Prop 301 look like?

Prop 301 should be renewed and expanded. Losing this funding would have significant negative impacts on education in Arizona. A broad coalition of education, business and community stakeholders is needed to create a proposal for Prop 301’s renewal and expansion, as well as a timeline for the proposal.

Scenarios

While more funding isn’t the only solution to improve student outcomes, every part of the education continuum in Arizona is currently underfunded. Although the cost of adequately funding education far exceeds what Prop 301 is likely able to generate, expanding Prop 301 will help us make progress toward a long-term funding solution. Here’s just one example of how Prop 301 can help close the gap.

Arizona currently ranks last in the nation for median elementary teacher pay (when adjusted for cost of living). To simply reach the national median pay would require an annual investment of $800 million to $1 billion annually.

  • Increasing the Prop 301 sales tax rate from .6% to 1%, would generate an additional $400 million each year.
  • Increasing the Prop 301 sales tax rate from .6% to 1.6%, would generate an additional $1 billion each year.
Example of Impact on Taxpayers

Currently, a $5 meal at a fast food restaurant in Phoenix costs the consumer $5.43.

  • Letting the .6% Prop 301 tax expire would reduce the cost of the meal to $5.40.
  • Increasing the Prop 301 tax rate to 1% would raise the cost of the meal to $5.45.
  • Increasing the Prop 301 tax rate to 1.6% would raise the cost of the meal to $5.48.

(The combined sales tax rate for Phoenix is 8.6%. This is the total of state (5.6%), county (.7%) and city sales tax rates.)

Any solution requires all of us to work together.

We believe school funding – both new and existing – can be used to improve outcomes and close the achievement gap for all Arizona students. With sufficient resources and a focus on excellence, we can help all students read proficiently by the end of 3rd grade, attract and retain great teachers in Arizona, ensure more kids graduate prepared for college and career and much more.

We must all work together to find a sustainable solution to ensure every student receives an excellent education, every step of the way.

Making Progress Together

338 organizations

are partnering with us to make education a top priority in Arizona

80 thousand

supporters of the movement for world-class education in Arizona

96 percent

of Arizonans believe all kids deserve a world-class education

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