Prop 208: Arizona voters to decide on the 'Invest in Education' initiative

Prop 208: Invest in Ed initiative

As we get closer to election day, there are some big propositions to vote on, including one designed to increase pay for teachers and classroom funding.

PHOENIX - A number of polls have listed 'public education' as the number one concern among voters in our state.

Arizona continues to rank near the bottom when it comes to funding public education.

Supporters believe this proposition can change that, but opponents believe the real victims would be small businesses.

When you're done at the polls or dropping your ballot off, you would have checked yes or no on Prop 208, the initiative to "Invest in Ed," funded by taxing the wealthy.

Opponents of 208 say the tax hike will ultimately hurt small businesses, while supporters say it will breathe financial life into schools across Arizona.

More than two years since 75,000 educators marched to the state capitol, the president of the Arizona Education Association says classrooms remain neglected due to high class sizes and a teacher shortage.

"I've never seen it as bad as it is right now," said Joe Thomas.

Enter Prop 208. If passed, it's estimated to generate $827 million in annual revenue.

50% of funding is for hiring, raises for teachers, and classroom support.
25% would do the same thing, but for school support staff.
12% for a new career training and workforce fund.
10% to fund teacher retainment and mentoring.
3% for the Arizona Teachers Academy, providing tuition and fee waivers for college students who commit to teach in Arizona after graduation.

"We have a tremendous consistent shortage of teachers willing to work in our classrooms and it means our students aren't getting the best from us. That's why we need to invest in our school system," said Thomas. "What we do see is people that will move here to and stay here for a few years get some experience under their belt and then move back to their home state because their home state pays so much better. We have to be able to attract and retain talent out of our own university system but also attract teachers that come from other states like I did and a lot of other teachers that are in Arizona schools and keep them here."

Here's where the investment comes from:

A 3.5% income tax surcharge on taxable income in excess of $250,000 for single filers. And for married couples, more than $500,000.

Remember, the surcharge only counts on every dollar above said thresholds.

Jaime Molera, the former superintendent of public instruction, says 208 hurts the small business owner.

"They don't file corporate taxes, they file individual tax rates. Individual tax returns and those companies, if they're making that kind of money, which a lot of times they reinvest back into their companies, where as corporations will now have a 4.9% tax rate and these small businesses would have an 8% tax rate. That's just fundamentally unfair and it makes zero sense."

An analysis of Prop 208 recently published by Grand Canyon Institute explains how many of Arizona's 100,000 small businesses would be impacted.

Research director Dave Wells says not many.

"Proposition 208 is going to impact about 16,000 or 16% of those businesses and of people that are actually employed there about 360,000 people who currently work for those businesses and we estimate that 5,000 people over the next 10 years would lose their jobs and that would lead to another 5,000 jobs that could be lost."

GCI does find that Arizona's investment in education does lag behind other states and confirms a teacher supply issue.

Voters will decide if the economic effect is a fair trade.