House Committee Advances Prop 123 Extensions – Senate Committee Up Next

On Tuesday, the House Education Committee made progress on Proposition 123, albeit amid concerns expressed by various stakeholders, including lawmakers from both parties, education, tax, and business groups.

For some time, these stakeholders have convened in separate groups to address the implications of Proposition 123’s potential lapse at the fiscal year’s end.

A concrete framework for action has remained elusive until the introduction of three significant amendments by Rep. Matt Gress, R-Scottsdale, along with parallel proposals from Sen. J.D. Mesnard, R-Chandler, set to advance through the Senate shortly.

Although Gress’s proposal gained committee approval, it faced opposition from both Republican and Democratic lawmakers. Concerns were also raised by the Arizona Tax Research Association, which called for broader stakeholder engagement.

The proposal suggests that schools maintain a 6.9% distribution from the state land trust fund. These funds would specifically target a salary increase of around $4,200 for eligible teachers.

Eligibility requires teachers to spend at least 75% of their time in the classroom, or 50% for special education teachers, and to have positive performance evaluations. The Arizona Department of Education would manage this fund, which, like the current law, is set to expire in ten years.

Gress aims to boost teachers’ pay in Arizona, helping the state surpass the national average and addressing a significant shortage of educators, with 3,000 current vacancies and 8,000 teachers eligible to retire within five years.

“I really think it will move the needle,” Gress stated confidently.

However, Republican Rep. Justin Olson expressed strong reservations, citing concerns that the 6.9% draw could lead to fiscal issues down the line. He pointed out the potential challenges in a tighter budget situation, especially considering the implications of Prop. 123’s expiration in 2025.

Olson also highlighted the risk of inequitable funding distribution per teacher, a sentiment echoed by Kevin McCarthy, president of the Arizona Tax Research Association. McCarthy cautioned against another ten-year lapse, suggesting a reduced, permanent draw of 5% from the fund instead.

Concern over equity was a dominant theme, as McCarthy noted that districts with more teachers could see funding disparities. Rep. Nancy Gutierrez, D-Tucson, echoed the call for greater inclusion of education and business representatives in discussions, emphasizing the necessity for diverse input.

Melissa Taylor, executive vice president of Greater Phoenix Leadership, confirmed her organization’s support of Prop. 123 but stressed the importance of transparency regarding the proposal’s implications. More than two dozen educational and business groups signed a letter highlighting Prop. 123’s effectiveness while urging continued collaboration with lawmakers and Gov. Hobbs.

Gress acknowledged that the current bills are not the final version, stating, “Some of the stakeholders don’t like this idea, some really do… There’s still much more work to do.”

The process remains slow and complicated, with multiple stakeholders involved. Discussions have focused on crucial elements including distribution rates, fund allocation, and potential electoral timing.

Gress proposed a special election for Prop. 123 in 2025 but indicated a preference for November 2026 to encourage higher voter turnout. Additionally, he introduced a legislative version of the proposal to keep open lines of communication with the governor’s office.

The House Concurrent Resolutions 2020 and 2047, along with House Bill 2185, passed out of committee, receiving support from six members, while Olson and Gutierrez voted against them. Four Democrats abstained.

The Senate versions of the Prop. 123 initiative are scheduled for discussion in Senate Education on Wednesday.