PHOENIX (3TV/CBS 5) -- Proposition 208, the Invest in Education Act, will be on the ballot in Arizona this November. Funding for education is not a new issue in Arizona.
Arizona was already facing a teacher shortage before the pandemic, but since the start of the school year, more than 750 teachers have called it quits.
Thousands of Arizona teachers and their supporters staged protests, walkouts, and a strike over funding for education in 2018, resulting in closures of schools.
After a budget plan was passed in 2019 that included more funding for education, some teachers said it wasn't enough and it wasn't what they had in mind. The $11.9 billion plan laid out included $386 million in cuts to fees and taxes, which is the opposite of what teachers asked for when thousands of them protested 2018.
One activist said this new budget proposal is only going to make students suffer from underfunded classrooms more than they already do.
Now, Proposition 208, the Invest in Education Act, aims to add funding to education by imposing an income tax increase on those in higher tax brackets.
What does a "yes" vote on Prop. 208 mean?
According to the Voter Education Guide from the Arizona Clean Elections Commission, a "yes" vote will impose a 3.5% tax on taxable annual income over $250,000 for single people and married people filing separately or $500,000 for married couples filing jointly. The tax increase would increase funding for education.
What does a "no" vote on Prop. 208 mean?
A "no" vote opposes the ballot initiative, which would keep the highest income tax rate at 4.50% (in 2020) on income above $159,000 (single filing) or $318,000 (joint filing).
How would the proposed tax increase work?
The Voter Education Guide states that anyone whose personal income is between $1 and $250,000 or whose household income is between $1 and $500,000 will NOT see a noticeable tax increase.
The Joint Legislative Budget Committee prepared a fiscal analysis of the proposition. The analysis found those making under $200,000 will not see a tax increase at all. Those who make $200,000 to $499,999 will see an average increase of $120 a year. Those making $5,000,000 or more will see the highest tax increase, which is $353,448.
The 3.5% tax increase imposed on those who make above $500,000 (jointly filing) in personal income will only apply to any income over $500,000. The taxes on the first $500,000 will not change.
Arguments for "yes" on Prop. 208
Proponents of the proposition, including U.S. Reps. Ruben Gallego and Greg Stanton, as well as Superintendent of Public Instruction Kathy Hoffman, say this is funding that schools in Arizona have needed for a long time. Proponents also say that the tax will not affect small businesses. The tax will come from personal income and will not be a business tax.
"Invest in Ed will put $940 million in new funding into Arizona classrooms each year – and it's funding the Legislature can't touch! The revenue will be raised by increasing the state income taxes on the wealthiest 4% in Arizona," said Gallego.
Arguments for "no" on Prop. 208
Opponents of the bill, who include Arizona Treasurer Kimberly Yee and Gov. Doug Ducey, say the tax will actually hurt small business owners who file their personal income tax in that bracket. They say the surcharge is much higher than the top corporate income tax rate, which they say will harm small business job creation and drive these jobs and capital investments to other states.
"Arizona’s K-12 education needs more money. There is little debate about that," Ducey said. "The key is to ensure it is spent in ways that benefit children and teachers, and not bureaucracy and overhead. This ballot measure isn’t the answer. It will do more harm than good to small businesses; will raise less money than promised; and will result in more waste in our education system, not less."
Who sponsored the bill?
According to the Voter Education Guide, the sponsor of the bill is Amber Gould, a high school teacher and state director of the National Education Association.