Tax hike support grows

April 18, 2010

Arizona Daily Sun

Hillary Davis

Flagstaff Unified School District had champions when it made a case for a budget override -- a tax increase -- this past winter.

A community group was formed to campaign on behalf of the district and its students. Flagstaff 40, a coalition of local business leaders, also backed the override.

Now both are working in support of a statewide temporary sales tax set to be decided in May by passing out signs and informational brochures and partnering with other organizations.

It's not just public school systems like FUSD that have a deep vested interest in voters approving Proposition 100, which adds one cent on the dollar on taxable purchases. Public universities and colleges, state police, and health and social services, all funded by the state, would draw from an estimated $3 billion in collections over the course of the tax's three-year life. Two-thirds of revenues will go to the K-12 and higher education systems, with the balance split among public safety and other health and human services. It would expire in May 2013.

"Business people do not like taxes, but if there was a tax that needs to be passed, we believe that Prop 100 is that tax," said J.R. Murray, general manager of Arizona Snowbowl and chairman of the Flagstaff 40 board of directors.

FUSD expects to lose about $8 million if the tax doesn't pass, essentially canceling out the budget override recently passed by local voters. Even if it passes, the district expects $4 million in cuts. Northern Arizona University fears a $16 million cut next year, compounded by federal stimulus funds running out at the end of the next fiscal year.

Cuts to the state prison system could send some offenders back to Coconino County jails, and the county government could be on the hook for judge salaries.

Early ballots are due to arrive in mailboxes this week. Monday is the last day to register to vote in this election.

KEEPING MOMENTUM

For Sarah Ells, the need for sales tax revenue is clear.

She was an active member of Citizens for Schools Success, which formed on behalf of FUSD's budget override bid this spring, and was heavily involved in campaigning. Her children attend Sechrist Elementary.

Voters approved that tax in March. While the community group toasted its success on Election Night, it also committed to staying active for Prop 100.

"The situation here would have been much worse without that override money," Ells said. "But as the governor's proposed budget cuts deeper into school budgets, this sales tax increase will play just as important a role in protecting quality education here."

Citizens for Schools Success passes along information and materials prepared by the statewide Yes on 100 campaign. The group's leaders see their role now as keeping organizational momentum going.

"Not only did people want to help, but they knew exactly how to help," Ells said. "So while the bad news is that the state of the state will continue to throw challenges our way, the good news is that Flagstaff residents have the ability to handle these challenges when we organize."

A locally based organizational consultant employed by the Arizona Education Association makes regular appearances at FUSD school board meetings to plug the tax. The state teachers' union has endorsed the tax.

FUSD administrators can't say much, bound by laws about campaigning for elections.

But they are waiting for the sales tax vote results before deciding how permanent last week's conditional layoff notices will become and how many extracurricular and academic programs will remain in schools. They are still refining priority lists of all non-mandated expenditures -- from principals and nurses to sports and band -- with various advisory groups.

Interim superintendent Barbara Hickman has floated the idea that the state could shorten the school year by a week.

Charter schools, which are also public and state-funded, could also be hit. Projections statewide total $30 million.

FURLOUGHS COULD RETURN

Last week, NAU students waved signs and rallied outside City Hall for Prop 100. The tax is also supported at the highest administrative level.

"Taxation is not a dirty word," University President John Haeger said at a campus forum last month, where he talked university budget.

If the tax passes and state appropriations stay about the same next year, then NAU more or less stays status quo. That's the best-case scenario. But he's not sure, and said state funding isn't likely to return to past levels.

The worst-case scenario has Proposition 100 failing, state appropriations dropping by as much as 10 percent and limited enrollment growth (and thus tuition collections). By 2012, cumulative potential losses could cut $27 million from NAU's base budget compared to this year.

That could bring back the furloughs that were forced last year but mitigated this year through a bump in tuition collections.

Haeger must present contingency spending scenarios to the Arizona Board of Regents in early May.

General short-term strategies include close review of every vacancy for "critical" need; shifting more locally generated funds to university use; reviewing academic and non-academic programs for efficiency; using technology "to improve services and lessen need for people;" and possible reductions in financial aid.

"It's way beyond just an ideological argument," Haeger said. "There are going to be real, substantive changes."

BUSINESS WANTS REAL FIX

Murray said his Flagstaff 40 will collect donations for the broader pro-Prop 100 campaign and might partner with other supportive organizations in town

He said the tax isn't a fix-all, but it is needed -- a transfusion, although the Legislature needs to figure out how to stop hemorrhaging from happening in the first place. That's what the Flagstaff 40 wants to hold the state to going forward, he said.

"We can't rely on the huge swings both up and down," Murray said. "We can't rely on home construction. We can't rely on people moving to Arizona the way they have in the last 20 years."

Flagstaff 40 endorsed Prop. 100 even before the Legislature decided to make it a referendum. Members wrestled with the support and didn't all agree. Snowbowl hasn't decided to do so yet, but if they did pass on the tax to skiers, it would add about 50 cents to a $49 lift ticket.

"But we studied it long and hard," Murray said. "We had presentations made to us by economists and also by some other analysts that study the state budget, and we realized that, as much as we don't like to favor raising taxes, we know that it is needed."

Murray said his organization is especially concerned with education because it's a piece of economic development (the group also supported the last FUSD override). Flagstaff 40 and its sister business leadership organizations in the Phoenix and Tucson areas also contribute to Science Foundation Arizona, which could lose funding without the tax increase. They worry about Flagstaff hosting convicts that would otherwise be at a state prison, but are moved to the county jail if they have less than a year to serve.

And they want an economically healthy state to draw more business.

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