Tax cuts suffocated public schools

Arizona teacher walkout: How three decades of tax cuts suffocated public schools

In 7 charts

By Alvin Chang

Arizona teachers are walking out today in protest, after the governor and state legislature failed to meet their demands.

Republican Gov. Doug Ducey tried to avert the strike by promising a 20 percent raise over the next three years — a promise that some say is tied to overly optimistic growth projections.

But it’s important to understand why Arizona teachers aren’t just happy with a raise, and why their demands include restoring education funding to where it was a decade ago and a promise from the state lawmakers not to implement more tax cuts.

The state has some of the most poorly funded public schools in the nation — and over the past several decades, state lawmakers have systematically divested from public education. This has been the case in each of the states roiled by teacher unrest, from West Virginia to Oklahoma to Kentucky — and now Arizona.

The root of these education cuts started decades ago, when state legislators gave tax cuts to the wealthy and corporations during times of economic prosperity. The hope was that it would spur economic growth — but that growth never came. When the economy turned south, states needed to raise more revenue.

But conservative lawmakers refused to raise taxes; they just cut spending. And because education often takes up the largest portion of state budgets, schools were hit especially hard.

Lather, rinse, repeat.

This trend has been a threat to public education. More affluent families can find their way to a well-funded school — but that leaves everyone else with a second-class education. It’s a betrayal of the ideal of public education.

And in Arizona, this divestment project has been decades in the making.

It’s been nearly 30 years since Arizona’s state legislature approved a tax increase.

The individual tax rates have tumbled downward, and exemptions have increased:

In more recent years, corporate tax cuts have drastically reduced the revenue collected from businesses:

These tax cuts have cost the state about $4 billion in revenue in today’s dollars:

And this tax structure now puts the most financial pressure on the poorest residents.

“It’s an ideological aversion to taxes,” Arizona State business professor Tom Rex told me. “It’s a governor and legislature who have not only said they will never raise taxes but cut taxes every year. And we’ve done that for 25 years.”

Because education is a large portion of the state’s budget, these cuts have hurt schools quite a bit.

Before the recession, Arizona schools were already some of the most poorly funded. But the recession hit the state hard, and state lawmakers have refused to restore education funding to pre-recession levels:

Tax hikes require a two-thirds majority in both chambers of the legislature, and Rex said it’s been so unlikely that the issue hasn’t been broached seriously.

This has led to Arizona teacher salaries either staying static or going down:

Gov. Ducey has proposed a 20 percent raise for teacher compensation by 2020, including a 10 percent boost by next year. Rex said the state could likely pay for that next year with its surplus and by cutting funding elsewhere. But teachers, economists, and even Republicans in the state legislature have said Ducey’s growth projections are overly optimistic, and he doesn’t actually have the money to pay for these raises.