/ Modified jun 5, 2015 9:17 a.m.

Ducey: Take $1.8B From State Land Trust for Education

Amid ongoing criticism of budget cuts, governor wants voters to OK spending over 5 years.

Ducey in Tucson spotlight 1-13-15 Gov. Doug Ducey, Jan. 13, 2015.
Steve Riggs, AZPM

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Gov. Doug Ducey proposed Thursday taking $1.8 billion from the State Land Trust Fund for K-12 education in the next five years.

The plan would require approval of legislators and state voters, and it comes amid ongoing criticism of the Republican governor and Republican-controlled Legislature for their cuts to education in the budget for next fiscal year.

The State Land Trust Fund was set up in 1912 at statehood to help fund education and other programs. It included 10 million acres deeded by the federal government to the state, with sale or lease of the land providing the trust's proceeds.

The trust now has 9.2 million acres, and the current voter-approved formula allows a payout of 2.5 percent of the fund balance annually. Last year, that payout was about $80 million, divided equally among school districts based on enrollment. That comes to about $72 for each of Arizona’s 1.1 million public school students.

Ducey said Thursday that the trust has money to spare.

“We have $5 billion in the bank and up to $70 billion in potential future value,” he said. “We are getting less than $100 million a year for it. We can do better.”

The $1.8 billion over five years would increase the annual per-student payout from the trust to roughly $323 over and above other state educational funding.

Voters approved an increase in education withdrawals from the State Land Trust Fund in 2012. Ducey helped push that initiative as state treasurer and said he will ask the Legislature to put his latest proposal on the November 2016 general election ballot. That would mean extra money from the fgund would not be available until 2017.

Democrats called the governor’s plan a short-term fix, and educators said they were cautiously optimistic. Some worried about depletion of the fund.

State Superintendent of Public Instruction Diane Douglas said in a statement that she "looks forward to seeing the details of the proposal." Douglas has criticized the governor and the Legislature for their education funding decisions and has clashed with Ducey on policy and personnel issues.

Ducey's plan comes in the wake of Tuesday's release by the U.S. Census Bureau of its annual report on education funding, showing Arizona's contribution to K-12 schools at $7,208 per student in 2012-13, third lowest in the nation. The report said average spending per student across the country was $10,700.

Ducey has said he is working to shift money from administration to classrooms in public schools and wants more money for education. If that means raising taxes, the governor has said he is opposed because that would stifle economic growth.

Arizona's economy has grown slower than the national average since the recession, despite the state having the sixth-lowest taxes in the country in 2014, according to Kiplinger’s Personal Finance website.

More state tax breaks for businesses are in the pipeline for next year. In his gubernatorial campaign last year, Ducey pledged to eliminate the state's individual and corporate income taxes, but he has backed away from that pledge since taking office in January.

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