How will Hobbs' plan to extend Prop. 123 differ from the Legislature's?
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Republicans in the Arizona Legislature and Gov. Katie Hobbs have both talked about wanting to extend Proposition 123, which raised money for schools and is set to expire in a couple of years.
But perhaps not surprisingly, they have very different ideas for how they'd like to do it. We'll see details of the governor's plan as she's set to unveil legislation seeking to advance her proposal on Monday.
Howie Fischer of Capitol Media Services joins The Show every Monday during the legislative session to talk about what to expect this week at the state Capitol.
Interview highlights
Good morning, Howie.
HOWIE FISCHER: Good morning. Yes, we're all anxiously waiting to see the details of the governor's plan.
Well, so we know some of the broad contours. We know the governor would take more money out of the, state land trust than legislative Republicans would, and we know that it would go to more things, more areas than the legislative Republicans' plan would. Do we have any expectation of what we're going to see today?
FISCHER: Well, I think what we're all hoping to see is the numbers to justify this. From the first day that the governor said that she thinks that they can withdraw 8.9% of the principal in the land trust fund that funds education to, to pay for all of this. Everyone's been saying, OK, how does this work? Is it actuarily sound? State Treasurer Kimberly Lee has already said that anything over about 5.4%, which is even more, less than the Legislature wants to take out, is probably not sound, the lawmakers are looking at the 6.9% continuing, that, that's what's in being taken now.
And that 8.9% you know, you can, I hate to keep using the li the line about lies, damn lies and statistics. But we need to figure out, does this harm the trust? What are the assumptions being put into this? Because, you know, it could be garbage in garbage out. If you're making the assumption that somehow the, the investment in the trust will rise 10% a year, that isn't historically backed. It's been about 7%, 7.5%.
And Kimberly Yee says that they're really counting on the kind of investments we have, which is 60% stocks, 40% bonds to be more than the 5.4%. So we're all waiting to see the details to see whether this is financially feasible or this is just some pie in the sky political promise.
Well, Howie, we should point out and legislative Republicans have, have pointed this out, that the governor is not necessarily needed in this process, because what has to happen is for voters to approve this and the Legislature can send a referral to voters without the governor's involvement. So what I'm curious, what you're hearing about the possibility for negotiations or might the legislative Republicans just push their plan through and ignore the governor altogether?
FISCHER: Oh, I think that lawmakers are willing to talk about things. In other words, should we include support professionals, you know, librarians, custodians, bus drivers, should they be entitled to a certain amount of raises? Should we be including some school security features, things that the governor wants to include? But it's gonna come down to what they think they can get A) out of the Legislature and B) voters to approve.
Now, remember Prop. 123 which is at 6.9%, which was backed by the governor, backed by much of the education community and eventually backed by Democrats after they didn't like it, originally only passed by 51%. So you really need everyone to be behind this because people will generally vote no on anything that they don't understand. So there's a lot of pressure on everybody to come up with something that everyone can say, well, it's not my ideal plan, but it's better than nothing.
