Talk is already swirling about putting Proposition 301, a 0.6 percent sales tax for education, on the ballot for renewal in 2018. Voters approved the tax increase in 2000, and it is due to expire in 2021. If voters deny a renewal request for Prop 301, it could mean a significant cut in teachers’ pay in Flagstaff and across the state.
Ginger Wischmann, the director of accounting at Flagstaff Unified School District, said the district received $3.857 million in Prop 301 money this year for its Classroom Site Fund. That was nearly 5 percent of the district’s total operating budget for the 2015/2016 school year, which was more than $80 million.
Flagstaff Unified School District Finance Director Scott Walmer said the majority of FUSD’s Prop 301 money goes to teacher salaries. He estimated that about 8 percent of an FUSD teacher’s pay comes from that fund. An 8 percent drop in pay for a new teacher making about $35,000 annually would be about $2,800. If the tax wasn’t renewed, the district would try to find a way to cover some of that drop in pay, he said.
One possible option would be to use some of the money in the district’s reserve fund to make up some of the difference, Wischmann said. The fund is used to cover any shortfalls the district may have during the fiscal year. However, the fund wouldn’t be able to cover the difference for long.
If voters were to approve a renewal of the tax rate, the amount of sales tax returns schools would receive would stay the same at 0.6 percent.
According to information from the U.S. Bureau of Labor Statistics and the U.S. Census Bureau, a Flagstaff family with a median income of $48,680 currently pays about $3,721 in sales taxes every year. A 0.6 percent drop in the sales tax rate would have a family paying about $3,698 annually.
At a more micro level, a $20 check at an area restaurant, minus the tip, currently costs about $21.79 with sales tax. A 0.6 percent drop in the sales tax rate would make a $20 bill about $21.67 with tax.
There is also a push to increase the Prop 301 sales tax to generate more money for education. The Arizona Town Hall recently released a report recommending that the state increase the tax rate to 1 percent. According to Expect More Arizona, increasing the tax from 0.6 percent to 1 percent would collect an additional $400 million a year.
An increase of the sales tax rate by 1 percent would have a Flagstaff family of three paying $3,758 a year in sales taxes.
Walmer said any increase in the tax would have to be channeled through the funding formula set down in Prop 301 with so much going to universities, community colleges, K-12, etc. Any increase in Prop 301 money to FUSD would probably go toward teacher pay, he said.
Arizona Governor Doug Ducey has said that he would support a renewal of the tax, but hasn’t stated whether he would support an increase in the amount being taxed.