Tuesday, June 9, 2015

Razing Arizona by Robbery: Only in crAZy would it be "an eminently sensible idea" to spend the principal to pay the interest

Robert Robb, conservative columnist at The Republic/azcentral.com, thinks Dice Ducey's education plan is "sound policy, brilliant politics".

Ducey proposes that K-12 funding be augmented by increasing what it gets annually from the $5 billion state land trust. Right now, schools get a 2.5 percent distribution from the trust annually. Ducey wants to increase that to 10 percent for the next five years and 5 percent for the five years after that.

Initially, the administration estimates the proposal will provide roughly $360 million a year in additional funding.

Given current circumstances, this is an eminently sensible idea.

Only if you are a GOPlin (or a GOPlin media stooge).

The $360 M is about what the AZ lege owes public education in inflation-adjusted funding. Here is what AZBlueMeanie at Blog for Arizona noticed in Robb's column.

There is an important loose end. While the amount of additional money Ducey proposes is enough to cover what schools are asking for in their education inflation funding lawsuit, the new money doesn't automatically resolve the lawsuit. Schools are funded from a variety of pots of money. And additional trust fund money goes into a different pot than the pot schools claim they are owed more money from.

Critics also complain that Ducey's proposal doesn't get money to schools quickly enough. The state, however, is sitting on a stash of cash, in the rainy day fund and a growing general fund surplus.

If, somehow, the Ducey proposal could be accepted as settlement of the inflation funding lawsuit, and the state's intermediate overall nut for education finance was fixed rather than uncertain, the Legislature might be willing to spend some of the available cash [in the rainy day fund] as a temporary boost until the larger trust distributions kicked in.

You got that, right? The real plan is to avoid taxes to fund education (as required by AZ's constitution) and to use bleed the state land trust to do it.

Here is more of Robb's fiscal foolery.

Given the sorry condition of state government finances, sitting on $5 billion while Arizona schools go underfunded particularly makes no sense.

Ducey says this additional distribution can be made without reducing the size of trust, given anticipated earnings and future land sales. Frankly, it wouldn't matter if the asset base shrunk. Right now, this money is better put to use in classrooms than in investment funds.

So as the asset base shrinks, the interest on it decreases. To maintain the same level of funding (never mind inflation), additional payments from the asset base are required thus further compounding the problem.

So what is stopping Duce from enacting his Dicey Dream? Robb tells us.

Ducey's proposal itself has to go to the ballot because, for reasons that are incomprehensible, the distribution from the trust is specified in the state Constitution, which can only be changed by public vote.

Incomprehensible? Only to conservatives when they don't like what is in the constitution.

Plain and simple: Il Duce's proposal, and Robb's intellectually flawed defense of it, is Robbery.

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