Guv Doozey has found a powerful new ally in his campaign to spend more from the state land trust on K-12 thereby avoiding the need for any new revenues: the Center for the Study of Economic Liberty at Arizona State University. Here are snippets from the story by Howard Fischer (Capitol Media Services) appearing in this morning's Daily Star.
The head of a Koch-funded think tank at Arizona State University says it makes more financial sense to spend land trust dollars on current education expenses rather than "hoard" them for future generations.
Money will be worth less in the future, Scott Beaulier said in a report being released today.
Tapping into the trust now — including the principal — will result in a bigger bang for the buck, he said.
The study by Beaulier, executive director of the Center for the Study of Economic Liberty, strongly backs the proposal by Gov. Doug Ducey to boost education funding by withdrawing a lot more from the $5.1 billion trust fund than current levels.
The alternative view, championed by AZ State Treasurer (and now the top spot on Il Duce's political hit list) Jeff DeWit, holds that we need to preserve the land trust principal.
... Beaulier said, keeping withdrawals at current levels will grow the trust to close to $10 billion by 2026.
But state Treasurer Jeff DeWit said that assumes a growth rate of 6.9 percent, something he said is questionable in a fund where 60 percent of the funds are in stocks.
And even if that occurs, DeWit said any growth has to be discounted for inflation which makes future dollars worth less, even as the state has more students it needs to fund.
Basically the argument is about the present vs. future value of money trading off against the present vs. future costs of education.
... Beaulier said there’s another reason to spend now.
"If education in future generations will be more costly, then why not consume more of it today when it is cheaper?" he writes.
Is Beaulier's support for raiding the trust influenced by the funding of his Center by the Koch Foundation?
Beaulier denied that the bent of his work is affected by the source of his center’s funding.
"We’re pretty transparent about who supports us," he said. The organization is led by a $3.5 million gift from the Charles Koch Foundation to set up the think tank.
But, he said, once the money comes in, "we’re basically left to do our thing."
So what's their "thing?"
... the center’s statement of purpose says it is "committed to the study of the role economic liberty and the free enterprise system play in increasing opportunity and improving well-being."
Among Beaulier’s commentaries is one against higher Arizona taxes, saying they "stifle economic growth, kill jobs, and, ultimately, fail to deliver the revenue needed to improve state finances."
And that raises a very interesting question. If AZ spends down the land trust to fund K-12 in the present, where does the money come from to fund the more pricey education in the future? Does anyone believe that in the future folks like Ducey and Beaulier will be willing to raise taxes?
Altogether now: Of. Course. Not.