Proposition 123 Frequently Asked Questions
- What is Proposition 123? Proposition 123 is a referendum
that will ask Arizona voters to increase K-12 school funding. If the Proposition is passed, it will
infuse $3.5 billion over 10 years into the K-12 education system.
- Where will the funding come from? The majority of funding will
come from the increased payout from the State Land Trust (from 2.5% to 6.9%) via Proposition 123. In
addition, $625 million will come from the state’s general fund ($50 million for five years and $75 million
for the next five years).
- What is the State Land Trust? When Arizona became a state,
Congress granted land to the state that are managed for the purpose of generating revenue primarily for
K-12 education. It serves as a long-term savings account for Arizona education. Right now 2.5% of the
proceeds are given to K-12 education; Proposition 123 proposes to increase that to 6.9% for ten
- Why is Proposition 123 important? The passage of Proposition 123
will provide much needed funding to support Arizona schools, which took one of the worst cuts to
per pupil funding during the recession. It is the first step towards a
long-term, sustainable and dependable funding plan for K-12 education. It will
settle the 5-year inflation funding lawsuit and will
guarantee annual inflation adjustments to school funding.
- When will schools receive funding? If passed, schools will receive
funding in June.
- Are there restrictions on how schools can use the funding? No. Schools decide how to use
the funding they receive. There are no strings attached to the funding.
- How much will Kyrene
receive this year and the future? If passed, Kyrene would receive 3.4 million per year.
- What does Kyrene plan
to do with the funds? Kyrene would plan to use these additional funds to increase compensation and support instructional resources.
- Is there any difference in funding for public district schools
or public charter schools? No. There is no difference in
the amount of funding that public district or charter schools will receive. They all receive the same amount
per pupil that will be distributed through the funding formula.
- How are schools planning to use the funding? Can I be involved
in that process? Many schools are developing
their plans now for how they plan to use the funding. Many are planning to use the funds to support
teachers. If you would like to be involved in this process, you can attend your local school board’s
meetings where they will be discussing their proposed budgets.
- Will this solve Arizona’s education funding issues? Proposition 123 is one step
towards a long-term, sustainable and dependable funding plan that is needed for Arizona education
from the early years through college and career. We believe that other steps in the future should
include increasing teacher pay, updating and renewing Proposition 301, restoring funding to our
universities and community colleges, ensuring all children can read proficiently by the end of 3rd grade, and restoring Career and Technical
- How did Arizona get into this situation? Arizona voters passed
Proposition 301 in 2000 that includes a 0.6 percent sales tax to support education. It included a measure
that requires inflation to be included in the budget each year. However, during the recession,
inflation was not funded, which resulted in a lawsuit in 2010. After years of the lawsuit, the parties
reached a tentative agreement in fall 2015 which was presented to legislators during a Special Legislative
Session in October 2015. As a result of the Special Session, legislation was passed to increase education
funding from the general fund, to hold a special election, and to ask voters to consider increasing the
payout from the State Land Trust, which is now known as Proposition 123.
- What do the triggers in Prop 123 do? There are contingencies in the
Proposition language to protect the State Land Trust and the general fund. If the contingency plans
are ever needed, the Base Level amount will still be reset to account for inflation. The triggers do the
- Permits the Proposition 301 inflation factor to be
suspended for any fiscal year that Transaction Privilege Tax (TPT) and
employment growth are between one and two percent. Mandates that the Proposition 301 inflation
factor be suspended if TPT and employment growth are less than one percent.
- Allows the Legislature, beginning in FY 2026, to
suspend inflation payments and reduce K-12 funding if K-12 accounts for at
least 49 percent of state General Fund spending. Stipulates that if it is 49 percent, the
Legislature will be able to reduce K-12 spending by the amount that it was inflated in the prior year and
if it is 50 percent or more of state General Fund spending, then the Legislature may reduce spending
by twice the inflation amount from the prior year.
- What happens if Proposition 123 is not passed? If Proposition 123 is not
passed, schools will not receive this funding and the inflation funding lawsuit will continue, likely for years.