STEVE GOLDSTEIN: And now we're going to check in with the editorial board of the Arizona Republic. It's a weekly segment where we talk about current issues facing the state and the nation, featured in columns on the newspaper's op-ed pages. One ballot measure Arizona voters are deciding on next month is Proposition 208, known as Invest in Ed. If passed, it would increase the income tax on people who make at least $250,000 a year to pump hundreds of millions of dollars into the state's K-12 system. Phil Boas of the Republic is with me for his regular appearance to talk about why the paper's editorial board gave the thumbs down to Prop 208. So Phil, does the majority of the board at least believe the state's public schools are underfunded?
PHIL BOAS: It's one of the things we're unanimous about. I mean, everybody on that board believes strongly in public education and believes that in Arizona we need more funding for public education. So as a board, we just don't believe that this is the way to do it, that this is trying to put the burden of increasing funding on the backs of a very narrow range of taxpayers. And we just think that that's unfair. That's wrong. We all should be paying our fair share on this, what is a good for all of us.
GOLDSTEIN: One of the things that the editorial argues is that this would hurt small businesses. Flesh that out a bit.
BOAS: Small businesses, when they file, they file with personal income tax forms. And so the money that they're making on their business is going to be taxed at almost double the rate of what what it is now. And so they would be paying roughly double what large corporations now pay in income tax. So we think that that is unfair, and we think it's a disincentive to keep capital within your business, to try to grow your business, grow jobs. That it's not going to be good for the Arizona economy. The pro-208 people will argue, "Well, yes, those small business people who will be paying taxes on it will barely make that threshold and will pay a nominal amount in increased taxes on the larger rate." But what happens is once you start taxing the rich, you don't stop. And we've seen that in blue states. You know, you get one proposition through or one measure through the legislature, and then you've got another and another and another, because everybody sees you can pass things when it's free money, when it's only a narrow range, you know, a 1 or 2% of the people that are going to be taxed for it.
GOLDSTEIN: And one other thing is you talk about how the JLBC — Joint Legislative Budget Committee — is projecting more than $800 million potentially coming from this. Whereas backers of Invest in Ed are saying there would be even more. But the board is even saying that those numbers may not even pan out. Is that totally COVID-related, pandemic-related or just generally?
BOAS: Well, what happens is the rich have options, and when you raise their taxes, they can find ways to get around them. And the very high estimates, the almost billion dollars that the proponents are arguing they're going to get out of this — it's probably a lower number than that. My biggest concern, though, is just the piling on. I'll give you an example. So California right now has the highest state income tax rate at 13.3%. And they've got two more initiatives now on the ballot to tax the rich, OK? And even Gavin Newsom, the very liberal governor of California, is pushing back against those. You've got a liberal governor of New York, Andrew Cuomo, pushing back against a proposal to tax the rich in New York. So even blue state governors are recognizing you can take this stuff too far, and it becomes a hindrance to job growth and to the economy. If you don't keep the economy going — the engine of our society — you don't have money to fund schools.
GOLDSTEIN: Phil, let's come back to the general issue of K-12 funding, because I presume a lot of people are gonna be listening. And even those who will give some credit to the governor and the legislature for bumping up funding back, it's still not at pre-recession levels. There's still concern about that. So how much of this, though, is a question of — whether if casting blame makes any sense or not — if the leaders of the state, even the business leaders who want to do something, why wasn't there another plan this November? Why is Invest in Ed the only option voters have?
BOAS: Well, so, I mean, the argument that the proponents make is that the state hasn't done anything, and it's just not true. If this were happening in a vacuum, it might make more sense. But here's what the state of Arizona has done since 2016. They passed Prop 123, which infused $3.5 billion over 10 years into K through 12. The governor's [20x2020] proposal added $645 million for public school teachers. This year, the state accelerated additional assistance to the tune of $67 million. So it's not like the state has been standing pat. There's been a lot done. Billions of dollars being pushed into public education in just the last few years. So it's just false to argue that the state hasn't been doing anything. They've been doing a lot.
GOLDSTEIN: But as we started the conversation, everyone on the board even agrees that it hasn't been nearly enough. That's why I'm asking, is there, the business community which cares, some of the state's leaders who care — why didn't they come up? Why wasn't there something that could have been an alternative? Now, maybe voters get confused by having two options there, but if Invest in Ed is so bad, we should have something else, shouldn't we?
BOAS: Well, let's look at what, let's look at education funding in Arizona. It tracks the economy. So we were funding education at a very high level prior to the Great Recession. And then that hit, and the biggest part of the budget in Arizona is public education. And the only place we really had to cut was in public education. And so it took a huge hit, and it has taken time to restore that. We couldn't do it overnight. It's taken years to restore all of that funding to public education because there are a lot of competing priorities and budgets. And, you know, you have to look at the whole thing, if you're a legislature or you're a governor, you can't just look at public education. You've got to survey the whole field. And so this happens in steps. You don't come around, come out of a recession like that — a generational recession — and immediately restore all the funding. It takes time.
GOLDSTEIN: Phil Boas of the Arizona Republic, always good to talk with you, Phil. Thanks. Take care.
BOAS: Hey, good talking to you. Hey, thanks, Steve.
