IN FOCUS - Dec. 6, 2024

New year; same crisis.

Legislators taking office next month will confront multiple holdover challenges from 2024, but perhaps none is bigger or more pressing than the looming expiration of Proposition 123. The ballot measure that generates approximately $300 million/year for K-12 schools is set to expire in July 2025.

Negotiations for an extension fell apart last spring. Now, any extension would require voter approval during a statewide special election next year … and a legislative referral must come early enough in the session that counties have time to prepare.

Also at play: political dynamics in 2025 are radically different than 2016, when Prop 123 was first referred to the ballot and approved by voters. Prop 123 was the brainchild of then-Governor Doug Ducey, who was able to shepherd it through a GOP-led Legislature and command business backing for a multi million-dollar campaign. Even at that, Prop 123 barely squeaked by with a victory.

Now, Democratic Governor Katie Hobbs and the Legislature are almost always at odds. The advent of empowerment scholarship accounts and other issues have made K-12 education an even bigger political lightning rod, and we’ve seen local school bond and override campaigns become increasingly challenging to approve.

If Prop 123 isn’t renewed, the dollars it generates for K-12 could still come from the General Fund (a sizable surplus is projected in 2025). In down years, however, significant cuts to existing State programs would be required in order to maintain education funding.

We’ll find out the future of Prop 123 soon enough.