State Constitutional Amendment Relating to Public Retirement Systems
Proposition 125 was referred to the ballot by the Legislature in order to facilitate the enactment of two laws passed during the last Legislature, SB1442 from 2017, and HB2545 from 2018. These two bills have to do with Correctional Officers Retirement Plan (CORP), and Elected Officials Retirement Plan (EORP) respectively. Prop. 125 would allow the following to happen:
Correctional Officers Retirement Plan (CORP)
- For defined contribution plan members hired prior to July 1, 2018, allow the CORP board to adjust the amount of total compensation considered for retirement purposes based on IRS guidelines.
- For defined contribution plan members hired on or after July 1, 2018, caps the total compensation considered for retirement purposes at $70,000 annually.
- The compensation limit will be adjusted each third year by average changes in probation employee wages, with the first adjustment made in 2022.
- Creates a uniform annual cost of living adjustment for retired probation/correctional officers receiving a pension. (Currently any benefit increase depends on whether and how much the fund’s investments increased over the previous year.)
- For those hired prior to July 1, 2018, the adjustment will be the rate of inflation or 2%, whichever is less.
- For those hired on or after July 1, 2018, the adjustment will be between 1% and 2% annually for retired members based on the projected liabilities of the system.
Elected Officials Retirement Plan (EORP)
- Creates a uniform cost of living adjustment for retired elected officials and judges receiving a pension.
- The adjustment will be the rate of inflation or 2%, whichever is less.
The conditions outlined above were enacted by the Legislature in separate legislation, as part of a broader effort to resolve long term solvency concerns about the correctional officer and elected officials retirement systems. The proposition does not contain these provisions explicitly, rather you are voting to allow them to go into effect. If the proposition fails, they will not take effect and the current statutes will remain as they are now. Because the proposal passed by the Legislature would impact the cost of living adjustment for current retirees, voter approval is required.
State Constitutional Amendment Prohibiting Taxation of Services Not Taxed as of Dec. 31, 2017.
Proposition 126 would amend the Arizona Constitution as follows:
- Prohibits the state or any city, town, county, or other political subdivision or special taxing district from levying any tax, fee, or assessment of any kind on the privilege to engage in, gross receipts from sales, or gross income derived from, any service performed in Arizona.
Arizona derives most of its state revenue from Transaction Privilege (sales) tax. Currently, the state levies a tax on the sale of goods and other specific categories, but it does not charge tax on services, such as real estate services, haircuts, medical services, spa treatments, veterinary services, etc. etc. The one exception to this is prime contracting (building contractors).
Currently, without Proposition 126, the Constitution requires ⅔ of both houses of the Legislature to vote to impose an additional tax, rather than a simple majority. They Legislature may also refer a tax to the voters, or citizens can also initiate a ballot measure to impose a new tax. With Prop. 126, the Constitution would prohibit service taxes altogether, and an election to amend the Constitution would be required in order to levy a service tax of any kind.
Friends of ASBA Position: NO
State Constitutional Amendment Relating to Electricity Generation from Renewable Sources
Proposition 127, broadly, would require any regulated electric utility to source 50% of the power it sells to retail customers from “renewable energy resources” by the year 2030, of which at least 10% must be from “distributed renewable energy resources.” The measure:
- Defines “renewable energy resource” as an energy resource that is replaced rapidly by a natural, ongoing process and that is not municipal solid waste combustion, trees larger than 12 inches in diameter, nuclear or fossil fuel.
- Restricts eligible renewable energy resources, except existing hydropower facilities, to facilities built after December 31, 1996.
- Existing hydropower facilities may only count additional generation capacity due to equipment upgrades as “renewable.”
- Defines “distributed renewable energy resource” as an energy resource from distributed generation technologies including biogas electricity generators, biomass electricity generators, geothermal generators, fuel cells that use only renewable fuels, new hydropower generators of 10 mw or less, solar electricity resources, biomass thermal systems, biogas thermal systems, commercial solar pool heaters, geothermal space heating and process heating systems, renewable combined heat and power systems, solar daylighting, solar hvac systems, solar industrial process heating and cooling, solar space cooling, solar space heating, solar water heating, and wind generators of 1 mw or less and that is not municipal solid waste combustion, trees larger than 12 inches in diameter, nuclear or fossil fuel.
- Allows credits to be transferred from a power generator to another party to satisfy the requirements.
- States credits may be from any year, but once used are retired and may not be used again.
- Specifies the following energy targets:
A Citizen Referendum of SB1431, relating to “Empowerment Scholarship Accounts”
Proposition 305 is the exercise of a power that not all people in every state have…the power of referendum. That is, the ability to put a bill the Legislature passed and the governor signed on the ballot for approval or disapproval by the voters.
SB1431 was passed by the Legislature and signed by Gov. Ducey in 2017. That summer, a group of education advocates collected enough signatures to halt its enactment and place it on the Nov. 2018 ballot for a final decision by the voters. The proposition is quite simple in its execution–do you want SB1431 to go into effect or not? A “YES” vote means you do, and “NO” vote means you do not.
Friends of ASBA Position: NO
Friends of ASBA does not support using public dollars to pay for a student’s private or religious education. Therefore, the organization has endorsed a NO on this proposition to prevent the expansion of ESAs/Vouchers from going into effect. If you do not know anything about the ESA/voucher program, and why Friends of ASBA opposes it, it might help you to watch this video.
A limited version of this program already exists. It is limited to particular populations of students. This proposition has nothing to do with it. If this measure fails, nothing happens to those on the current program. Rather, this proposition would gradually open it up to all students, regardless of circumstance, ability or income level, including Kindergarteners, who never have to attend public school to be eligible. It amounts to a taxpayer subsidy of private and religious education for any student.
Complete Summary of SB1431 as enacted:
- Expands Empowerment Scholarship Account (ESA) eligibility in the following ways:
- Students attending D or F school districts (as opposed to D or F schools only) are eligible with the next ESA application period.
- All students K-12 beginning in FY2020-2021, phased in over a three-year period.
- In 2017-2018, grades K, 1, 6, and 9.
- In 2018-2019, grades K-2, 6, 7, 9, and 10
- In 2019-2020, K-3, and grades 6-11
- In 2020, 2021, grades K-12
- Provides that a Kindergarten student who has never attended a public school is eligible to enroll in Kindergarten if the student is at least 4 but under 7 years of age.
- Allows ESA students attending a private school to remain on the ESA program until the student graduates from high school, obtains a GED, or reaches age 22 if the student remains enrolled in a private school, and allows the department of education to request confirmation of continued enrollment and progress toward graduation.
- Allows a student who has reached 18 and qualifies as a disabled student under the program to remain enrolled until age 22 or until the student obtains a GED with no requirement to remain enrolled in a private school, if the student continues to use at least 50% of the ESA amount each year.
- Continues the limit on new enrollment of .50% of the total number of public school students each year (approx. 5,500 annually) until December 31. 2022.
- Beginning in FY2022-2023, limits the number of students eligible for an ESA to the total number of students approved by the department during the 2021-2022 school year
Funding Amount (higher amount for low income students)
- Clarifies that students transferring from a district school are eligible only for 90% of the amount that would be provided to the district of last attendance.
- States a student whose family is low income (defined as 250% of the federal poverty guideline, or $60,750 for a family of 4) is eligible to receive 100% of the amount that would otherwise be awarded to the school district or charter school of attendance.
- Requires students enrolled in a private school only to annually complete a nationally standardized norm-referenced test, a college entrance exam that assesses reading and math, an AP exam that assesses reading and math, or AzMERIT. Does not apply to students with disabilities.
- Requires only those private schools enrolling 50 or more students receiving an ESA to publicly report assessment results on its own website, not to ADE.
- Requires the department of revenue to administer the income eligibility requirements, and transfers 1% of the amount of an ESA retained for administration to be transferred to the department of revenue.
- Requires the treasurer to contract with a private financial management firm to administer Empowerment Scholarship Accounts.
- Requires ADE to allow an ESA account holder to give consent for a third party to apply for renewal and interact with ADE on the account holder’s behalf.
- Establishes requirements for the administration of ESAs by the department of education and the department of revenue.
- Establishes the nine-member empowerment scholarship account review council, consisting of:
- Six ESA parents, appointed by the governor.
- The House and Senate education committee chairs.
- The Superintendent of Public Instruction or the Superintendent’s designee.
- Repeals the council on December 31, 2020.
- Makes numerous technical and conforming changes.
A Legislative Referral Relating to the Citizens’ Clean Election Commission
Proposition 306 was referred to the ballot by the Legislature on the last day of the 2018 Legislative session.
The clean elections system, which provides an amount of funding for candidates for state office in exchange for refusing private contributions and adhering to transparency requirements. It was created by initiative and is therefore unable to be amended by the Legislature, except in very narrow circumstances. To change it in a substantive way, the amendment must be referred back to the ballot for approval by the voters. That is what this measure is doing.
Prop. 306 has two main provisions:
- Prohibits a candidate from making payments from the candidate’s campaign account to a tax-exempt organization eligible to engage in political activity, or to a political party, whether directly or indirectly
- Subjects the rules adopted by the Citizens’ Clean Elections Commission (CCEC) to review by the executive branch, via the Governor’s Regulatory Review Council (GRRC).