Moving up from la last pla lace in in education funding, g, and Dr. Don Covey Maricopa County what we can le learn from Superintendent of Schools other western states.
Making the case for new revenue for education funding. I want the truth … you can’t handle the truth!
Essential public policy questions that need to be answered: • Do we need to re-invent the wheel on additional education funding or are there some established programs worth considering that other states are using? • Are we talking real money here – say, a billion-plus dollars? • Do other states have other taxes that make them higher tax states than Arizona or less business or taxpayer friendly?
States to lo look at for possible answers • Texas, Nevada, Wyoming, North Dakota, South Dakota, New Mexico, and 17 other states. • Add to this list another 9 states, not including Arizona, that are joining the bandwagon with current legislation. (Source: United States Energy & Information Association)
All of these 23 states have supplemented What are these their General Fund states doing? using excise taxes.
Why an excise tax and what is it? • Generally, excise taxes are applied to energy resources, such as natural gas and oil drilling, extraction and transmission. • Could also be a “consumption tax” (aka sin tax) on alcohol, tobacco, and the likes. • Arizona voters approved First Things First which puts an additional fee on tobacco products.
Why an excise tax and what is is it it? The general public has a significant interest in the use of the air, land, water, minerals, and natural resources in their state for the profit of investors. “The oil and natural gas industry contributes …annually to the State’s Permanent School Fund, which supports Texas K- 12 schools.” (The largest endowment fund in the United States now worth over $35 billion!) Arizona imports 100% of the natural gas used in homes and for electric generation. Much of that gas comes from Texas, and every therm of gas used puts money into a Texas classroom. Texas educators say, “Thank you, Arizona.” ~ Todd Staples, Executive Director , Texas Oil and Gas Association
Arizona “Gold!” Blessed with natural resources used by many other states, it would appear that Arizona may not need to re-invent the wheel when it comes to funding programs for schools that work in other western states!
Are we talking real money? Excise taxation in several western states is so lucrative that they have ELIMINATED their personal, corporate income and/or sales taxes WHILE EAR- MARKING funds for public education. “[Excise taxes] help to alleviate potential impacts on state and local taxpayers.” ~ National Conference of State Legislature
• Oklahoma – Excise taxes contribute more than double the amount of money to the state general fund than corporate income taxes. • Louisiana – Excise taxes contribute more than triple the amount of money to the state general fund than corporate income taxes. • West Virginia – Excise taxes contribute nearly 400% more to the general fund than corporate Are we talking real income taxes! money? • Alaska – 72% of all state revenue is derived from excise taxes. • North Dakota – 54% of all state revenue is derived from excise taxes. • Wyoming – 39% of all state revenue is derived from excise taxes. • Texas – 11% of all state revenue is derived from excise taxes.
What about Arizona? Arizona exports 34% of the electricity generated in our state. If Arizona used an excise tax on this energy commodity, like 23 other states do their exportable commodities, one third of all the revenue generated would be paid by out of state, non-residents who benefit from the use of Arizona’s natural resources.
Excise Taxes – A significant revenue stream • Excise taxes play a major role in funding public education and the General Funds of nearly half the states in the United States, mostly in the Western United States. • These states generally feature low property taxes, low to no income taxes, and low to no sales taxes. • And EVERY ONE of these states has a greater state commitment to public education funding than does Arizona.
This is not an argument. This is not a problem. This is an opportunity. Let the dis iscussion begin. .
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