Arizona’s Path to Prosperity: Next Steps after Prop. 123

Author: Janice Palmer, Vice President and Director of Policy, Helios Education Foundation

December 1, 2016

We know that the long-term prosperity of Arizona and its residents depends on a quality education system that effectively prepares its students with the critical thinking and life skills for success in college, career, and life. With stronger classrooms, we build stronger communities.

Arizona took that first step in May by settling a five-year lawsuit through the passage of Proposition 123. Prop. 123 was the result of the State settling with Arizona public schools to provide inflationary monies to schools that voters mandated back in 2000. This will provide public schools with $3.5 billion of additional revenue over the next 10 years. Even with this much-needed infusion, it’s important to note that this only provides schools with inflationary monies – monies to ensure a dollar today has the same buying power as yesterday.

Since our August blog, which focused on where Arizona currently ranks as it relates to the percentage of funding that comes from federal, state, and local sources, it’s clear that Arizona lags significantly in the percentage of state revenues supporting our K-12 education system. Even so, Arizona has chosen to make some significant strides forward.  In September, Arizona launched Achieve60AZ, which set a goal of having 60 percent of 25-64 year olds with a four-year, two-year, or industry certification by 2030. This is a laudable, yet ambitious goal that a coalition of over 70 organizations across this state, including Helios, have committed to help achieve. We are currently at 42 percent (37 percent with a postsecondary degree and 5 percent with an industry certification); there is much work to do, and Helios is committed to help move this work forward. In October, the State Board of Education created an A-F Accountability Ad Hoc Committee to advise the State Board of Education on the creation of a new school and district academic accountability system for our K-12 system. Helios serves on that Committee and is working to ensure that the new system is fair, reliable, and equitable, while also accounting for college and career readiness.

If Arizona is successful in these endeavors, and improves school quality and closes achievement gaps, the state is poised to reap the economic benefits that comes with investing in education and begin to reverse the lack of state investment shown in our August blog. So what would that mean for Arizona’s economy?

In Eric A. Hanushek, Jen Ruhose, and Ludger Woessmann’s essay “It Pays to Improve School Quality,” the authors look beyond just school attainment to examine how knowledge capital, i.e. the amount of formal education and skills needed for the labor market, impacts the nation and individual states’ economic output. In 2010, Arizona’s per-capita Gross Domestic Product (GDP) was $35,066, nearly half the economic output of the nation’s leader, Delaware at $63,466. The authors show that if all states, including Arizona, were to bring their average student achievement in schools to that of Minnesota, the highest-achieving state in the United States, Arizona would reap $1.61 billion annually in additional economic growth or five times our current GDP.

In addition, recent research by College Success Arizona indicates that if Arizona increases the state’s postsecondary education attainment rate from 42 percent to 60 percent, it will result in $3.5 billion in personal income and tax revenue into the state annually. 

The data is clear:  increasing Arizona’s knowledge capital, student achievement and postsecondary degree attainment increases Arizona’s bottom line.

Arizona is a great place to live and work.  A crucial key to preserving and improving that quality of life is ensuring that students can learn and develop critical thinking skills in the classroom to contribute more meaningfully to our communities and economy. Helios’ core beliefs are founded on just that: education changes lives and strengthens communities; education is an investment, not an expense; every student, regardless of zip code, deserves a high-quality education; and we will achieve our mission through partnership and collaboration.

This year, Arizona has passed Prop. 123, providing schools with much needed resources; set a statewide attainment goal; and began the necessary work to improve and transform our K-12 public school accountability system. Now it’s time to listen to what the data tells us. We can significantly improve Arizona’s economy with sound investments in education. And just as with every other effort the state’s made in the past few months, we will do it together – philanthropy, policymakers, business leaders, education leaders – as Arizonans.

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