Spend or Be Taxed

Voters in Arizona may have a chance over the next few years to prevent future state cuts to higher education -- with a catch.

An organization called Save Our Students is pushing an initiative that would prevent the Legislature from cutting higher education spending lower than 2015 levels, ban tuition for in-state students from increasing above the cost of living and lock incoming students at the same tuition for four years. College leaders often fear that when such proposals are made, states will stick to the tuition freezes but not to pledges on appropriations, leaving public colleges struggling to adequately meet student demand. But Save Our Students has a plan to make their agenda work.

If lawmakers violate any of these measures, a 2 percent corporate tax increase will kick in -- a condition that could benefit higher education, but that could spell out doom for the movement.

This movement follows the largest cuts to higher education funding in any state this year. More than $99 million was stripped from Arizona's budget for the state’s universities, which state officials blamed on a $1 billion deficit, and tuition has steadily risen at Arizona institutions over the past few years. Both facts were cited by Save Our Students leaders as leading reasons why Arizona’s public university system needs to be shielded from the actions of the Legislature.

The referendum does not refer to the state's community colleges, but just the three major public universities. Two community college districts in Arizona saw their funding completely cut by the Legislature earlier this year.

Matthew Capalby, president of Save Our Students, said the guaranteed tuition rates make sense for middle-class families who need to plan ahead. As a parent with two children quickly approaching their college years, he said he was especially concerned about being able to save up enough to cover four years of education twice over.

Capalby, who is the former vice chairman of the Arizona Democratic Party, also cited Arizona’s Constitution, which states that education at the state’s universities “shall be as nearly free as possible.”

“It’s been a very concerning issue of the general population in Arizona, especially as a fact the Legislature made the most drastic cuts to higher education and we’ve seen the highest tuition increase in the country at 83 percent [since 2009],” Capalby said. “No other constituency has seen their tuition or user fees rise at that exorbitant rate.”

He said the rising tuition costs have had effects felt in other industries, like real estate, and students have to spend more or take out more loans to cover the cost of tuition, meaning their lower credit scores or diminished savings prevent them from buying property for a longer period of time after they leave school.

He added that he had received pushback from some who were afraid the requirements of the initiative might cause the closure of programs or prevent the Board of Regents from making further changes to higher education, but said without the initiative, these outcomes would be unavoidable.

Andy Barr, a spokesman for Save Our Students and a political consultant, said the organization will turn to student leaders at Arizona universities to help collect signatures and lobby for the initiative. Organizers will have to collect 150,642 signatures by July 2016 to get the measure on the ballot.

The group also conducted a survey with Public Policy Polling to gauge the interest of Arizona residents in such an initiative. Nearly 70 percent of residents were in favor of capping tuition increases for in-state students. No question was asked about the respondents' views on a tax tie-in for the initiative.

Barr said that while he did not know how many signatures have been collected so far, the group was focusing on preparing itself for recruiting supporters and signatures at the start of the academic year.

“I think we’re in good shape,” Barr said. “It’ll take a lot of work, but luckily it’s an issue people feel passionate about.”

A ‘Potentially Dangerous’ Initiative

While Save Our Students is confident that it will be able to collect enough signatures to get the initiative on the ballot, an uphill battle to pass the measure awaits them. No initiatives made it onto the 2014 ballot, and both on the 2012 ballot failed to pass.

Katie Paquet, a spokeswoman for the state Board of Regents, said the board could not take official positions on ballot initiatives, but there were some concerns about the work done to create the initiative.

She noted that two of the three state universities already have tuition guarantees and the University of Arizona committed to only increasing tuition by 3 percent annually for the next decade.

“It could be potentially dangerous when you have an initiative that mandates a tuition guarantee program, because we don’t know what the future holds in terms of funding from the state,” Paquet said.

Paquet added that it's important for universities to have the flexibility to change the cost of tuition because the amount of funding allocated to higher education fluctuates annually, meaning that officials may have to cut programs or take other steps to keep the institutions running.

Spokespeople from all three universities -- Northern Arizona University, Arizona State University and the University of Arizona -- declined to comment on the initiative, referring to the Board of Regents for comment.

Governor Doug Ducey, a Republican who took office in January, campaigned on a promise not to raise taxes for the state's residents. Daniel Scarpinato, a spokesman in the governor’s office, said Ducey’s administration would consider the initiative more thoroughly if it makes it onto the ballot, but the governor opposes anything that would raise taxes or hurt the economy.

He said Ducey, who as governor is automatically appointed to the Board of Regents, has been working closely with other regents to come up with a “long-term plan for what our higher education system should be like and wants to continue that dialogue.”

Garrick Taylor, a spokesman for the Arizona Chamber of Commerce and Industry, said in an email that the group weighs all of the initiatives during each election cycle, but does not support any measure that might “tax the state’s job creators.”

“So-called education advocates don't help their cause when they propose high-tax policies that could harm the economy and thus ultimately reduce funding to education,” he said. “The proponents will have to make their case.”

Capalby emphasized that the 2 percent corporate tax increase is not an automatic measure, but rather acts as leverage to make sure the Legislature abides by the higher education funding regulations in the initiative.

And while tuition has increased over the past few years, Arizona’s rates are still some of the lowest compared to the peer institutions for each university. Capalby said while this is true, he and others in his organization believe that if tuition continues to increase at its current rate the programs will become more expensive than those in other states.

“We’re not priced out, but at current levels, with continuing cuts and rising rates and increasing tuition, it’s not going to be for very much longer,” he said.

John Matsusaka, the executive director of the Initiative and Referendum Institute at the University of Southern California, said without support from the government, university system and chamber of commerce, the initiative might struggle to pass, even if it makes it to the ballot.

He said a measure like this one, which includes more details than a one- or two-sentence initiative, might confuse voters and prevent them from supporting it.

“Voters don't tend to read through the details, so they're worried that there's stuff buried in there that nobody told them about or they don't like,” Matsusaka said. “What happens in those cases is who's endorsing it makes a lot of difference.”