NEWS RELEASE
JUNE 4, 2015
- Increases the current distribution formula from 2.5 percent to 10 percent over five years, and shifts to a rate of 5 percent for the following five years — still double the current rate;
- Gives schools nearly $1.8 billion more than they would currently receive from the formula over five years;
- Accomplishes all of this with no new taxes and no additional general fund spending.
Governor Ducey’s Enhanced Funding Education Proposal THE PERMANENT LAND ENDOWMENT TRUST FUND
- The federal government gave the state of Arizona lands as an endowment at the time of statehood.
- When the state sells those lands, the money goes into the Permanent Land Endowment Trust Fund.
- Those funds are held in trust, invested, and distributed to beneficiaries enumerated in the stateconstitution. (K-12 gets 93%)
- As of 2012 (and the passage of Prop 118), beneficiaries receive 2.5% of the value of the PLETF as anannual distribution. Each beneficiary has their own trust account that determines their proportion of the distribution.GOVERNOR DUCEY’S PLAN
- Increases the current distribution formula from 2.5% to 10% over 5 years; then 5% for the next five years (total 10 year plan)
- Under this formula, K-12 schools would receive $1.8 BILLION more over five years than under the current distribution rate.
- Rate would be 5% after five years – still double the current rate.
- With the change, the land trust fund would stand at $5.39 billion.
• NOTE: That means that, even with the higher distribution rate, we’ll still have more money in the fund than we do today.
- This would have no burden on the general fund.
- There would be no tax increase on Arizonans.FAQ:Q: How much is in the PLETF today? A: $5.15 BQ: How much was in the PLETF in December 2009? A: $2.67 B
Value of Permanent Fund (total for all beneficiaries) over time
As of end of FY
FY Market Value
2014 $ 2013 $ 2012 $ 2011 $ 2010 $ 2009 $ 2008 $ 2007 $ 2006 $ 2005 $ 2004 $
4,868,540,000 4,149,353,000 3,524,634,000 3,286,678,000 2,721,848,000 2,370,315,000 2,581,135,000 2,446,636,000 2,033,123,000 1,700,051,000 1,311,567,000
Q: How much will be in the PLETF in five years (2021) if we make no changes? A: ~$7.58 B
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Q: How much will be in the PLETF in five years (2021) under the proposed change? Will this decimate the fund?
A: ~$5.39 B; that means that even with the higher distributions, we’ll still have more money in the fund in five years than we do today.
Q: How much will the PLETF distribute over five years without changes? A: $692,525,327
Q: How much will the PLETF distribute over five years from earnings under the proposed change? A: $2,615,107,773
Q: Over a five-year period how much more will go to K-12 education beyond what it would get at the current 2.5% distribution rate?
A: $1.79 B
Q: What is the amount and percentage increase in state funding per pupil per year for the next five years from just the increased distribution money?
A: It’s approximately 9% per pupil increase that amounts to approximately $300/year.
*Note: education is also funded by federal & local dollars.
*Note: all state funding numbers as defined by state General Fund equalization dollars.
Q: So, in total, how much money will go into K-12 education from the State of Arizona in the next five years (2016-2021)?
A: We forecast (including inflation, enrollment growth, K-3 Reading, and the new proposal) $20.35 B
*Note: all state funding numbers as defined by state General Fund equalization dollars.
Q: When will schools (or any beneficiaries) start to get the higher distributions? A: Tentatively FY 2017, pending voter approval in November of 2016
Related: Arizona ranks dead last in teacher pay, classroom spending
