The Farley Report from Phoenix #239: 2-10-16

Today was one of the most dramatic non-Sine Die days I have experienced in my ten years at the Legislature. Two horrible bills passed out of my Senate Finance committee, but at least we killed one really awful one. Later on the Senate Floor without warning the unanimously bipartisan JTED restoration bill was put at mortal risk by the Governor, although it now appears to be nearly fully resuscitated.

After this brief Farley Report pledge break, I’ll share the scoop…

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—> The first day of Lent started off well when the majority of the Senate acted in a Lenten spirit of penitence and thoughtfulness to defeat an Ohio finance corporation’s latest attempt to expand predatory lending in Arizona, SB1447. 

The bill would have allowed installment loans of up to $2,500 at interest rates of more than 200% annually. There was much testimony on the way these loans keep people trapped in poverty through quickly compounding interest on top of tiny principal payments. 

In one case we heard about, a woman in poverty who worked at a minimum wage job needed to pay her electric bill to avoid her service being cut off. She did not know about low-income programs offered by utilities, but had seen the many title lenders offering “easy” money all over town and decided to get a small loan of around $100 to get her lights back on. She was upsold by the lender to a $1,000 loan, and after a year with a couple of missed payments her balance had already increased to $3,000. Luckily, her case came to the attention of St Vincent dePaul’s and they paid off her loan to get her back on her feet. Thousands more are not so lucky.

We heard from the sponsor, Sen. John Kavanagh (R-Fountain Hills), that active members of the military and their families would not be allowed to take such loans. When I asked why, he replied that federal law forbids it. Later we discovered that the Department of Defense decided that these high-interest predatory loans are a clear and present danger not just to the financial security of military families, but also by extension to national security in general.

I suggested in my explanation of my No vote that if these loans are deemed dangerous to our country’s military, we ought to deem it dangerous to people in poverty in our state. 

I was so pleased when Lynne Pancrazi (D-Yuma) and Kim Yee (R-Phoenix) joined me to vote No, defeating the bill by a vote of 3-2. Sen. Yee in her explanation shared that her moral compass told her that this bill did not smell right, and she would vote No even though she knew that last year the corporation behind this bill had paid for glossy, glowing mailers sent to constituents of each member that supported their bill. 

We can celebrate for now, but I don’t expect this fight to be over, given the desire of predatory lenders to gain access to impoverished Arizonans. I will alert you if it comes back in some form.

—> The day went downhill from there. Chair Lesko offered her bill SB1125, brought by the Arizona Tax Research Association (ATRA) to eliminate desegregation funding for 20 impoverished school districts throughout Arizona. 

This bill was defeated last year after compelling testimony by Tucson Unified’s Superintendent HT Sanchez, so this year TUSD was written out of the bill, but only temporarily. Districts with active court orders are exempted, and TUSD is the only one to which that exemption applies — for now. Once TUSD attains Unitary Status, which they are pursuing, they would fall back into the bill and have their funding eliminated as well. 

These districts had been found to be segregating students at varying levels. They are able to gain additional funds to pay for desegregation programs to satisfy court orders or agreements with the federal Office of Civil Rights. Once the funding is cut off, the requirement to pay for those programs still remains in order to remain desegregated. That will lead to massively slashed budgets for all students. 

The cuts under this bill dwarf the revenues that would be gained if Proposition 123 passes in May. To give you a sense of scale, Phoenix Unified would lose $55 million annually under SB1125, and would only gain $5.9 million from Prop 123. TUSD would lose $63 million annually under SB1125, and would only gain around $10 million from Prop 123. 

After eight years of the largest cuts in state support in the nation, 23.3% if adjusted for inflation, our schools can’t take any more cuts. We need to move in the other direction. 

If this bill continues moving forward (and it did pass out of committee 3-2 on a party-line vote), then — no matter where you stand — for the sake of supporting public education in Arizona, defeating SB1125 is much more important than passing Prop 123. I certainly hope Governor Ducey hears that message loud and clear.

—> An even more dangerous blow against public education in Arizona was struck when Senate Finance went on to pass SB1279, the final step in the privatization of all public schools in Arizona — the expansion of the ESA accounts. The bill would provide vouchers for all students in the state, without exception, that would allow each student to take $5,000 from taxpayer money and take it to any private or religious school or homeschool or online school. Those schools would not be subject to most of the accountability measures that public schools must follow. 

Since most private tuition is $10,000 - $15,000, only well-off parents could afford to take this deal, meaning that everyone else, including students who do not have parents to advocate for them, would remain in a dwindling number of private schools that are increasingly starved of resources by the money being removed from the public education system by the ESA accounts. 

Our country built the strongest economy in the world through the work of the largest and best-educated middle class the world has ever seen. A robust, well-funded public education system made this all happen. If we are to remain the leading world economy and give our students the chance to lift themselves from poverty, we must defend our public education system from an unceasing onslaught of attacks like SB1279. 

Sadly, this, too, passed 3-2 along party lines. 

—> I headed from this committee to the floor, and felt things were looking up. We were set to caucus, COW, and third read the unanimous and bipartisan JTED restoration bill to roll back the cuts made by the legislative majority last year — the cuts that will put JTEDs into a death spiral if they are not restored this month.

But just before we were about to go into COW, Speaker Biggs got a call while on the dais, called a recess, and retreated into his office, leaving us hanging. Later, he returned to the floor and told several of us that Governor Ducey had called and he had threatened to veto the JTED bill unless he got most of what he wanted in the budget. The bill was pulled from today’s calendar.

I was floored, as were the other Senators I talked with, that Gov. Ducey would endanger one of the most successful public education programs we have seen — supported by Democrats, the business community, and now Republicans — for political gains. 100,000 JTED students were in the balance. This was not a place to play politics as usual. 

I sent the word out on my Facebook page and asked people to call the Governor’s office to ask him to agree to sign the bill. Hundreds of you responded. Immediately. 

Three hours later, I got a report that the Governor’s spokesman had stated that the Governor was now committed to signing the JTED bill, and it has been placed on the calendar for floor action tomorrow. 

Thank you for taking action, from the bottom of my heart, on behalf of those 100,000 kids and the future of our workforce and our economy. Working together, we can get even hard things done. 

Thanks for your continuing faith in me as your Senator. 

Steve

Steve Farley

Senator, District 9, Tucson

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