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Arizona State School Trust Land Revenues, Proposition 300 (2002)

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Arizona Proposition 300 was on the November 5, 2002 ballot in Arizona as a legislatively-referred state statute. It was approved.[1]

Proposition 300 was a concurrent resolution enacting and ordering the submission to the people of a measure relating to state school trust land revenues. Proposition 104, also approved on November 5, 2002, authorized the spending of state funds from sale of lands to fund education.

Election results

State School Trust Land Revenues
ResultVotesPercentage
Approveda Yes 855,687 75.7%
No274,31624.3%
Election results from Arizona Elections Department.

Text of measure

Legislative analysis

The summary provided by the Legislative Council was:

This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.

In 1910, the United States Congress passed the Arizona-New Mexico Enabling Act, allowing Arizona to become a state. The Enabling Act granted Arizona millions of acres of land, referred to as "state trust land." The state land trust is intended to produce revenue for various public institutions (schools, colleges, prisons, etc.). The largest beneficiary of these revenues is the public schools. The state can lease or sell trust land, and the natural products (timber, minerals, etc.) of the land, only to the "highest and best bidder" at public auction.

Revenues earned from state trust land are classified as either permanent or expendable. Revenues derived from the sale of state trust land and the sale of natural products are deposited in a permanent fund by the State Treasurer and invested in stocks, bonds and other interest-bearing securities. The investment income from the permanent fund and the income from leases are expendable revenues for use by the state trust land beneficiaries. Funds are kept separate according to the designated beneficiary.

In 1998, the legislature enacted a law that requires the expendable revenue from the permanent state school fund to be used in the following order of priority: (1) to pay the debt service on state school facilities revenue bonds, (2) subject to legislative appropriation, to fund new school facilities and (3) to fund basic state aid to schools. In 2000, the legislature capped the amount that could be used to support any of these priorities to the fiscal year 2000-2001 level and provided that any expendable earnings that exceeded the fiscal year 2000-2001 earnings level would be placed in a separate fund called the classroom site fund. Pursuant to statutes approved by the voters in 2000, monies in the classroom site fund shall be spent to provide teachers with base salary and performance based compensation increases and development opportunities, reduce class size, fund intervention and dropout prevention programs and pay for teacher liability insurance premiums.

Proposition 300 would: (1) include interest paid on installment sales as expendable revenue subject to distribution, (2) require the state land department in conjunction with the state treasurer to transfer to the state school facilities revenue bond debt service fund an amount necessary to pay the fiscal year's debt service on outstanding state school facilities revenue bonds, (3) include rent and interest paid on installment sales in the amount that can be distributed for basic state aid to schools and (4) reaffirm the legislature's action directing expendable earnings above the expendable earnings level in fiscal year 2000-2001 to be deposited in the classroom site fund. In addition, Proposition 300 specifies that the Legislature intends that the additional expendable earnings are to be used to supplement and not supplant existing statutory funding obligations of this state to its public schools. (1158)[2]

Background

When the U.S. Congress was preparing to confer statehood on Arizona in 1910, it was the Arizona-New Mexico Enabling Act, which granted Arizona millions of acres of land. This land was known as the "state trust land" and was intended that the land would provide an ongoing stream of revenue to support various public institutions such as schools, colleges and prisons.

Revenue was derived from the land through the sale or lease of the land, and through selling various natural resources (such as minerals and timber) from the land.

Revenues from the state trust land were classified as either permanent or expendable. Revenues from the sale of state trust land and the sale of natural products were placed in a permanent fund, where they are invested in stocks, bonds and other interest-bearing securities. The investment income from the permanent fund and the income from leases were classified as expendable revenues.

In 1998, the Arizona State Legislature enacted a law requiring the expendable revenue from the permanent state school fund to be used in the following order of priority:

  1. To pay the debt service on state school facilities revenue bonds.
  2. Subject to legislative appropriation, to fund new school facilities.
  3. To fund basic state aid to schools.

In 2000, the legislature capped the amount that could be used to support any of these priorities to the fiscal year 2000-2001 level and provided that any expendable earnings that exceeded the fiscal year 2000-2001 earnings level would be placed in a separate fund called the classroom site fund.

Funds in the classroom site fund were to be spent to provide teachers with base salary and performance based compensation increases and development opportunities, reduce class size, fund intervention and dropout prevention programs and pay for teacher liability insurance premiums.

Proposition 300 changes

The changes brought about by Proposition 300 were:

  1. Interest paid on installment sales is to be counted as expendable revenue subject to distribution.
  2. The state land department is required, in conjunction with the state treasurer, to transfer to the state school facilities revenue bond debt service fund an amount necessary to pay the fiscal year's debt service on outstanding state school facilities revenue bonds.
  3. Rent and interest paid on installment sales are to be included in the amount that can be distributed for basic state aid to schools.
  4. The legislature's action directing expendable earnings above the expendable earnings level in fiscal year 2000-2001 to be deposited in the classroom site fund is re-affirmed.
  5. Proposition 300 specifies that the Legislature intends that the additional expendable earnings are to be used to supplement and not supplant existing statutory funding obligations of this state to its public schools.

See also

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