IN FOCUS - Mar. 7, 2025

It’s Let’s Make a Deal time for Proposition 123.

Extension of the K-12 funding mechanism is finally showing signs of life as GOP lawmakers this week reacted - brace yourself - positively to Governor Katie Hobbs’ latest renewal plan. The Governor moved significantly in the direction of Republican legislators, most notably by abandoning her prior position that a portion of the funds be allocated for school support staff, such as counselors. The Hobbs administration also now proposes to maintain the current, 6.9% drawdown rate from the state land trust; her earlier plan had called for an increase to 8.9%.

Differences remain between plans favored by the Governor and GOP legislators. Perhaps the biggest discrepancy involves how funding would be allocated, as Republicans favor guaranteeing the dollars for teacher pay, and the Governor proposes greater flexibility for schools.

The Hobbs administration plan also would make most of the revenue increase permanent, rather than requiring that voters approve an extension every decade. Additionally, the timing for an extension vote remains a matter of debate; the Governor would prefer referring the extension to a special election ballot this fall, while GOP legislators lean toward the 2026 General Election. 

Prop 123 expires at the beginning of July.