By Victor Skinner
EAGnews.org

PHOENIX – Arizona’s Proposition 118 asks voters to rework the payout formula from the state’s Permanent Land Endowment Trust Fund to create a more consistent flow of money to public education.

State Treasurer Doug Ducey is pushing for the reform because the current formula used to distribute funds from the trust fund – which has accumulated $3.7 billion from state land leases and sales – results in wildly fluctuating payouts that have ranged from nothing in 2010 to  $78 million this year, the TucsonSentinel.com reports.

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Ducey says the new distribution formula in Proposition 118 would produce smaller payouts than the current formula in certain years but would bring stability to the system. The vast majority of the money distributed by the fund goes to public education.

“The old formula to calculate distribution is critically flawed,” Ducey said, according to the news site.

The current payout formula doesn’t produce any school revenue when the adjusted inflation rate is equal to or greater than the fund’s five-year average rate of return. Ducey is asking voters to approve a new formula to run until 2021 that would calculate the annual distribution at 2.5 percent of the trust fund’s average market value of the past five years, TucsonSentinel.com reports.

“It takes away the unevenness and the inability for schools to budget,” Ducey said.

Republican Gov. Jan Brewer, the Arizona Chamber of Commerce and Industry and the Arizona Education Association, the state’s largest teachers union, all support the proposal.

Others, like State Rep. Jack Harper, a Republican from Surprise, contend that if payouts are too big it could undermine the fund’s value and lead to smaller payments for future generations, the news site reports.

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“The change is moving up the compensation that could be spread out and would have meant to be for the future generation,” Harper said.