Thursday, April 21, 2016

A message from Jeff DeWit State Treasurer of Arizona

Why I am voting NO on Prop 123.

Proposition 123 is LESS money for schools and RAISES PROPERTY TAXES

I wish I could support Proposition 123.  I wish it was in the best interest of our schools, teachers, and taxpayers.  I wish it lived up to the claim of being “more money for schools without raising taxes.”  Unfortunately it is none of these things.

Anytime politicians tell you they have found a way to spend money without raising taxes, they are either raising debt or raiding a trust fund.  It is why our federal government owes $19 Trillion and our Social Security Trust Fund is depleted.  Our federal government has made false promises, and Arizona is now following suit.

Proposition 123 is a raid on the Schools’ Permanent Endowment Trust Fund which was established by Congress at Arizona’s statehood.  It is a pool of money intended to grow for the benefit of educating Arizona schoolchildren forever.  We can spend interest, but we are never to spend principle, as this plan does in a BIG way.  Proposition 123 violates this Congressional requirement, and if passed, a new multi-year lawsuit will likely begin, further delaying funding for our schools.

The politicians are saying that this Trust is “underperforming our schools.”  This is incorrect.  The amount we spend on schools from the Trust is now the highest in Arizona history, roughly $100 million a year, and should double about every seven years.  Voting NO on Proposition 123 keeps this money for its intended purpose, benefiting our schools forever.  Saying yes cuts the trust fund by over a third, costs our schools (and ultimately our taxpayers) Billions of dollars, keeps teacher pay at 50th in the country, raises property taxes, and creates a huge fiscal cliff in ten years that will hit hardworking taxpayers.

Let me say part of that again.  Right now Arizona is 50th in the country in teacher pay.  If Prop 123 passes, and the trust fund is raided, and when property taxes increase, we will still be 50th in the country in teacher pay!  As the Arizona Republic has pointed out, this is merely a "scam" on the voters to make them think that this is free money, when in reality it comes at a very high price to our children, teachers, and taxpayers.  Read here: http://www.azcentral.com/story/opinion/op-ed/ej-montini/2016/04/18/montini-gov-doug-ducey-league-of-women-voters-proposition-123-arizona-legislature-state-land-trust/83157214/ 

The public is also being told that Prop 123 is “more money for teachers.”  Anyone that reads the language of this bill know this is not true, and their claim was also ‘fact-checked’ by the Republic recently and given ZERO stars and rated “False.” (http://www.azcentral.com/story/news/politics/fact-check/2016/03/05/fact-check-no-requirement-prop-123-money-go-directly-classrooms/80990218/) Prop 123 does the opposite, it is purposefully written to make it possible for the money to go to administrative raises without a single dollar going to a teacher or classroom.

And a dirty little secret of Prop 123 is that it will also increase Trust fund payouts to the State Hospital and State Prisons, among other non-school related spending increases.

Bottom Line: Proposition 123 is LESS money for schools, and RAISES property taxes (see AZ Republic November 18th, 2015).  It is shameful that the proponents are misleadingly telling the public otherwise.  Quite frankly, if the Yes on 123 campaign was a business instead of a political campaign it would be guilty of fraudulent advertising.  It seems to be an unfortunate rule of thumb in today’s political world that since the politicians supporting Prop 123 will be out of office in eight years or less, they care little that when this plan expires in ten years our school finances will be a mess and taxpayers will foot a huge bill.

Before being elected as Treasurer, I had never run for office.  Like many, I was frustrated with the poor financial decisions being made on our behalf, and took a huge pay cut to help our government make smarter decisions with taxpayer money.

We can do better.  We can solve the inflation funding lawsuit without raiding the Trust, provide higher pay to teachers, and save taxpayers from a huge fiscal cliff.  But the only way Arizona gets there is by voting NO on 123, as I will be doing.

-Jeff DeWit
State Treasurer of Arizona



About Jeff DeWit

Treasurer Jeff DeWit is a successful Financial Professional with over 23 years of experience.  He started his career in finance in 1992 at one of the largest brokerage firms in the country, moving up quickly to become one of Smith Barney's youngest fully licensed Investment Professionals.  In the mid-90s Jeff became a Market Maker in financial futures contracts as one of the youngest Full Members of the CME as well as a full member of the Chicago Board of Trade. In 1999, Jeff started a company called ECHOtrade, and during his 14 years as CEO grew the company to over 500 licensed professional traders worldwide with total volume in excess of a billion shares traded a month.  He developed one of the first software platforms that enabled market makers to trade off the exchange floor, and created some of the best real-time financial risk management software and algorithms.  He has a degree in Business Administration with a minor in Finance, and an accounting degree.

Treasurer DeWit is a loving husband to his wife and best friend Marina and adoring father to his three fun and energetic daughters.   

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