By David Bier

Arizona’s Teacher Strikes: The End or Just the Beginning?

July 19th, 2018 in Analysis, Budget & Appropriations, State Legislation

For six school days in late April and early May, teachers across the state of Arizona walked out of their classrooms to demand better pay, more classroom funding, and other concessions from governor Doug Ducey (R) and the Republican-controlled state legislature. These teachers, inspired by similar walk-outs in West Virginia, Oklahoma, and Kentucky, brought their “outside voices” together to call for change. In the early morning hours of May 3, Ducey signed the new state budget that gave teachers a raise. But, the bill fell short of meeting the walkout organizers’ other demands. Some have said the #RedforEd movement failed because it did not deliver on all of the group’s demands. Still, this strike was just the beginning.

It is important for me to be transparent about my personal connections to this issue. My mother is a life-long public school teacher, who recently retired after over 25 years of teaching in schools across Arizona. As part of Teach for America, I spent three years teaching in the Littleton Elementary School District, the same district where #RedforEd organizer Noah Karvelis teaches, although Mr. Karvelis started teaching after I left for law school. During my first two years of teaching, I earned my Master’s degree in secondary education from Arizona State University. And while I moved across the country to attend law school in Boston, I have kept in touch with many of my former colleagues in Arizona.

The issues with education funding in Arizona started in 2008, while the country was reeling from the recession. As states across the country scrambled to fix their budgets, Arizona’s schools took a big hit. Ten years later, while the economy has recovered, funding for Arizona’s schools didn’t. According to a report by the state’s auditor, schools were receiving less inflation-adjusted dollars per student in 2017 than they were in 2008. During that time, the state has seen its income limited by a number of tax cuts, the largest of which have gone to corporations. Despite promises, economic research has indicated that the cuts have not stimulated economic growth, resulting in decreasing government revenue. All this has translated into horrible conditions in many schools across the state.

The combination of the lowest teacher salaries in the country, low education funding, and successful walkouts in other states urged Arizona’s educators to take action. The group Arizona Educators United, which started the #RedforEd movement, laid out five demands: 20% raises for teaching & certified staff; pay raises for classified staff (janitors, paraprofessionals, secretaries, etc.); restoring classroom funding to 2008 levels; no new tax cuts until Arizona’s per-student funding reaches the national average, and annual raises for teachers until salaries reach the national average.

The movement’s hashtag, #RedforEd, started as a way to draw attention to the lack of education funding. Teachers began with “walk-ins” – they arranged to arrive at school early and stand just outside their school’s gates, wearing red shirts and waving signs. The walk-ins were aimed at building community support. Teachers also protested outside the capital during a “teach-in” on March 28 after the school day ended. The walk-ins continued for another month and, when the state legislature wasn’t receptive, the strikes began on Thursday, April 26.

Arizona State Capitol
Phoenix 1901

After nearly 13 hours of debate, Governor Ducey signed a new state budget that included nearly $273 million for teacher pay raises. That will only amount, however, to a 9% raise this year. Governor Ducey has plans to provide 5% raises in each of the next two years, in addition to the 1% raise teachers saw at the start of the last school year. But, this plan has a big problem. The legislature passes a new budget each year. So, while Ducey has “plans” to provide a 20% raise by 2020, that plan is completely out of his control because the decision ultimately lies with the legislature.

There are a number of other concerns that the teachers have with Ducey’s deal. The budget does nothing to raise per-pupil spending, increase pay to support staff, or reduce the state’s student-to-counselor ratio. While the American School Counselor Association recommends a ratio of 250 students per counselor, Arizona averages 924 students per counselor. A Democratic representative, Mitzi Epstein, had offered an amendment that would mandate a 250:1 student-to-counselor ratio, but the amendment failed.

While the budget itself certainly contained far less than #RedforEd supporters had hoped for, the fight is far from over. There are a number of ballot measures this November that could take Arizona’s education system in radically different directions. First, Proposition 305 asks voters whether they want to keep Senate Bill 1431 in place. That bill expanded what are formally called “Empowerment Scholarship Accounts” (“ESAs”) but more commonly known as school choice “vouchers.” While the two terms are not mere synonyms because they allocate money somewhat differently, the net result is that ESAs may be used by parents to send their child to private schools (including religiously affiliated schools). The money for ESAs is taken from public schools which, as stated, are grossly underfunded.

Organizers are also seeking petition signatures to place another initiative on the ballot related to education funding. The “#InvestInEd” ballot measure, which has not been given a number yet because it is not yet formally on the ballot, calls for tax increases on income over $250,000 for individuals or $500,000 for married couples. The web page in support of the ballot measure states that “[t]he higher rates are only paid on the income above those amounts.” Perhaps most importantly, funding secured through a ballot measure such as this one “cannot be taken away by the legislature.”

Finally, the #RedforEd movement has even driven some teachers to take more direct action. After spending nearly a week at the Capitol pleading with legislators to take action, several educators are running for elected positions themselves. The article by the Arizona Capitol Times identified former teachers running as both republicans and democrats for positions in the state house and senate, as well as local school boards.

The flurry of activity around education funding in Arizona makes a bold statement: this issue is not going away. While the strikes may be over and the new budget is signed, teachers have made clear that this will be a big issue come November. Beyond the ballot initiatives and teachers running for elected office, Governor Ducey is up for reelection. The #RedforEd movement unquestionably fell short of their goals – the last answer on the Arizona Educators United “FAQ” page makes that clear. But, to say that the movement died when the strikes ended is to underestimate the political will of angry teachers. Time will tell, but I think the movement for education improvement in Arizona is far from over.

David Bier anticipates graduating from Boston University School of Law in May, 2019.

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Data Breaches: A Growing Problem, but Will Congress Act?

July 10th, 2018 in Analysis, Federal Legislation, State Legislation

Data breaches are a growing and ongoing concern. As of the modern economy relies more heavily on web-based services, hackers throughout the world are finding innovative ways to exploit this new technology for their own gain. The big question is: will Congress act to address the problem?

Recent data breaches have drawn the ire of members of Congress, including the Equifax hack and Facebook’s privacy issue with Cambridge Analytica, largely because of perceived wrongdoing or an inadequate response on the part of the breached company. Data breaches are tricky because, on the one hand, the breached company is the victim of a criminal act which should be investigated and prosecuted. But, on the other hand, to the extent that a company is breached because it was negligent or even reckless in failing to patch a known security flaw, some kind of legal consequence seems appropriate. Crafting a legislative response to address data breaches is an intricate matter that begins with an important question: as a matter of federalism, are data breaches a state or federal concern?

A vast majority of states have laws on the books requiring a breached company to take some kind of action after a security breach. These laws define “personal information” and require that notice of the breach is given to either breached consumers or a state government entity such as the Attorney. States wielding their police power to regulate the response to data breach incidents makes sense because data breach litigation is usually focused upon a theory involving negligence, privacy invasion, or breach of a fiduciary duty (Solove & Citron, at 8). Each of these causes of action are firmly rooted in state law. Yet, the patchwork approach to data breach legislation leaves many companies scrambling to comply with very different laws in the various jurisdictions where individuals with breached data reside.

Yet, many data breaches end up litigated in federal court. The most common reason for this is the Class Action Fairness Act (28 U.S.C. §§ 1332(d), 1453(b); “CAFA”), which provides a federal forum to claims where the parties maintain minimum diversity (at least one plaintiff located in a state different from at least one defendant) and an amount in controversy of at least $5 million. Because many data breaches impact a disparate plaintiff class residing throughout the country, and because the sought-after remedy is much larger than $5 million, these cases are frequently removed to federal court.

Other data breaches are litigated in federal court from the start, with causes of action arising under federal statutes. Claims are often brought under Fair Credit Reporting Act (15 U.S.C. § 1681 et seq., “FCRA”), which requires companies that send information to credit reporting agencies to take “reasonable procedures” to protect the confidentiality of sensitive personal information. The federal government also regulates data security in several industries, including the healthcare industry through the Health Insurance Portability and Accountability Act (Pub. L. 104–191, “HIPPA”) and the financial services industry through the Gramm-Leach-Bliley Act (Pub. L. 106–102, “GLBA”). Lastly, the Federal Trade Commission (“FTC”) regulates some data security matters pursuant to the agency’s authority to prosecute unfair competition.

These statutes make clear that the federal government has some role to play in the data security sphere, and with good reason – data security can quickly become a matter of national security. First, many data breaches are thought to involve state-sponsored actors, implicating international law and sovereignty concerns. Next, data breaches can give rise to other federal crimes, including identity fraud (Internet Research Agency Indictment; Counts 3-8 at ¶¶ 96-98). When that identity fraud was apparently perpetrated with an intent to interfere in America’s free and democratic elections, the concern is only exacerbated.

So, what can Congress do to address this issue? While the problem is very complex and requires an equally complex response, Congress often prefers to address problems in a piecemeal fashion. There have been two bills put forth, one from Senators Nelson, Blumenthal, and Baldwin, and another from Senators Warren and Warner. It is important to note that the two bills cover different topics under the greater umbrella of data privacy – they are not mutually exclusive and they are not merely two different solutions to a single problem.

Senator Nelson’s bill, called the Data Security and Breach Notification Act, would require the FTC to establish minimum “policies and procedures regarding information security practices for the treatment and protection of personal information.” § 2(a)(1). This bill includes provisions that exempt financial institutions in compliance with GLBA, but it covers a large number of different organizations and industries. It also creates a series of new penalty provisions authorizing fines up to $5 million for infractions. Notably, § 7(a) dictates that this bill would preempt state information security laws. This provision is sure to be unpopular with certain states, especially those (like Massachusetts) that have been proactive in regulating data at the state level (see the testimony of Sara Cable, Assistant Mass. AG, to the U.S. House of Representatives’ Financial Services Committee, Part II.C, page 4).

Senator Warren’s bill has a narrower scope, addressing only “credit reporting agencies” with annual revenue “not less than $7 [million]”. § 2(4). After the Equifax breach announced in the Fall of 2017, the credit reporting agencies themselves became the focus of new scrutiny. Given the immense volume of sensitive information that these agencies possess, and their critical role in our financial system, it makes sense that these entities should satisfy more exacting standards. Senator Warren’s bill would establish an “Office of Cybersecurity” within the FTC, and that office would be charged with promulgating regulations and investigating non-compliance with those regulations. §§ 3(b)(B), (D). The bill also contains a fairly restrictive notification requirement – mandating that covered credit reporting agencies alert customers within 10 days after a breach. § 4(a). Such notification requirements present interesting policy question. On the one hand, the sooner customers know of a breach, the sooner they can take action to prevent identity theft and fraudulent use of their finances. On the other hand, in countries like Australia that have recently implemented mandatory notification laws, companies have expressed concern that such a notification would amount to an “admission of guilt” that may come back to haunt the company in subsequent litigation.

Though there are many issues underlying data privacy and security, one thing is clear – something must be done. Because these bills address different areas of cybersecurity, they should both pass. Even if that were to happen, much more needs to be done. States undoubtedly have an important role to play, but it is much faster and more efficient for federal legislation to address an issue like this that impacts citizens nationwide. But, what precisely needs to be done, however, is a much more complex question. The 115th Congress has been derided for its lack of action on many important issues, including an immigration fix for DACA recipients and addressing firearms in the aftermath of the Parkland shooting. So, will anything actually happen? Only time will tell.

David Bier plans to graduate from Boston University School of Law in May 2019.

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