Gov. Doug Ducey signs spending plan that slashes education and the social safety net in order to provide huge tax cuts to corporations
There has been much weeping and gnashing of teeth since Gov. Doug Ducey, Senate President Andy Biggs and House Speaker David Gowan rammed through a $9.1 billion budget this month.
The complaints have been many. Arizona Education Association President Andrew F. Morrill said the budget "will keep our children at the bottom unless voters take action. This budget ignores the priorities of our citizens and shows no respect for the majority of parents."
The Arizona Board of Regents President Eileen Klein—a top aide in former Gov. Jan Brewer's administration—called the nearly $100 million in cuts to the state universities "a big blow," noting in a prepared statement that 63 percent of the state's budget cuts will be absorbed by the universities.
Dana Naimark of the Children's Action Alliance said the budget may be balanced, but "it lacks a greater vision for Arizona's children and families and future."
Tucson City Councilman Steve Kozachik said that "you can't take $50 million out of a local economy and expect it not have an impact. You take research dollars away from the UA and you lose researchers. You lose researchers and they move out of town. They move out of town and you have vacant housing stock. None of these things happen independently of one another."
Even Arizona Republic columnist Robert Robb—hardly a liberal voice—complained that the rushed process discredited the entire effort and asserted that the budget still remains out of balance, despite Ducey's claims to the contrary.
Ducey has defended both the process and the end result.
"This is the job Arizonans hired us for, and I'm proud we were able to get it done in a responsible, swift and bipartisan manner," said Ducey in a prepared statement. "This budget reflects the priorities I ran on and addresses the problems I was elected to solve. It restores much-needed fiscal responsibility to government by forcing the state to live within its means and stop spending money it doesn't have."
But critics of the budget say that it cuts too much from education while further reducing the social safety net meant to protect low-income Arizonans and pushing the cost of government from the state to the counties and cities.
Here are six things to know about the state budget:
1. Education Got Clobbered
K-12 education saw increases in some areas but reductions in others for a total increase of $81 million in the upcoming budget year. The state was required by formula to increase spending by $250 million, but lawmakers reduced a number of other funding programs by $169 million, according to a Joint Legislative Budget Committee summary.
The biggest cut was a general reduction of $117 million of what Ducey originally pitched as "non-classroom spending" by district, but by the final budget allows districts to decide where to cut those dollars.
Lawmakers also cut funding for district-sponsored charter schools, which will lose half of their funding this year and all of it in fiscal year 2017.
Also in fiscal year 2017, the state is cutting $30 million in support of Joint Technical Education Districts, which are designed to help students develop vocational skills. That's of particular importance to students who don't intend to go to college, but also helps some students get a head start on their college education.
Left unresolved is the outcome of an ongoing lawsuit over whether lawmakers have properly funded education based on population growth and inflation. So far, the Arizona Supreme Court has ruled that the lawmakers did not properly do so and the case has been sent back down to Maricopa Superior Court, where legal arguments are ongoing.
Higher ed took a bigger cut. The three state universities—UA, ASU and NAU—were slashed by $99 million. For the UA, that's a cut of $27.9 million.
UA President Ann Weaver Hart said that she was "deeply disappointed" in the cuts.
"All of us at the UA believe universities are a major economic driver for our state and are critical to our future," Hart said in a prepared statement. "The innovations and human talent generated by our great universities have shaped and will continue to shape the solutions to grand challenges faced by all of us. These cuts will have devastating effects on the University of Arizona, but we will continue to strive for excellence and serve the students who are at the heart of that future."
Pima Community College lost all its state funding, as did Maricopa Community College. Pima Community College Chancellor Lee Lambert said that given the state's ongoing budget problems, he had anticipated losing the roughly $6.5 million from the state at some point in the future, but to lose it all in one year was a surprise.
"If I'd had more time, I could adjust the glide path, versus losing it all at once," Lambert said.
In reaction to the loss of state funding, The PCC Board increased in-state tuition last week by $5 a credit hour, to $75.50.
Ducey defended the cuts to education, saying in a prepared statement that the budget spends more on education than ever before and "prioritizes education, with nearly half our overall budget going toward K-12 and universities."
House Assistant Minority Leader Bruce Wheeler (D-Tucson) took issue with Ducey's claim, saying that the governor didn't account for the fact that there will be more students enrolled in Arizona schools and the budget did not properly account for inflation costs.
"They may have increased it to a total dollar figure that's higher than last year, but on a per-pupil basis, spending went down," Wheeler said.
He called the budget "devastating" to the future of the state.
"There's nothing more important to the future of the state than education," Wheeler said. "The Tucson Chamber of Commerce came out against this budget and the reason is, they have members who say they can't hire a skilled labor force. This is going to saddle students with higher debt and discourage young people from pursuing a higher education."
2. Lawmakers Cut New Holes in the Social Safety Net
Dana Naimark of the Children's Action Alliance noted that the budget cut $11 million from the recently created Department of Child Safety, just one year after it was discovered that thousands of cases of child neglect had gone uninvestigated.
Naimark also criticized $4 million in cuts to childcare subsides for low-income families (although the Ducey administration says they'll make up for that with federal funds); a cut of about a half-million dollars for mental-health education programs; a sweep of housing assistance funds; a $3 million cut to youth treatment funds; and a new one-year lifetime limit for low-income Arizonans who qualify for the Temporary Assistance for Needy Families, which is the lowest limit in the nation.
"The budget backtracks on prevention strategies, puts more children at risk for child neglect, grows prisons while shrinking resources for higher education, and permanently reduces per student operational funding in public schools," Naimark said in a prepared statement.
3. Expenses Were Transferred to Counties and Other Jurisdictions
Expenses for juvenile justice, healthcare programs and other administrative costs were pushed down onto the counties. Among the new estimated costs for Pima County: An additional $1.7 million to share costs for juveniles incarcerated in the state system; $7.8 million for property-tax subsidies that the state will no longer be covering for the counties; $1.1 million to cover the cost of next year's presidential primary, which has traditionally been little more than a political beauty contest; $644,000 for state Department of Revenue administrative costs that the state is pushing on other jurisdictions; and $141,000 for a dental program for low-income Arizonans.
In total, Pima County Administrator Chuck Huckelberry estimates Pima County picked up an extra $12 million in expenses, on top of the $82 million that had been picked up by the county in recent years. That accounts for about 30 percent of all of the property taxes levied by Pima County.
"Lawmakers can have the luxury of saying that they're not increasing taxes, but they're forcing everybody else to do so," said Huckelberry, who has proposed adding a line to property tax bills identifying the percentage of county property taxes that are now sent to the state.
4. Prisons Were the Big Winner
While education and prevention programs were squeezed, the Arizona Department of Corrections budget increased by $39 million.
5. Corporations and Arizona's Wealthiest Citizens Got Tax Breaks
While Ducey has said that these budget decisions were tough but necessary, Democrats offered on major alternative: Delay the upcoming $112 million in corporate tax cuts that were set in place during the Brewer administration. Those tax cuts were set to be phased in with the idea that they would lure so many companies to Arizona and boost the economy so much that they would more than pay for themselves. Instead, they continue to reduce the amount the state collects; the Joint Legislative Budget Committee estimates that in fiscal year 2017, they will cost $190 million more than in the current year, and in the following year, they will cost $267 million more than the current year.
The tax cuts don't appear to have paid for themselves. Arizona's recovery remains sluggish, but the impact of the corporate tax cuts continue to grow.
Ducey said from the outset that postponing those cuts would not be fair to the corporations that are counting on them. Evidently, it's fairer to slash university funding, reduce programs that look out for disadvantaged, neglected and abused children, and starve public schools.
Ducey has signed another bill that cuts income taxes by adjusting the tax brackets to inflation. While the impact for the average Arizonan is next to nothing, the a legislative analysis estimates the legislation will cost the state $15.4 million in the fiscal year 2017 and $24.7 million in the following year.
Given that most Arizonans pay very little in state income tax, the majority of those savings will go to Arizona's wealthiest residents.
6. Bipartisan? Really?
Team Ducey knows that certain words sound very good to low-information voters. One of those words is bipartisan. It makes it sound as if the parties worked together to craft a compromise, so the end result can't be that bad.
Ducey has leaned hard on the use of the word "bipartisan" in describing his budget. It's technically true that one Democrat crossed party lines to support the spending plan: Sen. Carlyle Begay, who represents the Navajo nation. Begay managed to add a provision of $1.2 million for road work in his district.
Wheeler called claims of bipartisanship "ridiculous."
"There were more Republicans who voted against the budget than there were Democrats who voted for it," Wheeler said. "That was Sen. Begay. And there are strong rumors that he is going to change parties to become a Republican and run for Congress against (Democratic incumbent) Congresswoman Ann Kirkpatrick."