- Associated Press - Friday, January 15, 2016

PHOENIX (AP) - Arizona Gov. Doug Ducey on Friday proposed only a modest state budget increase in the coming year despite a flush treasury, adding spending above what’s required to K-12 schools, boosting cash for the Department of Child Safety and adding $31 million for his new border strike force.

The bottom-line budget under the proposal released Friday increases about $300 million, from $9.2 billion this budget year to $9. 5 billion in the year beginning July 1.

The Republican governor wants the Legislature to approve $105 million in additional spending in the current year, with more money for school buildings, child safety, health services and a small amount for universities and prisons.

The governor also wants to add $10 million to the state’s rainy-day fund, bringing it to $470 million.

The budget doesn’t outline Ducey’s promised tax cut and acts as a starting spot for negotiations with lawmakers. Leaders of the Republican-controlled Legislature issued a joint statement with Ducey saying they were happy with the initial proposal.

Ducey’s proposal would boost overall K-12 funding to $3.9 billion. That total includes $224 million in new cash that was approved in an October special session to settle a school funding lawsuit. That proposal, which will tap $3.5 billion from the state land trust over 10 years, still requires voter approval at a May special election.

The budget plan provides required inflation and student growth increases of $46.5 million, plus another $44 million for new initiatives.

Those include a $30 million, three-year program to increase technical education, $6 million for schools that boost college prep courses and more than $10 million in all for a new education data system.

The increases to technical education are targeted to specific programs and won’t make up for a $30 million cut enacted last year that will hit technical schools starting in July. Lawmakers in both parties say that puts the many of the state’s special technical education high school districts at risk and they want that money restored.

“The superintendents I talk to say unless they get the full $30 million by March 15 they will be shutting down,” said Sen. Steve Farley, D-Tucson. “It’s flabbergasting that he would think to put this thing on a death spiral.”

Universities that took a $99 million cut in funding in the current budget will see only $8 million more in the coming year. Ducey staffers say they agreed to work toward reaching a 50-50 split between tuition and state funding for universities in the future. State funding currently covers about 34 percent of an in-state university education. In addition to the $8 million increase to last year’s $657 million in funds, Ducey expects $6 million in savings for universities through changes in debt service health insurance costs.

Eileen Klein, the president of the Board of Regents, said universities need to be the top priority if higher education is to remain affordable, but seemed pleased that cuts were off the table this year.

“Our reaction is first and foremost that the governor is no longer cutting the universities and is instead now reinvesting new state dollars into the university system,” she said.

Ducey’s $31 million investment in his border strike force includes $10 million for ongoing, $20 million in equipment and startup costs and $1.5 million to help county sheriffs.

Prisons will continue a shift to privatization, with 2,000 new beds budgeted in the coming two years.

Ducey promised a move to cut prison population growth in Monday’s State of the State address, saying he wanted a new community correction facility in Maricopa County to handle parole violators. His budget contains a scant $1.6 million for that program. Prisons overall get nearly $1.1 billion.

The Department of Child Safety, mired in ever-increasing caseloads, backlogs and high turnover, will get an additional $48 million this budget year and $39 million in the proposed budget. Changes to operations and also frees up cash, bringing total new spending to $134 million. The department received $356 million this budget year.

The budget also makes good on Ducey’s promise to help people on the state’s welfare program get back to work. His budget proposal includes $24 million in job training, tuition reimbursement and rehabilitative technology services to aid disabled workers. The state would put up about $5 million for the program matched by $19 million in federal funds.

The new Department of Economic Security spending on training is offset by $25 million Ducey wants to take from the state’s welfare program, known as Temporary Assistance for Needy Families, which has a surplus as the result of reducing the state’s Cash Assistance program from 36 months to its current 24-month limit in August 2012. A further reduction to just one year of eligibility, takes effect on July 1.

State employees won’t get a pay raise again this year, continuing a pattern that began in 2009. State wages now are nearly 19 percent below those in the overall job market, according to the Department of Administration.

The state treasury is expected to have a $499 million surplus on June 30 before Ducey’s proposed supplemental appropriations. By June 30, 2017, that number should swell to more than $600 million. Still, Ducey spokesman Daniel Scarpinato said he’s treading cautiously and noted much of the new spending is for one time initiatives.

“It’s very important to this governor that we maintain structural balance and reach structural balance and don’t go on a spending spree,” Scarpinato said. “So we’re responsibly investing in these programs but we’re not going to obligate the state to a bunch of new spending we can’t afford in the years ahead.”

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