Arizona Gov. Ducey's budget plan focuses new cash on schools

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Governor Doug Ducey released his executive budget for the fiscal year 2019 on Friday. The $10.1 billion budget focuses significantly on adding more dollars to K-12 education.

[READ MORE: Gov. Ducey plans to add $100M in capital funding for schools

Arizona Gov. Doug Ducey's spending proposal for the coming fiscal year skips his previous practice of sprinkling new K-12 education spending among a series of small initiatives, instead focusing nearly all the new cash into three big pots of money designed to restore cuts he himself helped to enact.

The budget plan release Friday pushes $100 million into a funding stream that pays for school capital costs as part of five-year plan to fully restore $371 million in cuts made since the Great Recession. More than $117 million of those capital cuts occurred under Ducey's first spending plan in 2015. He also wants $35 million in new cash for building overhauls and another $88 million for new school construction.

The Republican governor touted the new spending on computer software, textbooks and other so-called "soft capital," needs earlier this week, but education advocates slammed it as too little when K-12 schools receive much less now than they did pre-recession.

"Restoring the district and charter school additional assistance funding that Governor Ducey and the Legislature cut in fiscal year 2016 is a necessary reinvestment in Arizona's K-12 public schools," a coalition of education groups called AZ School Now said in a statement. "However, this closes only a small portion of the funding gap that has persisted since the recession. Under the governor's proposal, public school operational funding would remain $950 million below 2008 levels."

The state is being sued by a group of schools, education groups and citizens for cuts that forced schools to use operations cash for the capitol cuts, and a judge in Phoenix heard the first arguments in the case Friday but issued no decision. Ducey says his new spending should be enough to settle the case.

In all, the $10.1 billion plan for the budget year that begins July 1 boosts spending by more than $300 million over the current budget. The 3.2 percent spending boost is below the combined metric of inflation plus population growth.

Much of the new spending is possible because of a combination of rising state revenue, transfers from other funds, eliminating funding for vacant state jobs and other agency savings that adds up to $237 million.

"The governor ran on reducing the size of state government and finding efficiencies," Ducey spokesman Daniel Scarpinato said. "I think it says a lot about the culture that we've created in this government that we went in partnership to our agency directors and said we want to put more money toward K-12 education, help us find savings. And they did."

Other key education initiatives identified in the budget plan include $34 million for the second year of a teacher raise enacted last year, bringing the total raise to 2 percent. In addition, the budget plan puts that case into base school funding, making it permanent and eliminating criticism that the raises were merely a one-time "stipend." He also wants $8.1 million for new teachers for deaf and blind students, a computer science pilot program and expanding early literacy.

Universities will see essentially flat spending, but the budget includes the $27 million promised to pay interest on a $1 billion construction bond package approved last year and $8 million in extra capital and operations cash.

The governor also hopes to save $2.5 million a year by eliminating three-month retroactive coverage for Arizonans who are identified as eligible for the state's Medicaid program during a hospital visit. They instead want that coverage only to cover the current month. The state applied to the federal government this week for a waiver to enact that plan.

The cut will mainly affect hospitals, but Scarpinato said it should not harm patients.

Ducey also wants to bring in $55 million by boosting tax collection enforcement, including paying a contractor to mine data that would identify tax cheats and hire 25 new auditors. The move comes nearly two years after the state Department of Revenue laid off 50 workers, including many auditors. The layoffs led to warnings about lost tax revenue from Democrats and an economist who advises the state.

Scarpinato declined to say if the decision to boost the ranks of auditors to bring in $25 million in additional tax collection is an admission that the layoffs were a mistake.

"I would acknowledge that there are more dollars to be had moving forward," he said.

Other new initiatives laid out in the budget plan include new money for a border security strike force Ducey created two years ago, nearly $16 million to fund adoption subsidies, $1.4 million to add state troopers on Phoenix freeways at night to stop wrong-way drivers. The governor also wants to boost highway repaving projects and spend $24 million for a new National Guard readiness center in Tucson.

You can watch the Executive Budget public hearing HERE.

Highlights of Governor Ducey’s Budget Plan: 

  • Invests $284 million in K-12 education above and beyond $116 million in inflation and enrollment growth funding, resulting in a total of $400  million for public schools in the FY 2019 Executive Budget. Over 80 percent, or $200 million, of new discretionary General Fund spending (including FY 2018 supplemental funding) is focused on K-12 education; 
  •  Includes a commitment to phase in over five years a full restoration of $371 million in Additional Assistance; 
  • Caps payments to private operators in order to provide additional dollars to public education; 
  • Provides a total of $15.8 million to fully fund the record increase in adoptions; 
  • Continues support for “Second Chance” initiatives to reduce prison recidivism, including $2.4 million to the Department of Corrections for  expanded substance abuse, educational, and employment center services; 
  •  Adds resources for an enhanced Wrong-Way Driver Night Watch to improve response times to wrong-way and impaired drivers; 
  • Ramps up the Border Strike Force with a two-year phase-in of 24 new State Troopers, providing 24/7 highway patrols in Southern Arizona. 
  • Provides $15 million in tax relief to Arizona veterans who receive retirement benefits, phased-in over two years; 
  • And maintains structural balance.

The complete budget can be viewed at

[RELATED: Arizona school advocates react to Gov. Ducey's education funding plan]


Superintendent Diane Douglas Applauds Governor's Budget Proposal
"It is great to finally see a path forward to restoring recession-era cuts to Arizona’s school facilities,” Superintendent Douglas said. “It was most encouraging to see one of the plaintiffs in the pending school facilities lawsuit discontinue its litigation in response to this proposal. 
“I have always preferred paying teachers instead of lawyers. I am pleased to join Senate President (Steve) Yarbrough, House Speaker (J.D.) Mesnard, as well as local school superintendents and officials in supporting the plan.” 

Statement from Dawn Penich-Thacker / Save Our Schools AZ
“Governor Ducey‘s budget may sound good, but it keeps Arizona teachers the lowest paid in the nation and it keeps Arizona’s classroom spending next to last in the nation. It’s big on talking points, but it doesn’t deliver results. Our state deserves better.”

Statement from ABOR President Eileen Klein:
“Both K-12 and higher education are paramount to a thriving economy, competitive workforce and strong future. Governor Doug Ducey’s budget proposal clearly prioritizes public education. We appreciate his support and value his ongoing commitment to bolster our public universities in setting these priorities for our state.
“Last year, the governor and Legislature made possible a landmark $1 billion investment in Arizona’s public universities to support critical research and development infrastructure at Arizona State University, Northern Arizona University and the University of Arizona. The executive budget released today keeps this commitment to long-term capital investment so we can continue to serve the state’s growing population.
“The majority of our students come from Arizona. But with a growing economy and rising workforce expectations, we need even more students throughout our state who are prepared to learn after high school. We are pleased that the governor’s budget again makes K-12 education the largest beneficiary of new state dollars over the coming year to help more students get the education they need to prepare
for work and college.
“Our state leaders play a critical role in helping to keep a college education within the reach of all families. In the days ahead, the Arizona Board of Regents will consider the governor’s budget recommendations in greater detail. We will remain in close contact with the governor, legislators and staff members throughout the budget process and – as always – remain committed to ensuring the voices of Arizona students and families are taken into account as the state budget is finalized.”

Mike Cowan, Superintendent of Mesa Public Schools, said the plan will mean $27 million to his school district upon full implementation.
"This money will be used to fund important resources for our students: textbooks and technology, and safe learning environments for our teachers and students,” he said. “These are real dollars that will be put into the system now to help the students that we’re currently serving. I’m proud to support this plan and have great faith that legislators and policymakers will support this significant education plan.

Camille Casteel, Superintendent of Chandler Unified School District, also supported the plan.
"The proposal that Governor Ducey has announced today will impact all students regardless of their education choice, socioeconomic status, or place of residence,” she said. “Restoring this formula will help every child in Arizona and will provide the much-needed relief immediately to the operation portion of the formula which some districts like ours will be fortunate to redirect toward teacher salaries. Chandler is in a unique position as we continue to experience growth and have a community who has locally supported us. Even with that, we have redirected dollars from operations to capital to meet the needs of our schools."

Calvin Baker, Superintendent of Vail School District, said the plan directly addresses the priorities of school leaders.
“Governor Ducey has heard the voices of public school leaders, responded to our priorities and come up with a plan that is a very significant step towards better funding and thus more opportunities for our students,” he said. “Now is the time for action to occur on this issue of capital funding. We can’t afford to wait any longer. We have come together for solutions in the past and clearly, there is a need for us to come together to solve funding problems that loom in our future. That is why I am supporting the governor’s plan and I am encouraging others to do the same.”

St. Mary’s Food Bank Alliance supports Gov. Ducey’s  plan to improve healthy food access to Arizonans in need
"For the past decade, St. Mary’s Food Bank has worked hard to improve the healthy eating habits of its clients by rescuing more Arizona produce for distribution to those in need.
"In just the past year, St. Mary’s distributed more than 40 million pounds of fresh fruits and vegetables – four times the total of just five years ago -- to provide struggling families with better-balanced diet options.
"This important endeavor doesn’t come without its challenges. Specifically, there is the added cost of transportation and the necessary added expansion of cooler space to adequately maintain and store perishable produce so it can remain fresh for the families who are so pleased to receive it.
"In that vein, St. Mary’s wholeheartedly supports Gov. Doug Ducey’s FY 2019 budget proposal to provide $1 million in grants for Arizona food banks to increase both transportation and refrigeration capacity efforts needed to insure these important foods reach as many the state’s hungry as possible. 
“The Governor has personally rolled up his sleeves and taken part in our annual Thanksgiving distributions for the past three years. He has seen up close how important a role Arizona food banks play in not only feeding Arizonans but providing healthy food options,” St. Mary’s President and CEO Tom Kertis said. “But getting this food from the farms to tables around the state require an investment in capacity for produce. These grant opportunities will help food banks across the state so that they, in turn, can help the one in five Arizona families that struggle to feed their children.
“We thank Gov. Ducey for recognizing the ripple effect of what these grants can do for so many. Every pound of nutritious produce that can be rescued and distributed will give the most vulnerable in our community healthy eating options.”

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The Associated Press contributed to this report.