Ducey budget would shift money out of veterans’ fund

Gov. Doug Ducey wants to take more than $900,000 in funds specifically donated by taxpayers to help post 9/11 veterans to instead operate new cemeteries for veterans near Marana and Flagstaff and keep the doors open at an existing one in Sierra Vista.

Ted Vogt, the governor’s chief of operations, acknowledged that the state promised the federal government, which paid $15 million to build all three facilities, that it would find funds to operate the new facilities. But the budget proposal Ducey submitted to lawmakers Friday shifts the $929,400 from the Military Family Relief Fund.

Jon Altmann, who lobbies on behalf of the Association of the U.S. Navy, said fund dollars were solicited specifically to provide one-time help to those returning from the Middle East. That can range from remodeling a house to paying for airfare and lodging for a family member to get to the hospital where the wounded warrior is being treated.

He said this move was made without consulting veteran groups. And he said taking the already donated dollars for a new – and previously unannounced – purposes sets a bad precedent.

Dave Lucier, legislative coordinator of Unified Arizona Veterans, an umbrella organization of veteran groups, was more succinct in his objections to the raid.

“People donated to that fund thinking they were going to help improve someone’s life, not putting in the ground and burying them,” he said. “There’s a case for bait and switch to be made there,” he said.

Vogt said he doesn’t see the big deal, pointing out that the fund already has accumulated more than $5 million.

And Vogt said that, by law, anything left in the fund in 2018 will go to the separate Veterans Donation Fund. He said it has much fewer restrictions and can be used for the operating expenses of the Department of Veterans Services, which he headed until being named by Ducey to his leadership team.
Rep. Sonny Borrelli, R-Lake Havasu City, a veteran himself, acknowledged the fund balance.

But Borrelli said part of the reason for that is the difficulty of getting some projects approved, with a two-thirds vote of an advisory committee needed for anything costing more than $10,000. He already is crafting legislation to boost that to $20,000

Borrelli said he prefers to stick with the original intent of the law and the requirement to use donations for Middle East veterans. But he said he will withhold final judgment until he speaks with someone in the governor’s office later Tuesday.

Sen. Don Shooter, R-Yuma, also questioned the move.

“I’ve got to believe that whoever suggested that didn’t understand the situation,” said Shooter who chairs the Senate Appropriations Committee which has to approve the move.

But Vogt, a former Republican state lawmaker from Tucson, said the administration does understand the situation and made the proposal on purpose.

The 2007 law setting up the fund provides individuals with a dollar-for-dollar tax credit of up to $200 a year for donations, with the figure double for families. Donations are capped at $1 million a year as any credits amount to an equal reduction in what the state collects in income taxes.

The fund shift proposed by Ducey is just one of more than $300 million he is proposing to take from various agencies and funds to balance his $9.1 billion spending plan for the coming year without either raising new taxes or delaying previously approved corporate tax cuts that have not yet taken effect. Ducey said both are unacceptable.

Most immediately, some of these funds would be used to operate the Sierra Vista cemetery, the first state-run facility in Arizona. The federal government operates a national cemetery in Phoenix.

The federal government provides all the funds to set up state cemeteries if the state obtains the land and then agrees to the operating costs. For Sierra Vista, that is about $275,000 a year.

Vogt said plans are to have the two new cemeteries operating at the beginning of 2016. But he said staff needs to be hired by August, adding another more than $650,000.

Not paying for the operations means more than just burials will not occur: The deal with the federal government would require Arizona to refund the $15 million spent by the feds to build the facilities.

Altmann said the veteran groups were blindsided.

“If you’re going to come in and rob the piggy bank, can you at least tell us before you rob it?” he said.

Then there’s the precedent being set.

“If this a one-time deal?” Altmann asked. “Or are we opening this up for a regular shopping spree?”

And that, he said, creates another problem: It could dry up money needed for the returning vets.

“Donors that are out there may say, ‘Well, wait a minute: I was donating to guys who are still trying to have a life,’ “ Altmann said.

“We’ve done a lot of thinking about it,” said Vogt. He said it was his advice to Ducey – accepted by the governor – to move some of the money out of the Military Family Relief Fund into the Veterans Donation Fund.

“It has a lot fewer restrictions,” he said, like the ability to fund the cemeteries.

Vogt pointed out the VDF also has been used for things like programs for everything from homelessness to art therapy for veterans from all eras.

“So we do utilize these dollars for the living veterans,” he said. But he acknowledged these funds are being transferred for one purpose: cemetery operations.

Lucier already is marshaling the veteran community to object: He has planned a rally at the Capitol for Jan. 27.