Hank Stephenson and Ben Giles//April 8, 2016//[read_meter]
Hank Stephenson and Ben Giles//April 8, 2016//[read_meter]
Senate President Andy Biggs wants to introduce a budget as early as next week, but House Republicans fear their chamber isn’t keeping up the pace, and House priorities could end up once again trampled in the Senate’s budget stampede.
In recent weeks, budget spreadsheets have started circulating at the Capitol – a telltale sign that negotiations between legislative leaders and the governor were getting serious enough to let rank-and-file lawmakers peak behind the curtain at the budget plans hammered out in both chambers.
And Gov. Doug Ducey is prodding lawmakers along, issuing a warning that he wants the budget done before lawmakers send him any more policy bills.
The Senate spreadsheets came first, revealing a modest increase in spending over last year’s budget – $9.4 billion in fiscal year 2017, compared to $9.3 billion in the current fiscal year – but less spending than Gov. Doug Ducey called for in his January budget proposal. The governor’s budget was built on total revenues of $10.1 billion, but the Senate took a more skeptical approach and settled on about $9.84 billion.
That figure also includes $30 million in lost revenue for a “tax package,” likely referring to the amount of still-unspecified tax cuts Ducey intends to implement this year.
The Senate’s proposal would leave the state with an ending balance of $426 million and a structural imbalance of $10 million.
Biggs said it would be his “dream” to start moving the budget through the upper chamber as early as next week.
Shortly after the Senate spreadsheets appeared, House spreadsheets started to trickle out.
Unlike budget negotiations in previous years, the two documents were similar.
The House begins fiscal year 2017 with about $24 million more in starting cash, due to the Senate’s expectation of an additional $24 million in spending this year. House spreadsheets detailed about $18.4 million more spending than the Senate, less than a 0.2 percent increase.
But the House spreadsheet provided is only partially done, GOP leadership told rank-and-file lawmakers. Leadership characterized the document as part of an ongoing conversation.
And the document doesn’t include funding for a handful of issues that many House Republicans are rallying around.
Republican Rep. JD Mesnard, R-Chandler, said from conversations he’s had with other Republicans, he knows that many in his caucus are pushing for more one-time spending for universities and K-12 education.
“I know there are a number of issues that remain unresolved that are of interest to a majority of the caucus. And hopefully those are going to be brought up. Because they’re not reflected in the documents yet,” Mesnard said.
Mesnard said many of his fellow Republican lawmakers are pushing for a partial restoration of last year’s cuts to universities and some one-time spending for K-12 education. Last year, Ducey initially called for a $75 million cut to higher education, but then signed a $99 million cut from the state’s universities instead.
Now, some Republican lawmakers want to reduce the cut by about $24 million, bringing it in line with what Ducey originally proposed last year – a figure officials with the Arizona Board of Regents said they could stomach.
Other House Republicans, especially some of the freshmen who had just survived their first all-nighter at the Legislature, felt they had been sidelined in crafting last year’s budget and pressured into voting for it.
Lawmakers at the time complained they hadn’t had time to thoroughly understand the bill or an opportunity to mold the document. Legislators may also still be smarting from a public outcry over the FY16 budget, which kept K-12 spending mostly flat, leaving Arizona schools among the worst-funded in the nation despite a rebounding economy and better-than-expected revenues.
Fueled in part by that criticism, lawmakers gathered in a special session last fall to approve a $3.5 billion 10-year spending proposal for K-12 education.
But that plan required a constitutional change to draw more money out of the state land trust, so it still needs voter approval at a special election in May as Prop 123. In the meantime, some Republicans argue the state can afford some one-time spending to bolster K-12, and are rallying around a few key one-time spending areas with a total somewhere in the neighborhood of $40 million.
Many House Republican lawmakers have also been advocating for roughly $31 million to cover cuts to schools as the state transitions into a new funding formula, adopted last year. The formula calculates student enrollment based on current year figures, as opposed to the previous year — which saves the state money in the short term, as enrollment has declined.
Many of the same Republicans are also rallying around funding for district sponsored charter schools and for small schools, to the tune of about $10 million.
The House budget documents didn’t even reflect spending priorities from House Speaker David Gowan, R-Sierra Vista.
Gowan has been pushing for funding for The University of Arizona veterinary school and a veteran’s home in Flagstaff. Although both are listed as line-items on the House spreadsheet, neither had any funding attached.
Complicating the negotiations, Biggs, R-Gilbert, is reluctant to add any spending beyond what the Senate outlined. He cautioned any new spending beyond the Senate plan could drag-out the budget’s structural imbalance beyond FY18.
Biggs said the state budget is “still fragile,” and “any hiccup at all in the economy” could drive the state right back into a major deficit.
“I’m not saying you can’t expand a little bit, but you still have to be wise about it,” he said.
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