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Strife ahead as FY18 budget takes shape

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A Republican budget plan set for its first vote today would give Arizona teachers a pay hike more than double what was proffered by Gov. Doug Ducey.

But Democrats want to double that again. And they may just have the leverage this year to get their way.

Ducey had sought a state-funded pay hike of just 0.4 percent this year for teachers, with a promise of similar increases for the following four years. That proved a non-starter, even for GOP leaders, who said that amount — about a dollar for each day in the school year, before taxes — was insufficient to deal with the teacher shortage.

Their plan is simpler: An immediate 1 percent pay hike, with an identical amount again next year.

But House Minority Leader Rebecca Rios said anything less than a 4 percent increase for teachers, who are among the lowest paid in the country, is unacceptable. She pegged the cost to do that at an additional $34 million.

Republicans say they don’t have that money. But Rios remains unconvinced.

“Where there’s a will, there’s a way,” Rios said.

“I keep hearing, ‘It’s going to be a pro-education budget,’ ” she said. “Well, put your money where your mouth is.”

What Rios has working for her and fellow Democrats is the demand by Ducey to allow universities to borrow up $1 billion.

The current version of the plan is to allocate $27 million this coming year for bond payments, with a commitment of additional dollars for the next 25 years. And in a bid to calm GOP queasiness, House Speaker J.D. Mesnard said he is building in safeguards, including a requirement that universities get prior approval of the Joint Committee on Capital Review, composed of lawmakers, before spending any of that cash on new projects.

Even with that, Mesnard conceded there may be insufficient Republican votes in the House or Senate — or both — for that plan. And that means he needs Democrat support.

Rios said members of her caucus are willing to help. But there’s a price tag for all that.

The first, she said, is that 4 percent pay hike for teachers.

That goal got a publicity boost of sorts on the heels of comments last week by House Majority Leader John Allen when he was explaining his vote in favor of easing certification requirements as one method of dealing with the teacher shortage, a method other than pay hikes.

He acknowledged some teachers have second jobs to help make ends meet. But Allen said a second job does not mean someone is struggling.

“The idea that we are somehow torturing somebody if they have a second job is just ridiculous,” Allen said, noting that most teachers have a summer break. And he said that people often take second jobs to improve their lifestyles, improve themselves or “want to pay for a boat.”

The backlash included a “regatta” Tuesday of teachers showing up with toy boats and inflatable rafts, accusing Allen of being insensitive.

Allen was more contrite on Tuesday, saying he “clearly picked poorly” in how he expressed his view that not everyone who gets a second job does so because they can’t live on a single salary. Still, Allen accused those at the rally outside the House of “trying to leverage one statement” to suggest he and other Republicans do not care about teachers or pay.

Rios and Democrats have a second demand for their votes for the university bonding proposal: restore eligibility for the Temporary Assistance to Needy Families to where it was two years ago.

At that time, Arizona was at among the bottom of all states, with benefits capped at 24 months. Lawmakers approved — and Ducey signed — a measure to slash that in half, putting Arizona dead last.

In January, the governor reversed course and said the two-year limit is more appropriate. But the legislation to do that contains a series of what the Democrats call traps, where a single mistake by a parent would cut off payments.

Rios said Democrats want a “clean” restoration.

She acknowledged that Democrats generally can be counted on to support university funding. And she conceded that their failure to support the $1 billion bonding plan might mean the universities don’t get the dollars that they say they need.

But Rios said members of her caucus are willing to live with that.

“Right now I think it’s kind of hard to justify giving a billion dollars in bonding to the universities when we have this lawsuit because we’re not paying for K-12 schools that are falling apart,” she said. That refers to litigation filed Monday saying the legislature is not complying with a series of Arizona Supreme Court rulings that require the state to be responsible for school construction and repairs rather than leaving that obligation with local districts.

“Democrats have always been supportive of K through universities,” Rios continued. “But when you start prioritizing what are the real timely needs, university building doesn’t come first or second on the list.”

There are other potential speed bumps before the budget can be approved.

One priority for both Ducey and many Republicans is a tax cut.

There is legislation to index the personal exemption for individual income taxes.

Arizona law permits individuals to exempt $2,100 of their income from taxes. That figure is $4,200 for taxpayers filing jointly, and $6,300 for taxpayers filing jointly with at least one dependent.

The proposal would adjust that figure, retroactively to the beginning of the year, a move that would show up when Arizonans file their 2017 returns next year.

State budget staffers figure the change will mean an immediate $2.9 million reduction in revenues. But that figure will grow each year as inflation increases.

The main thing the provision does is allow Ducey to keep his promise during the 2014 gubernatorial campaign to lower income taxes every year he is in office.

That tax cut, though, is technically not part of the budget package lawmakers hope to approve before Friday but is its own separate legislation. And that is causing some concern among Republicans it might not make it to the finish line, especially with other demands for the cash.

Mesnard, however, said he is committed to seeing the House-passed bill get through the Senate.

The budget package, however, does contain something else not in Ducey’s January budget proposal: About $30 million earmarked for road construction and repairs.

Such funding usually comes from gasoline taxes and vehicle registration fees. But Ducey’s budget plan diverts those dollars to instead help fund the state Department of Public Safety, a move that frees up other tax dollars for other priorities.

Lawmakers are getting around the problem for the short-term by raiding another fund at the state Department of Transportation for the road dollars.

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