Ducey proposes spending sweeps, reductions and rosy revenues to fund teacher raise

Gov. Doug Ducey (Photo by Katie Campbell/Arizona Capitol Times)

Gov. Doug Ducey plans on funding a 20 percent teacher raise over the next three years with rosy revenue projections and a mix of funding sweeps, lottery revenues and spending reductions.

State budget analysts provided legislators an analysis of Ducey’s plan, which the governor announced on April 12 amid emphatic teacher protests and threats of a strike. The governor promised he would push for a 9-percent raise in 2018, to be followed by 5 percent raises in the next two years.

That plan would cost the state $240 million in fiscal year 2019 alone. By FY21, the cost rises to $580 million, according to budget documents obtained by the Arizona Capitol Times.

In fiscal year 2019, that includes $176 million added to the base funding formula for K-12 schools, and $64 million in one-time dollars meant to act as “bridge” to the adjustment in Proposition 301 approved by the Legislature. The Prop. 301 extension, approved in March, will shift $64 million in debt servicing to the Classroom Site Fund in fiscal year 2022, when the debt is paid off.

On top of those dollars, another $165 million would be added for teacher pay in fiscal year 2020, followed by $175 million in FY21.

To accomplish that amount of education spending, millions of dollars proposed for other state programs would be swept for education funding.

That includes $500,000 for the Attorney General’s Border Crimes Unit, $2 million in one-time funding for the developmentally disabled, $1 million for healthcare in private prisons and $8 million in one-time funding for Arizona universities.

Those are all spending priorities of legislative Republicans. In total, Ducey is asking the Legislature to give up on $48 million in new spending they’ve proposed in budget negotiations.

The governor’s office would also sweep $37 million in funds from other agencies, primarily the Department of Environmental Quality; collect $8 million in new Keno revenues;  increase the state’s hospital assessment, which pays for Medicaid expansion, by $35 million; and use $42 million in savings through the Arizona Health Care Cost Containment System and Department of Education, among other measures.

The governor’s staff also projects far higher growth in state revenues than budgets that have been drafted by GOP legislative leaders.

For instance, while budget analysts anticipate $46 million in new, ongoing revenues in the coming fiscal year, Ducey’s budget plans for $156 million.

All told, the governor’s staff scoured the state’s budget for $426 million in available dollars thanks to spending sweeps, reductions and new revenues.

Those dollars would go to more than higher teacher salaries.

While the Legislature is asked to give up $34 million in spending, some of Ducey’s other priorities are also fully funded under his proposal.

That includes $16 million to pay for his school safety plan, which the Legislature has yet to vote on; $28 million to the School Facilities Board to cover building repairs; and $15 million for prison health care, among other proposals.

A previous version of this story incorrectly stated Gov. Doug Ducey is asking the Legislature to give up $34 million in new proposed spending.