Quantcast
Home / Featured News / Ducey, Legislature scrape together revenues for $10.4 billion budget proposal

Ducey, Legislature scrape together revenues for $10.4 billion budget proposal

State lawmakers are moving to adopt a $10.4 billion spending plan for the coming fiscal year, balancing the books — and finding the dollars for a teacher pay hike plan — at least in part by passing along expenses to some local taxpayers.

The budget is built on the premise that additional auditors at the Department of Revenue and other tax enforcement measures can bring in an additional $55 million. It also relies on getting an extra $35 million out of hospitals, saving $52 million in prescription drug costs and taking $20 million from a consumer fraud settlement that Attorney General Mark Brnovich is negotiating with Volkswagen.

And there’s something else: Taxpayers in 17 school districts will pay more in local taxes through an accounting maneuver on desegregation programs.

The two districts most affected are Tucson and Maricopa unified school districts. But a political maneuver by Sen. Steve Smith, R-Maricopa, will protect taxpayers in that district, leaving only Tucson residents with a big hit.

FILE - In this Jan. 22, 2018, file photo, Arizona Gov. Doug Ducey speaks prior to signing the order calling the Legislature into a special session at the Capitol in Phoenix. Arizona Gov. Ducey is pushing lawmakers to approve his proposal for big teacher raises Monday, April 23, 2018, as school districts make plans to shut down if educators statewide walk off the job as planned this week after calling the Republican governor's plan insufficient. (AP Photo/Matt York, file)

Gov. Doug Ducey  (AP Photo/Matt York, file)

This spending package has enough leeway to allow Gov. Doug Ducey, up for reelection this year, to keep the promise he made when he was campaigning for office four years ago to cut taxes every year.

The plan increases the amount that those receiving military pensions can exempt from state income taxes. The figure is currently $2,500.

But that increase will be to just $3,500 rather than the original $10,000 proposal the governor made in January. And it has a delayed effective date on that until 2020.

And there are some other carrots in the package for various political interests.

 

The package also includes $2 million for the arts, $1 million for food banks and $13 million for programs for the developmentally disabled, about $1 million more than last year.

Also in the spending plan is $7 million to pay the state’s share of new veterans’ homes in Flagstaff and Yuma and $4 million for rural fire departments to help in fire prevention.

The big ticket items, however, are the $273 million for the 9 percent pay hike being offered to teachers this coming year and $100 million to finally start restoring money the state took in prior years in aid to schools for things like computers, books and minor repairs.

To make the books balance, however, the governor has given up on his proposal to have the state pay for more resource officers as part of his yet-to-be-approved school safety plan. And his request to hire more Department of Public Safety officers for the Border Strike Force and capture wrong-way drivers also is taking a hit.

Added together, legislative budget staffers predict all the additional revenues will leave the state with a “structural balance” of $150 million by the end of this coming fiscal year. That is the surplus of ongoing revenues compared with ongoing expenses.

But Rep. Eddie Farnsworth, R-Gilbert, pointed out that structural balance is set to decrease to less than $45 million the year after that — and a relatively minuscule $2 million by the following fiscal year.

That, said Farnsworth, is not a good trend line.

“That’s a valid point,” acknowledged Richard Stavneak, staff director of the Joint Legislative Budget Committee. “The direction is not encouraging.”

But House Speaker J.D. Mesnard, R-Chandler, seemed less concerned, saying it simply reflects the big investment in teacher pay in the next three years.

The budget plan also has a variety of odds and ends designed to get votes or solve specific issues.

For example, it would allow Coconino County Community College to ask voters to increase its primary tax levy more than the normal year-over-year amount allowed. Budget staffers said that college started out with a very low levy, making it difficult to keep up with expenses.

But once again there will be no state aid for Pima and Maricopa community colleges.

And there’s $1.7 million in the budget in special appropriations to Pinal, Yavapai and Mohave counties.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

 

x

Check Also

Calculating numbers for income tax return with pen and calculator

Arguments in education tax on rich comes down to fine (percentage) points

The question of whether Arizonans get to vote on a tax hike on the wealthy to raise $690 million a year for education could depend on what a judge thinks of a math teacher's explanation of the difference between "percent" and "percentage point.''