Ducey proposes pay raises for nearly half of state employees in $11.4 billion budget

Gov. Doug Ducey
PHOTO BY KATIE CAMPBELL/ARIZONA CAPITOL TIMES

Gov. Doug Ducey wants to grant pay raises to nearly half of all state employees, with an emphasis on boosting salaries for law enforcement and corrections officers.

About 45 percent of the state workforce, or 15,000 of Arizona’s roughly 33,200 employees, would see salary increases of 5 percent or more in the $11.4 billion budget plan Ducey released Friday.

Most of the $74 million allocated in the budget for pay hikes goes to law enforcement officials, such as corrections officers and highway patrol. Pay raises at other agencies are awarded only to those employees certified by the Arizona Peace Officer Standards and Training Board.

Corrections officers would get a 10-percent pay bump. Officials expect the higher salaries — average pay would increase from $37,000 to $40,700 annually — to help reduce the department’s nearly 20 percent turnover rate for corrections officers. Ducey plans to follow through with another 5-percent pay raise in the next budget cycle.

Ducey also proposed 10-percent pay raises to Department of Public Safety troopers, and a 5-percent pay bump for non-police officers within the agency.

As the Department of Child Safety continues to fail to meet benchmarks set for hiring caseworkers, Ducey plans to attract more workers with a 9-percent pay increase for agency caseworkers and case aides. DCS has a 35-percent turnover rate and has yet to hire the 1,406 caseworkers mandated by state lawmakers, according to figures provided by the Governor’s Office.

Most other law enforcement employees throughout the state would receive pay raises of about 5 percent, with the exception of those that work within the Department of Juvenile Corrections and Department of Health Services, who would receive 15-percent raises.

Ducey’s budget also provides a roadmap to his other spending priorities, including education, infrastructure and some of his pet projects, such as his school safety plan and additional funding for career and technical education and the Arizona Teachers Academy.

Thanks to an estimated $1.1 billion cash surplus, the governor has a sizable chunk of change to spend with this budget cycle. Instead, he proposes saving approximately half of that amount in Arizona’s rainy-day fund and spending the other half on various initiatives.

As the governor outlined in his “State of the State” address, Ducey wants to boost the rainy-day fund by $542 million, which would bring the balance up to $1 billion. That’s roughly 9 percent of total revenue estimates for FY20.

Deposits to the rainy day fund could be even greater if there’s a windfall for state coffers from tax conformity, though the governor’s budget does not account for those potential revenues.

Education

The governor’s plan fulfills the next step in a three-year plan to boost teacher pay, boosting funding for K-12 public schools by a total of $233 million. That’ll translate to a 5-percent pay raise for teachers, and new dollars to school districts for additional assistance.

Performance-based funding would go to more than triple the current number of schools under Ducey’s plan, which overhauls the process by which schools qualify for those dollars and more than doubles the amount of funding available to high-performing schools.

Ducey’s budget would add $60 million to the Results Based Funding program on top of the $38 million provided in FY19, for a total of $98 million in FY20. Those dollars will go to 675 schools throughout the state, roughly half of the 2,000 district and charter schools in Arizona.

The dramatic increase in the number of schools affected by those funds — only 285 receive such funding in FY19 — is due to a shift in the formula to qualify.

Currently, schools are judged based on AzMerit test scores. But that standard can no longer apply universally after the Legislature adopted a bevy of possible tests to track student achievement at the high school level.

Instead, the new standard will rely on the A-F letter grades assigned to schools by the Department of Education, and the grading system that takes a more holistic approach to judging schools for their performance. All schools with an “A” grade would be eligible for Results Based

Funding, a total of 454 “A” schools with at least 60 percent of the student population on free-and-reduced lunch would receive an extra $400 per pupil, while all other “A” schools would receive $225 per pupil. “B” schools in low-income areas, those schools with at least 60 percent of the student body on FRL, would also get $225 per pupil.

The Governor’s Office estimates that of those 675 schools eligible for the funding, 83 percent are districts schools, while 17 percent are charters.

Overall, roughly 36 percent of the schools are in low-income areas where most students qualify for free or reduced lunch.

The new funding comes with new reporting requirements. While no details were immediately provided, the governor wants to ensure that schools are reporting not just how they’re spending those dollars, but where. That’s because the Results Based Funding is distributed not to specific schools, but to school districts.

At minimum, 51 percent of those funds must be spent at “A” or “B” schools, but remaining balance can be spent elsewhere in a school district. That leaves open the possibility that dollars earned by one high-performing school can help other struggling schools in the same district.

Infrastructure

(Photo courtesy Arizona Motor Vehicle Division)

With a new vehicle registration fee to pay for public safety freeing up nearly $100 million of Highway User Revenue Fund money, or HURF, half of which goes to the state, Ducey is looking to widen Interstate 17.

Work has already begun to expand the road between Sunset Point and south of Black Canyon City, but Ducey’s budget calls for an additional FY19 appropriation of $40 million to start work on a third lane between Anthem and Black Canyon City on the northbound side and several miles of southbound.

The governor also projected another $45 million in both FY20 and 21 to finish the project, for a total of $130 million worth of new investment in that stretch of congested highway, saying expanding the road would increase safety.

That’s all in addition to the State Transportation Board’s scheduled allocation of $193 million to design and construct the I-17 expansion project.

The governor is also calling for an additional $10.5 million from HURF to fund preventative road surface maintenance, bringing the total budget for that up to $51 million, enough to fully fund all ADOT’s preventative maintenance requests, according to the Governor’s Office.

In the last decade, the Mariposa Port of Entry on the west side of Nogales has dropped from the top site for fresh fruit imports to the third place slot behind Laredo and Hidalgo, Texas. After spending millions in recent years to expand the port, Ducey is proposing a $700,000 investment to construct a cold inspection facility, with local partners including the Fresh Produce Association of the Americas, putting up the remaining $300,000.

The administration and local business groups hope that will incentivize produce importers with avocados, berries and other temperature sensitive fruits to run their product through Nogales.

That could mean up to $30 million in product traveling through the state annually, and pulling in up to $4 million per year in state and local tax revenues, according to the estimates from a University of Arizona study.

Other spending priorities

The budget allocates funding for several initiatives Ducey mentioned in his “State of the State” speech Monday.

After pledging, then failing to deliver, $11 million in additional funding for school resource officers last year, Ducey is proposing $9 million for school-resource officer grants this year, which he says will provide an additional 89 officers, totaling about 200 provided by the grant program.

The proposal would supply officers to about one out of every 10 schools in the state, fulfilling requested demands for police officers in schools, according to the administration.

Since the grant funding has not kept up with demand for so long, many school districts have simply quit applying, and have found other ways to pay for officers, meaning demand is likely much higher than the governor is estimating.

The governor wants to pump $21 million into the Arizona Teachers Academy, a program that was launched in 2017 with no additional funding in the FY18 budget for the universities to execute it. Instead, universities were left to find the dollars needed to provide free tuition for teachers who agree to teach in Arizona schools in their existing budgets, opening the opportunity up to only about 200 students to start; there are currently about 230 students enrolled.

With the money proposed by Ducey in his executive budget, enrollment is expected to expand to about 3,800 students, according to the Governor’s Office.

That far exceeds the Board of Regents’ growth expectations back in 2017. With no help from the state government to cover the cost of the program, ABOR expected to have just 730 students enrolled in the academy by its fifth year. The governor also wants to expand eligibility to juniors and seniors who are majoring in STEM fields and to non-resident and post-baccalaureate community college students.

Ducey’s proposal would also allow students to request tuition benefits for up to four years — students have so far been able to receive up to two years — and would provide for annual $1,000 stipends for students who agree to teach in critical-need areas after they graduate.

Backed by $36 million, Ducey is also pushing for increased investment in career and technical education.

His budget creates a $10 million incentive program that would provide a $1,000 payment to career and technical schools for each high school student that earns an industry certification in specific high-demand fields like manufacturing, health care and construction, among others.

Ducey also wants to direct $20 million to Pima Community College’s Aviation Technology Center. The contribution is designed to meet growing workforce demands from in-state aviation companies like Boeing.

The governor also aims to direct $6 million to expand healthcare training at Maricopa Community College District.

Unsurprisingly, Ducey’s budget also includes the $35 million in state funding he previously promised in an attempt to solidify Arizona’s drought plan, which in turn, means the state could sign onto the multi-state Drought Contingency Plan.