Governor Doug Ducey's budget plan puts new cash into schools

Posted at 2:39 PM, Jan 13, 2017

Arizona Gov. Doug Ducey released a state budget proposal Friday that includes $114 million in new spending for K-12 education for new initiatives, including teacher raises, signing bonuses for low-income school instructors and an expansion of full-day kindergarten in low-income schools.

Highlights of the $9.8 billion plan include the new spending for K-12 schools above required inflation increases and a $52 million boost in university spending mostly to help float a new $1 billion construction bond package.

The current budget year's spending is pegged at $9.6 billion, so the overall increase is close to 2 percent, below projected inflation and population growth. The executive proposal for the fiscal year that begins July 1 is a starting point for budget negotiations with the Legislature.

The new spending is well above the $24 million the Legislature's analysts predicted would be available, revised up to $46 million on Friday. Other cash reverting to state coffers made that possible, including the elimination of a local road funding mechanism that frees up more than $87 million.

Still, the budget is tight, with Ducey aiming to maintain a structural balance during his third year in office. Ducey's spokesman said the new K-12 spending is evidence that the state values education and teachers.

"We are taking almost all the dollars that we have to invest this year, putting them into K-12 education, making a real investment in teachers," Ducey spokesman Daniel Scarpinato said.

Democrats immediately blasted the proposal's reliance on taking road money to fund Ducey's school initiatives. Lawmakers from both parties aligned to get the funding in the current budget.

"I don't think people asked for a choice between education and roads, I think they want both,' said Sen. Steve Farley, D-Tucson. "And what he did was he took money from roads and put it into a few little ineffective programs in education."

Ducey's proposal puts dollars next to 15 new education initiatives he outlined Monday in his state of the state address.

The plan includes $13.6 million for teacher pay raises, with a five-year goal of raising pay by 2 percent. Arizona teachers are among the lowest-paid in the nation, and even with $68 million in new spending after five years will remain at or near the bottom.

A teacher now making $50,000 a year will see a boost nearing $1,000 in five years.

Joe Thomas, president of the state teachers association, called that increase paltry.

"That comes out to a dollar a day, the raise, and that's not the kind of real investments that are going to right the system," Thomas said.

The proposal also calls for $6.4 million to give $1,000 signing bonuses to teachers hired at low-income schools, $10 million for very low income schools to implement or expand full-day kindergarten or other literacy programs and an increase of $250,000 in a loan forgiveness program for science, technology and math teachers.

The governor also proposes pumping $38 million into high-performing schools, with those with a high percentage of low-income students getting twice as much per student. The idea is to allow those schools to expand their offerings to more students.

Universities are being asked to create a proposal that would allow prospective teachers to graduate without debt if they commit to teach in public schools for four years. That's being sold as an inherent pay raise, but comes with no additional cash for the three state universities charged with implementing the plan.

House Speaker J.D. Mesnard, R-Chandler, said the governor proposed less new schools funding than some fiscally conservative members feared and that the raise is good news for teacher.

"I think it's a good starting point -- it's better than zero," said Republican House Speaker J.D. Mesnard.

The $53 million in new university spending includes an extra $15 million in one-time cash split between the University of Arizona, Northern Arizona University and Arizona State University to be spent how they want.

The biggest university investment is a sleight of hand allowing them to keep $37 million in state sales tax revenue their research and development facilities generate to help fund payments on $1 billion in new bonds for construction and maintenance.

Cities will take a hit, with $7 million of that money coming out of their share of the sales taxes.

Ducey wants to create $2.8 million in income tax cuts by adjusting the personal exemption for inflation. The governor campaigned in 2014 on cutting taxes every year but so far has made only relatively small adjustments.