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Major cuts to road projects, adult education, but not ESAs in proposed Arizona budget

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Major cuts to road projects, adult education, but not ESAs in proposed Arizona budget

Jun 14, 2024 | 11:34 am ET
By Jerod MacDonald-Evoy Caitlin Sievers
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Major cuts to road projects, adult education, but not ESAs in proposed Arizona budget
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Photo via Getty Images

The proposed Arizona budget, crafted after months of negotiations between Republican leadership and Democratic Gov. Katie Hobbs, faces an uphill battle as members of both parties voice concerns about sweeping cuts aimed at addressing the state’s budget deficit. 

Lawmakers must approve a state budget before the end of the 2024 fiscal year, which ends June 30, or the state will face possible shutdowns of critical government functions. Additionally, state leaders must figure out a way to fix a $1.3 billion deficit over the 2024 and 2025 fiscal years, which prompted Hobbs to announce earlier this year that state agencies would need to propose possible budget cuts

The proposed budget, released June 12, shows that lawmakers are planning to cut costs by approximately 3.45% at nearly every state agency and are asking others to send more money to the state’s general fund. State regulatory boards, which currently give 10% of the licensing fees they collect to the state, are now being asked to send 15%. 

The Auditor General, Arizona Department of Public Safety, the Board of Executive Clemency, the Department of Corrections and the Department of Child Safety would see a reduction in their budgets by around 3.45% in the 2025 fiscal year, which begins July 1. 

The Office of Economic Opportunity, State Board of Equalization, Arizona Navigable Stream Adjudication Commission and Board of Tax Appeals have the highest percentage reductions in their budgets with up to 4% cuts. The agencies least affected are the Department of Economic Security, the Land Department, the Office of Tourism and the Department of Water Resources seeing reductions of 1% or less. 

In total, $44.3 million would be cut from state agencies if the budget proposal is signed into law. Arizona State University, while seeing a 3.45% reduction similar to its counterparts, would have the largest monetary reduction, to the tune of $10.9 million. 

On Thursday morning, the Appropriation Committees of both the House and Senate heard the budget bills, making sure to note that amendments to them would be forthcoming. House Appropriations Chairman David Livingston, R-Peoria, said he wanted to make sure the meeting was short, limiting speakers to one minute and barring lawmakers from explaining their votes. 

One of the reasons we want this to be a shorter meeting is because tomorrow will be a very, very long day,” Livingston said, later adding that the legislature is intending to end the legislative session after passing the budget on Friday. 

Last year, lawmakers only passed a budget after staying at the capitol well into the night and into the next morning. 

But before the budget bills could be heard in the appropriations committees or anywhere else on Thursday, lawmakers were already voicing concerns about provisions within them.

“There are huge concerns with this budget, both in the way that the budget proposes to save money and in the way it proposes to spend it,” Democratic Rep. Analise Ortiz said in a conversation with the Arizona Mirror. 

One of the most “glaring issues” Ortiz has with the budget is how it would use money the state receives from a lawsuit against the makers of opioids who were found partially at fault for the opioid crisis. In the proposed budget, $75 million from the fund would be transferred to the Department of Corrections. 

The apparent move to backfill holes in the Department of Corrections’ budget with opioid settlement money is illegal,” Arizona Attorney General Kris Mayes said in a statement to the Mirror. “Opioid settlement dollars are meant to save lives and support communities dealing with the ongoing fentanyl crisis, not to backfill a massive budget deficit created by irresponsible GOP fiscal policies.” 

Mayes went on to warn the Legislature and governor that using the settlement money this way could “put Arizona’s entire $1.4 billion in opioid funds in legal jeopardy.” She called the plan “reckless.” 

The governor’s office declined to comment about Mayes’ concerns. 

A presentation by the AG’s Office earlier this year listed “Department of Corrections & related prison and jail opioid uses” as a way the money could be utilized.

Ortiz also opposed the funding diversion.

“I am not ok with taking money that belongs in the community to address the drug crisis to give it to the Department of Corrections to cover the costs of the serious human rights violations they’ve done in the past,” Ortiz told the Mirror. 

But opioid money isn’t the only issue lawmakers and state officials have with the budget.

The proposed budget also moves certain K-12 money from ongoing funding to one-time funding, meaning that lawmakers would need to fight to include that money in next year’s budget. 

“We need to remember that the ESA program is siphoning off millions of dollars for private schools and religious schools,” Ortiz said. “We are trying to balance our budget on the backs of children of color in lower income communities. Absolutely not.”

ESAs, also known as empowerment scholarship accounts, have been reported to cost the state roughly $332 million a year, a number expected to grow to $429 million next year. In 2022 Republicans in the Legislature expanded the voucher program, to allow all K-12 students in the state to attend private school or to be educated at home using public money, even if that student’s parents were already paying for them to attend private school before a voucher was available.

Public education advocates argue that vouchers take money away from public schools, when Arizona public schools are some of the worst funded in the nation.

Beth Lewis, executive director of Save Our Schools Arizona, a public education advocacy group focused on opposing the expansion of private school vouchers, told the Mirror that this budget fails public school students. 

“We know that Republican lawmakers have been incredibly stubborn in terms of touching the ESA cash cow for the rich,” she said. 

The proposed budget doesn’t put a cap on the ESA program, which currently has more than 75,000 participants, up from about 12,100 before the universal expansion. But it would stop public school students from using ESA funding for educational purposes over summer break, for a modest savings of $2.5 million. 

Lewis called that a “minor fix.”

“That’s a Band-Aid on a gaping wound,” she said. 

The budget would also implement safety measures that critics of the ESA program have demanded, including requiring fingerprinting for private school teachers whose students receive ESA funding. Additionally, tutors and teachers who have been subject to disciplinary action from the State Board of Education would be prohibited from providing ESA-funded services. 

“It’s obvious that this budget has been balanced on higher education, water and transportation,” Lewis said. 

Tension among lawmakers 

During a lengthy and at times contentious hearing of the House Appropriations Committee on Thursday, the budget in its current form was approved to send on to the full House for consideration. Chairman Livingston limited testimony from those who attended the meeting to voice their concerns about the budget and prohibited those in the audience from filming

“Members and everybody in this room you have been officially notified. Security is here, I will not give you a second chance,” Livingston said after he chastised Rep. Mariana Sandoval, D-Yuma, for filming the meeting. “The rules are set in stone.” 

At the end of the meeting, Rep. Nancy Gutierrez, D-Tucson, expressed frustration at the limitation Livingston placed on lawmakers and members of the public there to criticize the budget. 

“I think that taking away the ability for members to explain their vote is wrong,” she said. “I am just disappointed that we all didn’t get to speak our truth on this.”

Livingston also laid down another rule. Those who give “good suggestions” instead of just choosing to “complain about the bill” would get higher priority for their proposed amendments to the budget. 

“You may get a more positive response from leadership and the governor if you do that,” Livingston said of people who offered suggestions for amendments to the spending plan. 

Almost all the people who testified before the committee did not support the budget and had major objections to how money was either allocated or taken from one area and given to another. 

A lobbyist representing the Area Agency on Aging voiced concern over budget allocations aimed at the organization that have been shifted to one-time versus ongoing funding, adding that $5 million the agency expected to receive will be pushed to next year, possibly putting more than 700 seniors at risk of losing certain services. 

Lauren Armour, director of government relations for Maricopa County Community Colleges, voiced her worry over intended cuts of $53.9 million from community colleges across the state. 

“These cuts will decimate critical workforce programs,” Armour said, adding that programs aimed at helping adults get their GED and dual enrollment programs will be especially affected. Maricopa County Community College itself would see a 40% cut in its budget under the current budget proposal. 

During a Senate Appropriations Committee meeting on Thursday, Republican Sen. Ken Bennett, of Prescott, said he was disappointed about the defunding of programs for adult education. 

Education advocates also shared concerns as a 2022 agreement to better fund public education amid the universal expansion of the voucher program will be moving from ongoing funding to one-time. 

Meghaen Dell’Artino representing the Education Finance Reform Group said she hopes the Legislature considers just pausing those payments for two years and putting in place a mechanism that would allow them to be restarted if state finances allow. 

The state budget also contemplates directing districts to use their cash on hand in lieu of increased funding. Republicans argued that was money the schools were not using. Legislative staffers pointed out that the money could already be allocated to debt services or other items and was not necessarily available to compensate for cuts. 

“I feel like that might have led people in the wrong direction, thinking it is money for the taking when it is for cash-strapped schools,” Rep. Seth Blattman, D-Mesa, said. 

Former lawmaker Regina Cobb, speaking on behalf of the Arizona Dental Association, voiced her concerns with “sweeps” made to professional boards across the state in the budget. Sweeps in budgeting are when a certain amount of funds are “swept” out of one fund to be put into another one, in this case the state’s general fund. 

“I would request that if you are going to be doing sweeps that you at least allow six months of operation,” Cobb told the committee, adding that many state boards are already behind on credentialing and licensing. 

Livingston would later admit that only some boards were consulted  about the sweeps proposed in the budget aimed at regulatory agencies. 

“I would say the majority, no. Some were,” Livingston said when asked if boards were informed. “Generally not everyone, but some.” 

The sweep of the boards is anticipated to bring an additional $2.9 million to the state general fund and for a two year period, boards would not be able to increase fees and rates in response to the loss of money. 

“I consider this a tax on all licensees,” Cobb said of the proposed change. 

Health care in the state went generally untouched by the cuts. 

Will Humble, executive director for the Arizona Public Health Association, who served as the director for the Arizona Department of Health during the great recession, said the challenge lawmakers are facing is far less dire than it was 16 years ago. 

“This is child’s play compared to that,” Humble said of the 2008 recession. “It was bad with a capital B. Not just bad, it was scary.”

Humble said that lawmakers shouldn’t look to 2008 as an example, but to last year’s budget in which each lawmaker was given a pot of money to fund pet projects in order to get buy-in on the budget. 

“Last year it was like you’re the ice cream man and you’re just giving away all the food. That was $2 billion that could’ve gone into the rainy day fund,” Humble said. “Had they been more disciplined about last year and put some more money in the bank, we probably wouldn’t be looking at a whole lot of cuts and so forth.” 

Democrats were not the only ones critical of the budget proposal, with Republican Sen. T.J. Shope, of Coolidge, saying during the Senate Appropriations Committee meeting that he was most disappointed in the plan to push back road projects aimed to improve public safety. 

Shope was particularly concerned about the plan to push back the construction of an overpass at the intersection of State Road 347 and Riggs Road in Maricopa from 2024 to 2028. He added that legislative leaders worked very hard to avoid nixing the project entirely.

“We know how much it’s needed,” he said. 

Katy Proctor, intergovernmental affairs director with the city of Maricopa told lawmakers that the city was extremely disappointed about the delay in funding for the project. More than 57,000 vehicles travel through that intersection daily, she said, and it’s ranked as the fourth-most dangerous intersection in the state highway system. Most accidents that happen there involve rear-end crashes and left turns, which she said would be eliminated by the project. 

“This is a priority safety project for our region,” she said. 

The members of the House and Senate Appropriations Committees voted mostly along party lines, with Republicans voting in favor and Democrats against, to send the budget proposals to the full chambers for amendments and consideration on Friday. 

But there were some outliers. Republican Rep. Barbara Parker voted against the budget alongside Democrats and Republican Rep. Joseph Chaplik, R-Scottsdale, voted present, refusing to take a position either way. 

Sen. Anthony Kern, R-Glendale, voted against every budget bill in front of the appropriations committee, causing the Republicans on the committee to bring in an additional GOP lawmaker, Sen. Sonny Borrelli, to ensure the bills passed through the committee. 

Kern apologized to those who had worked on the budget, but said he would not vote in favor of the budget when he hadn’t had a chance to fully familiarize himself with it and had heard conflicting stories about it.