Arizona budget proposal detailed at Capitol as teachers continue protest

Lawmakers prepared to introduce a budget proposal Monday that will give school districts enough money to pay for a 20 percent pay increase for teachers by the 2020 school year.

The proposal largely mirrors Gov. Doug Ducey's plan announced April 12, which many teachers say does not address all of their education-funding concerns. The main difference is in how the plan will be funded, with less reliance on a surging state economy.

New vehicle-registration fees as high as $24, additional state savings from purchasing prescription drugs and dozens of other small changes will allow lawmakers to approve teacher raises without relying as much on growth in the state economy, according to details released Monday.

Actual bills are expected to be filed late Monday or Tuesday.

Raise amounts could vary

Although Ducey has said his aim is to give every teacher in the state a 20 percent raise, the budget proposal would not provide funding for every district to do that. Nor would it require districts to spend the money on teacher pay raises.

The additional money for districts would be based on a statewide teacher salary average of $49,000, Stefan Shepherd of the Joint Legislative Budget Committee told House Democrats Monday. Twenty percent of that figure is $9,800.

Districts will get a bundle of money based on that $9,800 figure multiplied by the number of teachers they reported having, Shepherd said.

But, Shepherd said that means districts with higher-than-average teacher salaries would not receive enough money to give all their teachers 20 percent raises.

Conversely, districts with lower-than-average salaries would receive more than enough to give teachers 20 percent raises.

And nothing in the budget bill would require the additional funds be spent on teacher salaries, Shepherd told lawmakers.

“There’s no language that says you have to give X percent pay raise,” Shepherd said.

In touting his plan on KFYI-AM last week, Ducey said, “Make no mistake. When we pass this plan, every teacher in the state will have a 20 percent pay raise by 2020.”

Daniel Scarpinato, a spokesman for Ducey, said he anticipated only a few districts would not receive adequate funding, and that could be remedied in future budget years.

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As with Ducey's original plan, the budget includes $100 million next year for capital expenses such as maintenance, textbooks and technology. However, districts could choose to spend the money on other needs, such as salaries or raises for support staff.

But even with all of the tweaks and adjustments Ducey has made to his 18-day old proposal to get Republican lawmakers on board, it only partially meets one of the five stated demands made by protesters. They had called for a 20 percent raise for teachers this year.

On the hunt for votes

Ducey initially could not round up the votes for his proposal, but on Friday announced the state House and Senate agreed to a deal. Critics said originally the plan was too optimistic.

It relied heavily on increases in state revenue from a growing economy to fund most of the pay increase.

The main difference between what lawmakers are considering now and what Ducey announced April 12 is additional money the state will get annually from vehicle-registration fees that will kick in next year.

According to a JLBC analysis given to lawmakers, some $152 million would be generated over the next three years by a new Highway Safety Fund fee that would be around $24 a vehicle, $6 higher than what was previously discussed.

House speaker explains some details

House Speaker J.D. Mesnard, R-Chandler, gave further details during a Republican Caucus meeting Monday, also with representatives from the Joint Legislative Budget Committee.

Of the robust economic forecasts in the budget, Mesnard said, "There is very little left of that. We have scaled back significantly reliance on economic growth and caseload reductions."

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"Caseload reductions" in the budget are savings the state expects from fewer people needing state health assistance.

Mesnard said he expects budget bills to be introduced and possibly approved by the end of the week.

Some teachers initially unimpressed

Some teachers are unimpressed with the governor's plan, and say it does not address all of their concerns with school funding.

Tucson resident Cindy Hall, who teaches sixth-grade math in Marana, joined thousands of protesters Monday as she held a sign in front of the governor's office that read "I'm certified in math. Do you need my help?"

She said the governor's plan was "a start."

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She started at a salary of $32,000 18 years ago and has seen only a $7,000 increase in that time, she said.

"We can get creative," she said of the budget. "Let's look at some of the tax breaks we are giving to companies."

She also said teachers have other concerns besides their own pay, including the pay of support staff. And she has concerns that the governor can't promise anything beyond the next fiscal year because he might not be in office after that.

"The governor is up for re-election and can make a promise for this year only," she said.

Lawmakers question the deal

Several Democrat lawmakers and some Republicans continued to have reservations over the plan on Monday.

Rep. Anthony Kern, R-Glendale, said he still had concerns about the plan.

“I’m not happy enough to vote aye,” he said in the House lobby on Monday.

He was concerned about how additional revenue was coming from higher vehicle registration fees.

He also thought that there was little cushion in the budget looking ahead three years. According to the JLBC analysis, the budget in 2021 has a structural balance of $2 million. Kern said that was too low.

The revised plan would leave the state with a cash balance of about $106 million in fiscal 2021 despite the narrow structural balance. A structural balance is how much more or less will be spent relative to income that year. A cash balance is what the state has in reserves at the end of the year.

“If we have any hiccups in the economy, the budget will not be structurally balanced,” Kern said.

Other lawmakers echoed Kern's concern, saying the budget would be challenged in an economic downturn.

"The likelihood of a downturn looms very large on the horizon," said Sen. David Farnsworth, R-Mesa.

Mesnard said that "healthy" cash balance gives lawmakers "some breathing room should there be a hiccup (in the economy)."

Minority Leader Rebecca Rios, D-Phoenix, said she was concerned the new plan assumes the "additional assistance" funds will be used for support staff raises.

"Again, it’s a shell game," Rios said. "You have to bring in more money. The reality is you can't make up a $1 billion deficit by relying on the same amount of revenue."

The journey from 1 percent to 20 percent

Ducey in January proposed just 1 percent raises for teachers. He faced substantial backlash, walk-ins and the threat of school walkouts the past few months.

Under pressure, Ducey revised that proposal to give teachers 20 percent raises over three years.

The governor said earlier this month the 9 percent increase would bring the average teacher salary in Arizona to $52,725 this fall.

By 2020, Ducey's plan would make the average teacher salary $58,130, he said.

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The National Education Association is among the groups that track teacher pay. According to its 2017 data, the national average salary is $58,950. Arizona pay currently ranks 45th lowest in the nation, the association's data shows.

Adding the 9 percent raise would put Arizona in the middle of the pack among states.

Several small changes

The governor never affirmed the details of the teacher-play plan, but budget documents were obtained by media and included some of the proposals.

Following are some key changes from the January budget and/or the first revised budget from the governor with the larger teacher raises.

The latest version of the budget:

Predicts the state can save $52 million on its prescription drug bulk-purchase program, up from an estimate of $30 million previously.

Includes $13 million for developmentally disabled funding that was proposed to be cut.

Includes $8 million in one-time funding for universities that was proposed to be cut, with an additional $2 million for "freedom schools" that advance free market ideals.

Includes $2 million in arts funding that was proposed to be cut.

Does not include revenue from a new Keno game that was previously proposed.

Includes a tax break for veterans that will cost the state $2 million, down from the $15 million a larger break initially proposed by the governor would have cost.

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