Arizona House budget plan has more teacher pay, bigger tax cut

March 29, 2017
Associated Press

PHOENIX (AP) — The opening budget proposal from Arizona House Republicans includes bigger teacher pay raises than the governor seeks and a larger income tax cut than he wanted.

The $9.8 billion spending plan also excludes nearly $100 million in new proposals sought by Republican Gov. Doug Ducey.

Republican House members were briefed on the proposal put together by House Appropriations Committee members early this week and talks were beginning with Ducey’s office and the state Senate.

Also included in the proposal is a partial restoration of road funding for counties and cities that is an annual fight in the Legislature. Lawmakers have been raiding the Highway User Revenue Fund for years.

The document outlining the proposals was obtained by The Associated Press.

The House’s opening gambit for the spending plan for the budget year starting July 1 contains room for about $30 million in other new initiatives, though Ducey wants $125 million.

House Speaker J.D. Mesnard said in an interview that he tasked the appropriations committee members with coming up with a set of spending proposals possible with current funds, and after that was left with a “box” that can handle $30 million in other new spending priorities.

“And that is into which everything else must fit, unless you start breaking down the framework and I think that would be pretty challenging,” Mesnard said.

The plan has an open line for additional spending requests from House members, with placeholders showing they could include payments to offset costs shifted to counties for juvenile corrections, additions to the nearly $460 million rainy day fund, reducing the state’s current $7.4 billion in debt or more tax cuts.

For the most part, Mesnard said, the big ticket items are already included in the budget proposal presented by Ducey in January.

“So we’ve just got to negotiate with the executive on what can work and what goes where to end up with a structurally balanced budget,” Mesnard said.

The teacher pay proposal from the governor was widely panned as far too low, just 2 percent over five years. The House plan includes a 1 percent raise for the coming school year at a cost of $34 million as opposed to the governor’s $13.6 million.

Ducey requested that the personal income tax exemption be adjusted annually for inflation at a $2.8 million yearly cost. The House budget calls for an immediate $100 increase in that exemption at a cost of $11 million and ongoing inflation adjustments.

Other House proposals include providing $7.3 million to the Department of Education for computer staff and projects. Superintendent of Public Instruction Diane Douglas wants $17.6 million and the governor offered nothing.

Notably absent from the House spending plan is $30 million in ongoing spending the governor proposed to help universities pay interest on nearly $1 billion in new construction bonds. Instead, the House plan contains $15 million in one-time university spending.