PHOENIX — Gov. Doug Ducey proposes to balance the state budget by cutting aid to universities by more than 10 percent, taking some revenue-sharing dollars from cities and counties, and imposing what amounts to a new tax on motorists.
Ducey’s nearly $9.1 billion spending plan, about $187 million less than this year, also cuts funding to promote tourism and dips into other state funds to the tune of $304 million.
The governor contended his budget increases classroom funding by $134 million, but there is less there than meets the eye.
Most of that is from what voters already have told lawmakers to increase aid to schools to account for inflation. And even at that, the governor proposes giving schools only what the Legislature contends the state owes schools, rather than the $330 million a court already has ruled is due.
Further, Ducey funds the increase by directing schools to spend 5 percent less on things outside the classroom, ranging from administration to transportation and utilities. That and other changes total $123.7 million.
When all that is factored in, the actual year-over-year increase in state funding for public schools is $11 million out of close to $3.8 billion.
Gubernatorial press aide Daniel Scarpinato acknowledged that local school boards already have the ability to move funds from other expenses into the classroom.
“But they haven’t done that,” he said, saying the mandate will force the issue.
Tim Ogle, executive director of the Arizona School Boards Association, said the edict ignores the reality of what is being paid from the nonclassroom side of the budget.
“You have bond obligations and utilities and maintenance on your buses and transportation and food service,” he said. “There’s just nothing to cut.”
H.T. Sanchez, superintendent of the Tucson Unified School District, was more direct, saying in a prepared statement that the budget amounts to an attack on schools.
“These cuts go beyond administration,” Sanchez said. “He has also targeted counselors and librarians, specialists who provide math and reading intervention, food services and custodians.”
There are places where Ducey plans to spend more, not less.
One of those is for private companies to build and operate more prison beds. John Arnold, the governor’s budget director, said the cost of that starts at just $5.3 million for the coming fiscal year, but eventually will add $60 million to the state budget.
Scarpinato said they are needed for an anticipated 3,000 more inmates, but he didn’t respond to questions about whether Ducey would consider other options, like revisiting laws on mandatory sentencing or alternatives to incarceration.
That new charge for motorists is a $6 to $7 hike in the existing $8 annual registration fee charged on top of the value-based levy on vehicles, which is expected to raise about $65 million a year to help fund the Department of Public Safety.
“This is not a tax increase,” Scarpinato insisted, calling it an agency fee.
The cuts to universities total about $75 million. Arizona State University would take a $40.3 million hit, with a $21.6 million reduction to the University of Arizona. Northern Arizona University would see its state aid reduced by $13.1 million.
While Ducey’s election campaign made an issue of Democrat Fred DuVal’s voting to raise tuition as a member of the Arizona Board of Regents, as governor, Ducey made it clear that he intends to shift the costs to students.
“We believe the universities are investments for our state,” he said. But he said the schools are “also an investment for individual students.”
And Ducey said he sees funding of K-12 education as a higher priority.
“We’re asking everyone to share in this sacrifice,” he said.
Eileen Klein, president of the Board of Regents, said that already has happened.
“No students in the nation have been asked to do more than the students in Arizona,” she said.
Klein said the universities have tightened their belts, eliminating positions, and consolidating colleges and programs. And tuition has been raised significantly.
“Arizona families can’t be the backstop for the state’s fiscal challenges,” Klein said. “That model simply doesn’t work.”
The budget plan also further cuts state aid for the Pima, Pinal and Maricopa community college systems. Smaller colleges would remain untouched.
Ducey’s budget is also balanced with funds from local governments.
The state now provides “revenue sharing” with cities, towns and counties. That was part of a deal to keep cities from levying their own income taxes.
Arnold said that since the state is collecting that money for the localities, they should help pay to run the Department of Revenue. So the governor’s budget reduces their aid payments by a total of $14.1 million.
While he has refused to consider delaying previously approved business tax cuts, Ducey is hoping to get more tax money from one group of businesses.
Arnold said businesses owe about $300 million in sales taxes they have collected but have not paid the state. The plan is to hire 30 additional staffers to chase down the owners.
But when it comes to making sure everyone pays his fair share, Ducey is of two minds.
Arnold said Ducey does not want to hire more auditors to go out and check the books of businesses to ensure they are collecting and remitting what is due.
For individual taxpayers, however, the governor proposes paying an outside firm up to $3.1 million for “fraud-detection services.”
Counties would also have to pay more to cover the cost of sending youths to the Department of Juvenile Corrections. And on top of that, the state no longer will take juveniles who have not committed felonies, meaning counties would have to find other options closer to home, at their own expense.