Lawmakers pass state budget

After intense negotiations over the holiday weekend, Arizona lawmakers passed the fiscal year 2020 budget last night along party lines.

The deal was struck over the weekend as Republican legislators reached a compromise on a child sexual assault bill that extends the statute of limitations for victims and survivors and extends a new window to bring civil suits forward that were subject to the previous statute of limitations.

The $11.8 billion spending package includes additional dollars for K-12 education as well as reforms to offset potential tax increases due to the federal tax reforms.

“With this budget, Arizona is learning from the mistakes of the past, exercising fiscal responsibility, investing in the things that matter and making a historic down payment on securing Arizona’s future,” Governor Doug Ducey said.

House Speaker Rusty Bowers stressed the education investments in the budget.

“Governor Ducey and the Legislative Republicans have crafted a budget that spends $5.6 billion, almost half the state’s general fund budget, to continue our investment in K-12 education, including money for the 20×2020 teacher pay raises, over $136 million in district additional assistance, and $70 million in Results Based Funding,” Bowers said. “In addition to the investments made in K-12 education, the budget also includes $37 million to community colleges for expansion of healthcare, aviation, and STEM programs.”

Senate President Karen Fann tweeted, “Thank you Governor and the entire team in the exec tower. This was a challenging budget year and glad we all worked together to make it happen.”

Thank you Governor and the entire team in the exec tower. This was a challenging budget year and glad we all worked together to make it happen

— Karen Fann (@FannKfann) May 28, 2019

Highlights of the budget package include:

Economic Development, Taxes, Debt

Reduces the number of income tax brackets from five to four, lowers the state’s top tax rate to 4.5 percent, and conforms the state’s standard deduction with the federal standard deduction of $12,000 for single taxpayers and $24,000 for married couples.
$542 million deposit into the Rainy-Day Fund.
Reduces state debt by $220 million.
$475,000 for two trade offices in Mexico and one in Israel.
Requires remote sellers of tangible retail goods to pay state and local sales tax. This requirement will also apply to third-party facilitators such as E-Bay. It also exempts micro businesses and hobbyists with less than $200,000 in gross annual sales, a threshold that steps down to $100,000 after three years; and also establishes a single tax retail base, in which definitions and treatment are uniform across the state.

K-12 Education

$165 million for the second installment of the 20 percent teacher pay raises by school year 2020.
$136 million for District and Charter Additional Assistance.
$88 million for school building renewal.
$76 millionfor new school construction.
$30 million in new dollars for results-based funding, for a total of $68 million.
$10 million for Career and Technical Education programs at public high schools.

Higher Education

$15 million to expand the Arizona Teachers Academy.
$15 million for the Pima Community College Aviation Technology Center.
$14.2 million for rural community colleges.
$6 million over three years for STEM programming at Maricopa and Pima Community Colleges.

Infrastructure & Natural Resources