State budget analysts brought heartening news to citizens, businesses and schools in the governor’s proposed budget for fiscal 2022.
First and foremost, there will not be a budget deficit as predicted earlier this year when the pandemic caused a spike in unemployment and disruptions to commerce statewide.
Governor Doug Ducey also wants income tax cuts amounting to $600 million over the next three years, state budget analysts said during a press conference revealing the proposed budget on Friday.
In fact, Arizona is doing so well, revenues are projected to provide a healthy surplus. Arizona’s healthy economic standing means there will be $389 million to help students who have suffered pandemic-induced learning losses to catch up.
“Arizona is resilient, and we continue to move forward in the face of hardship, loss and disruption,” Governor Doug Ducey said. “Our budget will keep us moving in the right direction, and it makes strategic investments in our greatest areas of need — K-12 education, forestry management, public health and much more.
“Kids have missed out on important learning opportunities and classroom time, and we need to use our resources to help students in need catch up and ensure students, regardless of background, stay on the path to success.”
Keeping Arizona competitive on world stage
The governor’s plan includes funding for education and school choice, workforce training, wildfire prevention, high speed internet for rural areas, covid relief for businesses and healthcare providers, highway and prison infrastructure, and much more.
To keep Arizona competitive on the world stage, the budget calls for $600 million in cuts to income taxes “across the board” for citizens and small businesses over the next three years.
Business groups including the Greater Phoenix Chamber of Commerce and Arizona Chamber of Commerce and Industry applauded the proposed plan.
“This budget is not only fiscally responsible, but it is loaded with meaningful reform,” said Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry that represents thousands of employers across the state. “Arizona is now spending more from all sources on a per-pupil basis than at any time in the state’s history.
“The governor’s education initiatives will help our students make up for any pandemic-induced learning loss and will help parents, including those with limited transportation options, find the best educational fit for their kids, something that has become even more important during the last several months of educational disruptions.”
The $12.6 billion plan is the largest in the state’s history. Now, the governor and state Legislature will begin negotiations to produce a final spending plan before the conclusion of the fiscal year on June 30.
Federal CARES Act relief helped state stay the course
Arizona is in a stronger fiscal position than many states around the country with 97 percent of jobs lost during the pandemic now recovered, budget analysts from the Governor’s Office of Strategic Planning and Budgeting (OSPB) reported.
About $38 billion in pandemic relief from the federal CARES Act this past year is one reason the state is faring well. Arizona’s healthy pre-pandemic economy and a $1 billion rainy day fund also saved the day, they said.
Here’s are some of the highlights:
Income tax cuts
The budget proposal includes $200 million in income tax cuts for fiscal 2022, which begins July 1. Ducey, who will be termed out of office this year, wants to extend his legacy of lowering taxes by including plans to extend the $200 million tax cut another two years.
While details will be hammered out over the next few months, the tax cuts will help taxpayers “across the board,” the governor said.
Education, school choice, civics education, rural broadband
In addition to $389 million to help students catch up, the budget includes an additional $250 million for K-12 education above and beyond inflation.
Funding is targeted for programs to provide COVID-19 relief, rural broadband, early literacy, and additional civics education programs.
Among the biggest ticket items for K-12 education are:
- $119 million for school building renewal grants
- $52.6 million to complete two schools already under construction and start construction on five new schools
- $10 million to inform families about education options and support transportation innovations that expand school choice
Wildfire prevention with inmates helping out
The proposed budget includes $24 million for the Arizona Healthy Forest Initiative, a joint program between the Departments of Forestry and Fire Management and Corrections, Rehabilitation & Reentry.
The Healthy Forest Initiative expands opportunities for state inmates to learn crucial job skills for post-sentence employment by treating our state’s land and wildlife, putting a greater focus on fire prevention.
Health and welfare
Ducey’s budget also includes money to help Arizona’s most vulnerable citizens including children and the elderly with funding allocated for long-term care surveyors to address high caseloads and backlog.
Items in the proposed budget with health and safety in mind include:
- $92.7 million in FY 21 supplemental funding for the stabilization of child care centers and to further support providers during the pandemic
- $25 million for the implementation of the Family First Prevention Services Act, focused on keeping children safely with their families
- $18 million to fund the continuation of the Child Care Waitlist and for a new pilot program that provides child care to children of parents pursuing education and nursing degrees
Arizona’s three public universities have been on the front line of research and action to address COVID-19 issues in the state. CARES Act and state funding to help reimburse them and continue to produce an educated workforce includes:
- $115 million in COVID-19 relief, provided via CARES Act funding
- $35 million to support the public universities’ workforce development for the New Economy initiative
Prison construction including revamping outdated infrastructure is part of the budget including $54 million to address building renewal needs across the Arizona Department of Corrections, Rehabilitation and Reentry (ADCRR), including $25 million for critical safety projects at the Eyman Complex in Florence.
The budget includes funding to recruit and retain Department of Public Safety (DPS) employees, equip DPS officers with body cameras and necessary support for video and IT management, and update the statewide land mobile radio network.
Highway infrastructure, online portal for new businesses
Other items in the budget are the launch of a “hoteling pilot program” to increase options for government workers to continue to work remotely and a new online portal where new businesses can complete all state paperwork requirements.
It also allocates $33.1 million to fund a major expansion of the I-40 West broadband corridor, in addition to $40 million in Federal CARES Act funding for the I-19 and I-17 broadband corridors.
Rainy day fund still holding near $1 billion
Another positive feature of the budget is Arizona’s $1 billion rainy day fund. It remains almost fully intact at $954.4 million. While many states used these funds to address shortfalls in response to the pandemic, Arizona last year used $55 million to address one-time public health expenses, not shortfalls, budget analysts said.
To see a complete list of details in the budget, go to: Governor’s fiscal 2022 budget