Thanks to all the federal pandemic relief aid provided to Arizona by Congress, which Gov. Ducey and the GQP-controlled legislature want to redirect to corporations and their wealthy campaign contributors in yet another unwarranted tax cut – in direct defiance of the express prohibition in the federal legislation that it be used to backfill budget cuts, not tax cuts, see Brnovich sues feds over tax cut restriction in COVID relief act – and the Ducey-packed Arizona Supreme Court recently siding with our lawless GQP legislature to invalidate the Invest In Ed citizens initiative (Prop. 208), the state of Arizona has amassed a budget surplus of 5.3 billion dollars.
The Arizona Mirror reports, Arizona budget surplus grows to $5.3 billion:
The combination of state tax collections that continue to exceed expectations and a recent court ruling striking down a voter-approved tax increase to spend more money on public schools means that Arizona lawmakers will have almost $5.3 billion in surplus revenue in the upcoming budget.
Legislative budget analysts said at an April 7 meeting of the legislature’s Finance Advisory Committee, which meets several times a year to receive updates from budget experts and economists, that the projected budget surplus has grown significantly since January.
At that time, the Joint Legislative Budget Committee said there was a roughly $3.1 billion budget surplus.
But tax collections — led by sales taxes — have continued to grow at unexpected levels, and a trial court judge ruled last month that the Invest in Education Act was unconstitutional. And those combined to increase the projected surplus to $5.27 billion.
Of that, budget analysts said $1.57 billion is ongoing revenue, meaning it can be spent on permanent or multi-year programs without worrying about whether the funding will exist in the future. Another $3.7 billion is considered one-time money, which lawmakers generally use to pay for temporary programs, since there is no guarantee the tax revenue will exist after this year.
LBC analysts said the state will have about $4.1 billion in excess revenue: $1.3 billion ongoing, $2.8 billion in one-time funds.
Arizona lawmakers are currently 88 days into the 2022 legislative session. Typically, the legislature ends its work in about 100 days [WRONG! They are supposed to be done in 100 days, but rarely, if ever, finish on time], but there have been no outward signs that an agreement on spending for the upcoming fiscal year — which begins July 1 — is forthcoming between Republican legislative leaders and Gov. Doug Ducey.
In January, Ducey proposed a $14.25 billion state budget. But the budget process this year is complicated by an Arizona Supreme Court ruling last year that struck down many provisions in the current year’s budget because they had nothing to do with state spending. Instead, they were new laws bootstrapped to the budget in order to secure the GOP votes needed to pass the spending plan, which the court said was unconstitutional.
Note: Despite this ruling, you should expect to see our lawless Republican-controlled legislature do this again this year in defiance of the Arizona Supreme Court. To paraphrase President Andrew Jackson, “The court has made its decision; now let it enforce it!” (It will not, wimping out on a “separation of powers” excuse, even though the supreme court of other states has held legislatures in contempt of court and imposed stiff fines to compel compliance.)
Because Republicans hold bare majorities in both legislative chambers — 16 of 30 seats in the Senate and 31 of 60 seats in the House of Representatives — they cannot lose any majority members.
And that’s looking increasingly difficult, particularly in the Senate, where retiring Sen. Paul Boyer declared that he won’t back any budget or tax-cut proposal that doesn’t essentially replace the unconstitutional Invest in Education Act funding for schools. See, I’ll vote ‘no’ on a tax cut unless Republicans also raise education funding by $900M.
Arizona hovers between 49th and 50th in per-pupil funding and cannot fill more than a quarter of its teacher vacancies. In the past 15 years, state funding per student has increased only 5% when adjusted for inflation.
Arizona hovers between 49th and 50th in per-pupil funding and cannot fill more than a quarter of its teacher vacancies. In the past 15 years, state funding per student has increased only 5% when adjusted for inflation……And, the state has a $5.3 billion surplus. https://t.co/7frOTzG5gu
— Craig Harris (@CraigHarrisUSAT) April 7, 2022
So then there’s no excuse not to bring teacher salaries up to the national average. Or to stop underfunding special education programs. https://t.co/AeoJBZSfzD
— Julie Erfle (@erfleuncuffed) April 7, 2022
With news that the state is sitting on a 5.3 billon-dollar surplus, now's a good time to repost this column.
For Republicans, there is never a “right time” to invest in public education. But it’s always the “right time” for tax cuts.https://t.co/XwSTT4ZkZJ
— Julie Erfle (@erfleuncuffed) April 8, 2022
With GQP Sen. Paul Boyer a holdout with nothing to lose (because he is not running for reelection), Senate President Karen Fann is forced to negotiate with the Democratic minority. Democrats had better not sell out, or get played again for another unwarranted Ducey tax cut for corporations and the GQP’s wealthy campaign contributors.
Howard Fischer reports, Arizona Senate president courting Democrats’ votes on state budget:
With a holdout in her own Republican caucus, Senate President Karen Fann is moving ahead with a state budget she hopes can pick up some Democratic support.
The Prescott Republican said Thursday she remains one vote short of the 16 needed to approve a spending plan for the coming fiscal year. Ditto on a proposal to accelerate implementation of a flat income tax originally approved last year.
That missing vote for the moment is Sen. Paul Boyer, R-Glendale.
The problem from Boyer’s perspective isn’t enacting a flat tax rate, which would cut taxes. He supports it.
But he also wants — and believes there is money available — to put an extra $900 million into K-12 education.
Boyer said that’s what voters want, citing their approval in 2020 of Proposition 208, a new tax on the wealthy to raise money for education. That initiative was voided after the Arizona Supreme Court ruled there was no legal way to spend the money it would have raised.
That problem could easily be resolved with a vote of the Legislature to provide itself the cash that the tax otherwise would have raised. And lawmakers can waive the education spending cap, just like they did earlier this year to deal with current funding.
But Fann acknowledged there are Republicans who would never vote for more funding for education beyond current levels. So there’s the stalemate if lawmakers hope to adopt a budget with only Republican priorities and only Republican votes.
Friday was day 89 of the legislative session that is supposed to run just 100 days. And while no one expects lawmakers to meet that deadline, Fann said she needs to move forward, with or without Boyer.
Senate Minority Leader Rebecca Rios, D-Phoenix, said she and the other 13 members of the Democratic caucus are waiting to hear what Fann has to say.
“We’re more than willing to sit at the table and negotiate with her,’’ she said. “The question is, what is it they are truly willing to put on the table?
“We’re not going to be bought off cheaply,’’ Rios said. [Oh really?]
Boy, legislative Dems got played like a fiddle last year. What a truly awful deal they struck. https://t.co/W6Sn3hTvnS
— Jim Small (@JimSmall) April 1, 2022
For Fann, the problem comes down to the fact that Republicans have the barest majority in the 30-member Senate. That means to advance GOP priorities she needs all 16 to be on board.
And the ultimate test every year of the majority party is the adoption of a budget.
“We have been trying for the last four weeks to work with one of our members that was not comfortable passing something unless they got what they wanted,’’ Fann said. “And I think at this point the rest of the members are saying, ‘We’re not going to wait any more, let’s just go ahead and put our normal budget together and move forward.’ ‘’
It’s not a question that there isn’t money. In fact, the reverse is true.
When dollars are short, there isn’t a lot of room for lawmakers to hold out for their own priorities, whether it is spending on new programs, construction of bridges or roads in their districts, or tax cuts.
But when there’s plenty of cash, legislators, particularly in the majority party, each have something they want as part of the budget package.
That’s the case this year.
In a report Thursday, the staff of the Joint Legislative Budget Committee said tax collections remain strong, in the neighborhood of 18% over the prior year.
The report also says there will be close to $1.3 billion available to enact new or expanded programs. That doesn’t count another $2.8 billion that could be spent on one-time projects.
Boyer is not the only one with priorities.
Rep. David Cook, R-Globe, has been arguing for years to have the state start paying down its debts.
Some of that is money the state “borrowed’’ [stole] from public schools using an accounting gimmick, moving certain expenditures from one fiscal year into another. There also are other long-term debts.
Cook managed to get some of that paid down last year, a move he said saves the state $270 million a year in debt payments. He figures there’s another $100 million to be saved with some further debt reductions.
“I want that to pay for the tax cut,’’ he said. Cook also said he supports additional dollars for K-12 education, though he’s not sure the state can afford as much as Boyer wants.
Cook finds himself in somewhat the same position as Boyer.
He is one of 31 Republicans in the 60-member House. And if there is to be an all-Republican budget, his vote is needed.
Boyer, for his part, said he doesn’t need the support of all of the 15 other Senate Republicans to craft a deal on the budget and tax cuts.
“I’d bring in some people to offset those votes,’’ he said. “And that would be my friends across the aisle.’’
But there’s a complicating factor.
Boyer also wants expansion of “empowerment scholarship accounts,’’ the program that allows parents to get a voucher of state funds to send their children to private or parochial schools. He said while the current limits are fairly broad, including any student in a public school rated D or F, he wants a special carve-out for children living in poverty.
This is just the latest example of a legislator pursuing self-serving legislation, what should be considered a conflict of interest. Boyer teaches at North Phoenix Preparatory Academy, and previously at Veritas Preparatory Academy, both charter schools. The Arizona legislature has refused to adopt ethics standards to prevent self-serving legislation, because so many legislators do it, particularly those with any connection to charter schools, a system that Republican legislators set up and from which too many of them profit at taxpayer expense. It’s like writing checks to yourself from the state of Arizona’s checkbook. This practice has to stop.
Rios, however, said that won’t fly.
“ESA’s are a non-starter for Democrats,’’ she said, with party members saying they divert needed dollars from the public schools that most students attend.
All that has left Fann with no clear idea of how long it will take to adopt a budget and tax-cut plan.
“I will be here as long as it takes,’’ she said, pointing out that lawmakers were in session last year right up to the last day of the fiscal year on June 30.
“It took us 171 days last year,’’ Fann said. “It might be taking us 172 this year to get it.’’
The problem with this is that in an elecion year, legislators like to cut and run early so they can go campaign and lie to the voters about what a great job they are doing. Dragging this legislative session out to June (or even July) is going to make Fann persona non grata among her MAGA/QAnon caucus (and everyone else for that matter).
— Ruben Gallego (@RubenGallego) April 9, 2022
The answer here is obvious to anyone with half a brain and a commitment to sound public policy: tell lameduck Governor Ducey to take his unwarranted tax cut for corporations and The GQP’s wealthy campaign contributors and go fuck himself, and fully fund teachers and public education in Arizona in compliance with the will of the voters, as expressed in their approval of the Invest In Ed ctiizens initiative (Prop. 208). I know it sounds crazy, but do the right thing for a change! It would actually get you votes.