No more bloodshed.
But not much rehabilitation.
That’s the gist of Gov. Jan Brewer’s proposed 2014-15 budget request of $9.4 billion, with significant increases for Child Protective Services, a good year for universities, minimal increases for K-12 schools and a hold-the-line approach elsewhere.
The governor’s budget calls for spending $9.4 billion — a roughly 6 percent increase from the current fiscal year.
After years of deep cuts, K-12 schools could get a roughly 7 percent increase, with a chunk of that increase targeted for an effort to link school funding to student test scores.
The governor’s budget must still win the approval of the state Legislature. Although “Gov. Brewer’s party has unchallenged control of both chambers, Republican lawmakers have in the past several years treated the governor’s budget more as a suggestion than as a spending blueprint.
The Payson School District could get a badly needed budget increase if the Legislature adopts the governor’s budget. The district this year reported a heartening enrollment increase of about 100 students, which could bring in perhaps $400,000 in additional revenue. If the district also got a 7 percent increase in its budget over all, that could produce close to $1 million in additional funding.
However, the budget would also abandon efforts to restore funding for hundreds of millions in school building funds cut in the recession, bad news now that the district has discovered that Payson Elementary School is overcrowded in the wake of the closure of Frontier Elementary School.
But even if the Legislature approved all of the education increases requested by the governor, state spending would fall far short of restoring the cuts made in the past few years.
The budget would also provide an extra $1.8 million to help forested communities prepare for wildfires, add 212 additional Child Protective Services caseworkers, provide rural community colleges with an extra $4.4 million for workforce development and boost university budgets by an additional $40 million — partially restoring deep cuts made during the recession.
The current budget devotes 41 percent of state spending to K-12 schools, 15 percent to the Arizona Health Care Cost Containment System, 9 percent to universities, 11 percent to prisons, 8 percent to the Department of Economic Security, 1 percent to courts and less than 1 percent to community colleges.
The increased funding for the universities — most of it going to Arizona State University — likely represents good news for advocates of a four-year campus in Rim Country. The Legislature’s support for a plan to equalize per-student funding between ASU and the University of Arizona has eased ASU’s once bleak budget situation.
The governor’s budget rests on the assumption that Arizona will continue to experience a solid recovery from the ravages of the recession.
Nationally, the economy in the third quarter had a respectable growth rate of 4 percent, with consumer confidence rising.
The state’s economic projections assume a growth rate in the state this year of about 3 percent, with a roughly 2 percent increase in employment. Despite the shift to stronger growth, inflation remains below 2 percent.
The financial analysis noted that despite a sharp rise in corporate profits nationally, corporate tax collections in Arizona have fallen — and should continue to fall — thanks in large measure to a bundle of corporate tax cuts approved in the depths of the recession by the state Legislature.
“Corporate income tax collections have slowed considerably in FY 2014, as the abundance of income tax credits has expanded and the pace of refunds has accelerated. This collections pace is completely out of step with the robust growth of corporate income tax collections observed nationally,” according to the economic analysis portion of the budget summary.
Fortunately, sales tax collections have risen sharply. The state’s heavy reliance on sales tax makes the state budget very vulnerable to fluctuations in the economy and helped produce the nearly one-third drop in state revenue at the depths of the recession.
The state’s income tax receipts also rose with the recovery, with a projected increase of 9 percent for 2013.
As a result, state revenues should grow in 2014 — and the population along with it.
“The pace of domestic in-migration has held the key to growth in Arizona for decades. By all accounts, 2009 through 2011 were the slowest years for new arrivals from other states in Arizona’s recorded history. The 2012-13 period saw slight improvement although official figures are not available and data from public utility companies does not suggest significant new customer growth.”
However, the analysis raised the possibility that an anticipated sharp drop in federal spending could trigger a renewed recession.
The report noted, “the federal government injects about $65 billion annually into the state’s economy, spending up to $1.75 for every dollar in federal taxes paid by Arizona residents. Arizona’s defense industry alone collected some $13 billion from the federal government last year ... It is likely that in-migration rates will improve in 2014 and beyond ... Demographics suggest that Arizona will see significant growth in retiree populations as the economy and incomes improve.”