2020 Arizona budget focuses on education

February 6, 2019

Gov. Doug Ducey has tw two priorities when it comes to the budget: raising teacher pay and having a balanced budget.

“And this budget will do both,” said Matt Gress, Ducey’s budget director.

Gress said Arizona is currently experiencing all-time highs for employment rates and 10-year lows for unemployment rates. He also noted that Arizona is first in the country for construction job growth, and second in manufacturing job growth.

“As a result of this healthy labor market in Arizona our general fund revenue collections are up,” he said.

Through the end of November, the most recent month available for reference, the state was up $175 million.

The Governor’s Office expects a 6.8 percent general fund revenue growth rate this year. The spending growth rate for FY 2020 is proposed at 9.2 percent.

“A majority of that, however, is one time in nature,” Gress said, noting the goal of financial flexibility should there be economic problems down the road. “Those one-time investments are targeted and they’re strategic in order to maximize the state’s investment.”

However, he said Arizona isn’t saving enough money, another issue being tackled by the budget. According to financial experts, Gress said, Arizona should save anywhere from 10 to 15 percent of total general fund revenues in case of an economic downturn. Historically, Arizona has saved about 5 percent.

The governor’s budget will increase that rainy day fund to about $1 billion from around $450 million.

The executive budget proposes to save half of the $1.1 billion cash budget for the next three-year window, with the other $538 million being committed to “executive initiatives,” the budget director said.

Half of that $538 million is slotted for education. When taking into account recurring costs, such as enrollment growth, he said 70 percent of FY 2020’s spending is going toward education.

Infrastructure projects and other items of interest from the budget will be covered in subsequent articles, as will citizen responses to Friday’s briefing. Those comments mainly dealt with education and securing Arizona’s future when it comes to water.