The Legislature Thursday morning adopted a $10.4 billion budget for fiscal year 2019. The cornerstone of the package is a three-year, $700 million infusion of funds to raise average statewide teacher salaries 20 percent by 2020. This plan was backed strongly by the Arizona Chamber of Commerce & Industry and the broader business community.
The 20×2020 plan was devised by Gov. Doug Ducey in response to an incredible moment in Arizona: firm public consensus that more resources need to be directed to teachers now. The governor exercised leadership in designing a bold yet responsible plan, rallying support, and getting it passed in a short period of time.
The budget sends a clear message that Arizona has emerged from the Great Recession stronger than ever, and its leaders value teachers.
AN UPWARD TRAJECTORY
The spending package builds on the momentum established earlier this legislative session, when lawmakers passed and Gov. Doug Ducey signed a 20-year extension of Proposition 301, the .6 percent sales tax devoted to education. The extension of 301 eliminated a major source of uncertainty facing school districts and charter operators, ensuring a stable education funding source until 2041. That uncertainty resulted in some districts setting aside dollars in reserve — rather than in the classroom — over concerns that the law would soon expire. The extension of Proposition 301 also benefits our universities and community colleges, which were included in the original proposition.
This activity is all part of a larger trend, as we’ve seen an upward trajectory in education funding for the past few budget cycles.
The fiscal year 2018 budget adopted last year included $163 million in K-12 funding above inflation. It also included a $1 billion university bonding package for research infrastructure.
In spring 2016, lawmakers and the governor agreed to a fiscal year 2017 budget that contained over $180 million in new K-12 funding, $53.6 million for public school capital improvements, and a $29 million restoration of Career and Technical Education funding.
In May 2016, Arizona voters passed Proposition 123, which will result in a $3.5 billion investment in K-12 over a 10-year period. Beginning in July 2016, the first payments were made to schools. Without Proposition 123, the campaign for which was led by Gov. Ducey, schools would have received only about $47 million in both FY 2016 and FY 2017 from the state land trust. Instead, passage of Proposition 123 funding resulted in a 4 percent average statewide raise in the first year.
SUSTAINABLE AND RESPONSIBLE
This is a responsible budget that reflects the strength of Arizona’s recovering economy without cutting dollars for vulnerable populations.
The teacher pay will be reflected in the base, which means it’s permanent, it’s ongoing, and will account for inflation going forward. These aren’t one-time bonuses.
And it’s not just teachers who are beneficiaries under this budget. The budget directs $371 million over five years for the restoration of Additional Assistance, with $100 million coming this year. This frees up more dollars at the local level for other priorities including raises for support staff and classroom supplies. Additionally, all schools are provided an annual inflationary increase to support cost of living increases and other expenses.
What’s more, the budget continues efforts to expand excellence, by directing a nearly $2 million supplemental appropriation in fiscal year 2018 to the previous budget’s nearly $38 million in results-based funding for sustaining, expanding and replicating highly performing schools, with the highest per-student awards going to high poverty schools closing the achievement gap. The budget also expands the number of subject areas that are available to schools and teachers helping students pass coursework that results in college credit.
The revenue projections are realistic and align with historical norms. Economists concur.
Moody’s Analytics estimates personal-income growth in Arizona to average 6 percent this calendar year, which covers half the state’s fiscal 2018 and the first half of fiscal 2019. As reported by The Arizona Republic, economist Jesse Rogers from Moody’s said, “The state government forecast is reasonable.”
The Legislature’s Finance Advisory Committee agrees, and it updated its April report to indicate as much.
STRONG ECONOMY, STRONG SCHOOLS
A 20 percent pay increase by the start of the 2020-21 school year is possible because of a strong, healthy economy, which is the result of state leaders pursuing public policy that has enhanced Arizona’s economic competitiveness and led to increased, sustained job growth.
The state has added over 160,000 jobs since 2015, and we’re projected to add another 150,000 jobs over a two-year period. When our economy grows, teachers win.
Arizona has a brighter future because of this budget. With its unprecedented investment, we can say with confidence that Arizona, which has been a leader in academic progress over the past 10 years, will do even better. Gov. Ducey, the Legislature, and especially our teachers, deserve our thanks.