Glenn Hamer

The state Legislature Monday night passed a $9.23 billion budget for fiscal year 2015. Gov. Brewer has the final say on the budget bills as they await her decision to veto or sign, but all signals suggest that she will approve the package.

Crafting state budgets is not easy. They require painstaking negotiations and the occasional ideological standoff. There is always a necessary tension between the desire to spend more money and to ensure that we are good stewards of taxpayer dollars. But the majority party deserves credit for coming together and working toward a fiscally sound budget that positions the state for growth, while lessening the likelihood that Legislatures in the coming budget cycles will be faced with having to make deep cuts. Recall that it wasn’t long ago that the state almost couldn’t pay its bills due to overspending. The Legislature deserves kudos for the practice of budgeting in three-year cycles, which has helped increase scrutiny on current-year spending and the implications of those decisions on future years’ budgets. 

Education looms large in this budget. The package funds a new student assessment aligned with the state’s more rigorous academic standards. As some states are scrapping higher standards, Arizona has not only resisted calls to turn back the clock on internationally benchmarked education standards, but has committed to funding a measurement tool that will let us know how our students are performing compared to their peers around the country.

The budget also calls for increased spending in career and technical education, establishes parity in funding between the state’s public universities and, thanks to the work of a bipartisan conference committee, saw an extra $4.5 million directed to the universities. The budget also directs resources to the Department of Education’s aging data system for needed upgrades. It also funds at $20 million an initiative spearheaded by Gov. Brewer to tie some education dollars to student performance. And the budget continues funding for the state’s third grade Move on When Reading program.

The budget also allows for $35 million in tax relief, and already the Legislature has sent important legislation to the governor that will eliminate the sales tax manufacturers pay on their electricity and natural gas consumption. Eliminating this tax is an important reform that will make the state more competitive in its pursuit of good-paying manufacturing jobs.

Another bill headed to the governor would index the next tax year’s tax brackets to inflation, a reform that helps make sure that a rise in the cost of living doesn’t inflict a backdoor tax increase on taxpayers.

And the Chamber is strongly supporting passage of a bill that would phase-in a reduction of the insurance premium tax over several years, helping to provide some modicum of parity between the way insurers and other corporate income taxpayers are treated.

On the transportation front, the Legislature took steps in this budget to slow the cost shifting away from the Highway User Revenue Fund to the tune of $30 million. Transportation and infrastructure will likely be a major area of focus for the next governor as we look for ways to make up for the cuts in funding during the depths of the recession.

The Legislature also gave a nod to the state’s international standing by setting aside money to underwrite the costs of a Mexico City trade office. As a participant in trade delegations to Mexico led by Speaker of the House Andy Tobin and Phoenix Mayor Greg Stanton, I’ve seen firsthand the eagerness to strengthen our relationship with our southern neighbor, our largest trading partner.

There’s more left to be done. While the Legislature has provided significant additional funding for Child Protective Services, it need to come back to complete the overhaul of child and family welfare services, a major priority of the governor’s. While there are different thoughts on the best policy fixes, there’s no one at the Legislature defending the status quo.

This is not a perfect budget; no budget is. But this spending package, passed in a timely manner by the Legislature, will serve our state well. For that our lawmakers and governor deserve a lot of credit.

Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry.