Arizona Gov. Ducey signs $9.1 billion plan for 2016 budget year he says sets stable course

Economic IndicatorsAssociated Press

Gov. Doug Ducey signed a $9.1 billion budget plan for Arizona on Thursday that keeps K-12 school funding essentially flat, cuts about $100 million from the state's universities and eliminates state funding for community colleges in Pima and Maricopa counties.

The Republican governor touted the spending plan for the 2016 budget year that starts July 1 as a bipartisan effort that puts the state on a path to a structural balance by next year.

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He also says it protects the most vulnerable by protecting key social service programs.

Democrats call that pure spin, saying just one Democrat voted for the plan and four Republicans opposed it when it passed over the weekend. Sen. Carlyle Begay, D-Ganado, got $1.2 million for transportation projects, up to $160,000 from excess state lottery cash for tribal colleges and a provision allowing tribes to qualify for sales tax funds to support community colleges. He said he did so "to support my district."

Democrats also point to cuts in Medicaid, welfare, child safety and schools and say Ducey is not protecting Arizonans who need help.

"I would argue adamantly against the governor that this does nothing to protect the most vulnerable," said House Minority Whip Rebecca Rios, D-Phoenix. "In fact, it absolutely puts more of the most vulnerable in jeopardy."

She pointed specifically to cuts to general relief welfare payments, which provide up to $278 a month for a family of three. The budget saves $9 million by limiting payments to one year instead of two.

"We're talking about a cash benefit that ultimately goes to take care of food or diapers or whatever necessities the poorest of the poor need," Rios said.

Republicans who pushed the budget through last week said they had no choice but to tighten the state's belt.

"Balancing this budget and moving the state forward in a fashion where we're actually going to operate within our means will ultimately benefit all people and certainly the most vulnerable," said Sen. Steve Yarbrough, the majority leader. "I hate it, but it was necessary. Absolutely. What would you do with a $1.5 billion deficit — cut nothing?"

The overall budget is more than $100 million less than last year's $9.23 billion spending plan and uses $113 million from the state's rainy day fund to make it balance. It also takes $220 million from other state funds, including $100 million from a state employee health care fund in 2017.

Schools get the most money, $3.9 billion, but the budget does not fully account for more than $336 million the state has been ordered to pay schools for skipping required inflation adjustment in recent year. It provides an extra $74 million in inflation funding that Ducey contends is what should be owed.

Schools will be required to cut $123 million in non-classroom K-12 spending. The budget calls for an increase of $102 million in overall school spending, but much of that is required to make up for inflation and increased student counts. Democrats call the plan a net cut in spending.

Medicaid gets $1.2 billion, but the budget cuts provider reimbursement rates by 5 percent. That $127 million cut in state aid will result in the loss of more than $500 million in federal matching funds that could cause hospitals to discontinue services.

Prisons get $1.1 billion, but a Ducey plan to add 3,000 private prison beds was scaled back.

The state's three universities took a 13 percent cut and will receive $657 million.