The Farley Report from Phoenix #215: 1-21-15

Sorry to be such a downer last week. I really wanted to be more optimistic this report, but after Governor Ducey released his first budget last Friday, I knew that wasn't gonna happen. 

Budgets are moral documents. They make a statement about what our government values, and what our government feels is unimportant. 

While campaigning for office, the Governor repeated a lot of hopeful statements. "Classrooms First," "Opportunity for All," and "Open for Business" come to mind. 

Sadly, the main statement made by his budget is that the best way to improve yourself in Arizona is no longer education, it's prison. 

Here's one topline: While K-12 education, community colleges, and universities get cut yet again (despite a court order requiring us to fully fund voter-approved K-12 inflation costs). At the same time, the Governor wants to build 3,000 new private prison beds at the cost of $55 million a year.

Here's another: While our hospitals who serve AHCCCS patients will suffer a provider rate cut of 3% on April 1 and a cut of other funds to assist high-poverty hospitals (DSH Pool 5), our private prison healthcare providers get a rate INCREASE of 3%. 

And another: Pima County is singled out for massive cuts to TUSD ($8 million), county government ($9 million, plus 25% of the cost to incarcerate juveniles in state juvenile corrections, plus huge cuts to UAMC and University Physicians, plus more raids on HURF funding for transportation, plus more…)

How about yet one more: $303 million will be raided from special state funds for things like transportation, job training, economic development, and job creation.

And a coda: Not one dime is touched of the massive corporate tax giveaways that got us into this mess in the first place, despite their clear failure to produce more jobs, more businesses, higher wages, or anything else in exchange.

Here are some more details that paint a dark picture of what Gov. Ducey's budget stands for:

-->His budget may end up being a best-case scenario, since its revenue projections are $250 million more optimistic than the legislative revenue projections for FY16, so the legislative leadership will surely demand more cuts.

-->K-12 education funding is cut by $13.5 million, in part because the Governor only funds the inflation increase at $75 million, while the court has already ordered him to fund the inflation increase at a $318 million level. That means that once that case is final, the schools will do better (and they desperately need that money and more!), but there will be another $240 million in cuts or revenues needed and I'm guessing they will go after the universities which get a $75 million cut for now. Community colleges only in Pinal, Maricopa, and Pima are cut by 50%.

-->TUSD faces an $8 million cut and Pima County a $9 million cut from the dramatic reduction of the QTR property tax formula that only applies in Pima County, possibly leading to higher property taxes for us Southern Arizonans. All K-12 public schools also must cut $115 million from librarians, cafeterias, computer labs, transportation, security, principals, and all other non-classroom funding. 

In the joint Appropriations Committee, I asked the Governor's budget director how he thought Pima County should respond to these hardships forced by Gov. Ducey only upon us -- with massive service cuts, or property tax increases. He suggested we cut services and "live within our means". He did not say anything similar about Maricopa County.

-->$25 million in school performance funding is eliminated and instead used to back charter school debt to buy new buildings which will be privately owned.

-->Programs for parents of kids with autism, the homeless, and long-term care are eliminated, and childcare subsidies are cut again.

-->State funding for tourism marketing is eliminated.

-->Cities and counties will have to pay for collection costs at the Department of Revenue.

--> New tax collectors will be hired for the Department of Revenue to go only after individuals, not corporate tax dodgers. 

These are choices the majority has made. Choices to spend on ineffective corporate tax giveaways instead of the proven economic development engine that is education at all levels. We CAN afford to invest in education and transportation. In fact, we can't afford not to. 


The justification for the new spending on private prison beds was very interesting. The budget director shared with us a chart of the vacancy rate for male medium security beds which bounced around -1% to +2% over the last few years. Then for reasons he was unable to explain, the chart turns sharply downward for the next two years toward a vacancy rate of -10%. Unless someone is planning a mass incarceration scheme of some type, the chart made no sense, except to justify more spending on private prison beds. 

Strangely enough, the Governor also proposes actual prison reform to reduce the juvenile prison population and achieve savings there. He suggests sending home all prisoners under age 14 (there are some!) and all prisoners convicted only of a misdemeanor who are not seriously mentally ill. When I asked the budget director why we could not also examine prison reform for adult prisoners to create savings for the rest of the system instead of throwing money away on new private beds, he said he "would be happy to discuss the process of developing the budget in private."

In all we legislators were only able to publicly question the Governor's staff for 25 minutes at Tuesday's joint Approps committee. The rest of the work will be negotiated between the Governor, the House Speaker and the Senate President in private. There are still some major differences among them, but I am afraid that the deal will be even worse by the time they reach agreement. We will find out in about a month what they decide. Trust that I will be fighting for a better deal for Pima County and for all of us.

Before I leave you tonight, this week's bit of happy news is that my bill to force disclosure of "dark money" contributions in political campaigns (SB1101) looks like it has some legs in the legislature. More on that next week!

And I was honored to be a part of the judging panel for the Arizona Commission on the Arts' ArtTank grant competition in Peoria last night. It was inspiring to see artists and arts organizations of all types showing off their talent and smarts and entrepreneurial spirit to compete for some of the funds I helped obtain from the interest off the Rainy Day fund. Their ideas were potentially transformative and will return our investment many times over, since creativity has become the most important element of our 21st century economy. 

I'm already working to bring that arts funding back into our budget this year, and I have some unexpected allies from the other side of the aisle in that effort. There is hope after all.

Thanks for your continuing faith in me as your Senator. 


Steve Farley

Senator, District 9, Tucson


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