The Farley Report from Phoenix #236: 1-20-16

Last week I shared with you the detail-free vision that Governor Ducey laid out for the state in this year’s opening day speech. Last Friday afternoon he released the budget numbers to go with that vision, and it’s not pretty.

Details follow this brief Farley Report pledge break…


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—> Yesterday morning we Appropriations Committee members in the House and Senate met jointly to hear from the Governor’s budget director Lorenzo Romero about how Gov. Ducey proposed to apportion our state dollars, now that we have a combined projected FY17 cash balance and rainy day fund of (in his projection) just under $1.1 billion.

The total time allowed for this hearing was 90 minutes for a presentation by the Governor’s Office, another by the Joint Legislative Budget Committee staff, and member questions — who were limited to one question each. There was no public testimony allowed. And this was the only public hearing that will be held to examine the Governor’s budget proposal. The lack of transparency in this process is both shocking, and shockingly familiar, around here. 

I used my question to clarify Gov. Ducey’s position on the JTED career and technical public education programs that have been proven to dramatically increase graduation rates, improve the preparation of our workforce, and give our kids the resources they need to thrive and boost our economy. Nearly 100,000 Arizona public high school students are currently enrolled.

Last year, claiming there wasn't enough money, the Governor and the legislative majority enacted -- in advance -- cuts of $30 million to JTED/CTE programs for Fiscal Year 2017 (40% of their budget). JTED Superintendents tell us those cuts, if allowed to stay in place, will lead to the shutdown of their programs. 

The cuts must be reversed, with the Governor's signature, by March 15 at the latest to avoid permanent damage. 

Instead, Gov. Ducey proposes a new grant program also worth $30 million, creating confusion among JTED supporters who believed at first glance that he was indeed seeking to reverse the $30 million in cuts. 

But that is sadly not the case. I asked Mr. Romero yesterday if the Governor in his budget intended to reverse the JTED/CTE cuts enacted last year that puts these job and tech training programs for high school students in a death spiral.

He told me directly that the Governor has no intent to reverse those cuts. 

All this when we have more than A BILLION DOLLARS in available money, if you include the rainy day fund!

His $30 million proposal is still lacking in details but is described as a public-private grant fund, making available $10 million a year for three years that would be doled out as grants to local companies who partner with JTEDs and offer matching funds. It would do nothing to provide the $30 million annually required by the state’s JTEDs as operating funds.

This could be an interesting program if administered in addition to the restoration of the cuts, but if this competitive grant program is the only JTED policy enacted, the Pima County JTED Superintendent Alan Storm told me that by the time the grant applications are available, there would be no one left to apply — our JTED would be out of business.

The end of JTED/CTE programs would put our state's future economic viability at risk, and eliminate one of the best programs we have to reduce poverty. We must act NOW to reverse those cuts legislatively, and there is strong bipartisan support to do that.

Chris Ackerley (R-Tucson) in the House and both Kimberly Yee (R-Glendale) and Appropriations Chair Don Shooter (R-Yuma) in the Senate have introduced bills to fully restore the $30 million in cuts as an emergency — with no strings attached — to save our JTEDs, and I have introduced a bill (SB1170) to do that in addition to restoring the fourth year of JTED that was cut in 2009, and bringing the Pima County and Maricopa County funding rates to 100%. 

Nearly EVERY member of the House and Senate from both parties has signed on to at least one of these bills, and they have the strong support of the business community — from the Arizona Chamber to local chambers to executive groups. I cannot understand why the Governor would decide to kill our JTED/CTE programs in the face of all that support from across the board. 

But I do believe that all that support can convince him to change his mind, especially if you call him and add your voice to the chorus. You can reach the Governor’s office at 602-542-4331 or write an email on his online contact page here

—> And that’s just one problem with the Governor’s proposed budget. You can read a good rundown from veteran Capitol scribe Howie Fischer here, and I will share a few details as well.

> He brags about “pumping” $90 million into K-12 education, but more than half that is baseline student population growth and basic inflation (which is not new money, it’s what you need to provide the same level of support provided last year with more students and higher costs), $30 million more is that three-year JTED grant program described above, and the rest is non-classroom administrative costs.

> He does recommend adding $15 million more in each of the next two years for school building maintenance, but that is a tiny fraction of the identified needs statewide in the form of leaky roofs, busted AC systems, and torn-up floors. Before 2008, we provided around $250 million a year for building renewal as formula funding, but since then we have only provided around $15 million a year in funding parceled out by grant application. 

> He wants money to start up a new Governor’s Office of Education to run programs like his $29 million fund to help privately owned charter schools construct new buildings (despite serious constitutional issues). We already have massive fights between the State Board of Education and the State Department of Education, so perhaps he thinks adding another education body to the mix will help? 

> He is asking the Legislature to cede appropriations authority to the Executive so that he can make unilateral budget cuts midyear without legislative approval, an unprecedented power grab that threatens our state’s constitutional separation of powers.

> While he won’t restore the $30 million in JTED cuts, he wants to spend $31.5 million on a new DPS Border Strike Task Force which is opposed by all 15 of Arizona’s sheriffs.

Universities (cut by nearly $100 million last year) will get none of those funds back, but will get to keep a few million that they saved by refinancing their loans. But private prisons get 2,000 more beds (for $24 million a year over the next twenty years), with a contract that guarantees we incarcerate at least 1,800 more prisoners per year on average over that time. If we don’t invest in education, we’ll spend a lot more in prisons. Not sure how this squares with his stated desire to tackle prison reform…

>The Child Safety budget focuses on children removed from their homes, with no additional money for the prevention or early intervention programs that can keep kids safe in their original homes in the first place. This move will guarantee that we continue to be the only state with an increase in the rate of kids removed from their homes — a number now approaching 20,000. If we don’t invest in prevention, we have to pay much more for state care.  

> He proposes no new spending on transportation projects, and increases the amount of money raided from the state HURF gas tax fund to $93 million (which would otherwise have been spent on road maintenance). 

> There will be a huge leftover cash balance unspent, despite all the legitimate needs to invest in education, child safety, transportation, or economic development. You want numbers? These rise to the level of hoarding: $621 million in FY17, $857 million in FY18, and $1.1 billion in FY19. Even conservative Republic columnist Bob Robb calls this budget “excessively austere.”  “While K-12 education should be at the front of the line, programs throughout state government are struggling to maintain services with substantially reduced resources. This isn’t a time to be sitting on idle cash. State programs that never recover from the recession while the state sits on $1.6 billion in cash isn’t the outcome we should be planning to achieve. That would be absurd. That’s not a responsible use of public monies. That’s not a fiscal direction toward which the state should purposely embark. This is disingenuous and an abdication of leadership,” says Robb.

> The scuttlebutt is that Gov. Ducey is seeking to use all those cash balances to enact a big corporate tax cut, or perhaps the disastrous elimination of the state income tax — which will only benefit the rich. The fact that he left out any discussion of tax cuts from his budget — saying those will come in time — bolsters this supposition.  

—> OK, I’ll stop for now. There is so much to talk about, but I don’t want to try your patience any longer than I already do with these lengthy missives. Next week for sure, I’ll tell you about my new idea for how we can end homelessness in Arizona by closing a loophole for out-of-state real estate investors. 

Thanks for your continuing faith in me as your Senator. 


Steve Farley

Senator, District 9, Tucson

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