Key Takeaways
- This is only a summary of the budget framework. We will update when actual budget bills are introduced.
- This budget agreement will cut over $3 billion in state revenue. This is lost revenue that could go towards addressing the state's teacher shortage and providing resources to meet our students needs.
- Budget includes only $100 million in new spending for K-12 education, with many of the funding proposals not going into effect until FY24. However, this budget includes $20 million for parents to bus kids out of their neighborhood schools, funneling more money out of public education into private schools.
This framework only includes spending and revenue impacting the General Fund. Funding generated through Prop 301 and Prop 208 are not reflected but would show up when official budget bills are introduced. This framework is only a spreadsheet so there is yet to be any more specifics on what some of the budget items are, or how they would be implemented. That language is included in the budget bills.
The biggest component is the 2.5% flat tax proposal that will result in $2.5 billion in cut taxes over the next 3 years. This is a permanent tax cut so once it is implemented, this cut will be ongoing and will be difficult for the legislature to remove. This means lost revenue that could have been invested in our public schools. The plan also looks to reduce the impact of Prop 208 on those high income earners by setting a top marginal tax rate of 4.5%. In order to do this they will be lowering the overall income tax rate for those individuals so that even with the 3.5% surcharge generated by Prop 208, those individuals would not pay more than 4.5% overall.
In order to make the 4.5% top marginal tax rate work, this budget would propose an additional cut in revenue of $827 million in FY 22, $488 million in FY 23, and $369 million in FY 24. This number reduces in FY 23 and FY 24 because the flat tax rate will be rolled out. These cuts are considered “one-time” but will likely be ongoing in future budgets.
Combined with additional proposed tax cuts, this budget agreement looks to cut over $3 billion in revenue.
Instead of investing in education this budget framework includes only $100 million in new spending for K-12 education, with many of the funding proposals not going into effect until FY 24. Some of the $100 million includes ongoing spending of $50 million for Special Education funding and $1 million for Gifted funding, and minimal one-time only spending including $5 million for statewide assessments.
Breakdown of K-12 Spending
|
College Placement Exam Waiver |
$1.3 million |
|
College Credit by Examination Incentive Program |
$2.5 million |
|
Literacy Coaches |
$3.1 million |
|
Kindergarten Entry Assessment |
$1.5 million |
|
Dyslexia Screening and Training |
$1.3 million |
|
Teacher Reading Instruction Exam |
$1 million |
|
Alternative Teacher Development Program |
$500,000 |
|
Special Education Funding |
$50 million |
|
Gifted Funding |
$1 million |
|
Statewide Assessment Funding |
$5 million |
|
Procure Statewide Gifted Assessment |
$850,000 |
|
Extraordinary Special Needs Fund Deposit |
$5 million |
It is possible that additional spending will be added to this framework, but any additional proposed K-12 spending would be from Federal dollars coming into Arizona and not an effort of our state legislature to invest in public education.
Additionally, there is spending in this budget agreement that will be harmful to public education. They are proposing $10 million in FY22 and $20 million in FY23 go to the Department of Administration to run a K-12 Transportation Grant program that will further funnel public money into private schools. This grant program originated as two different bills this session (SB1683 and SB1280) however the money allocated in this budget proposal is higher than what was originally prescribed in those bills.
