Tough Budget Year Ahead

House bills have been heard in the Senate, Senate bills have been heard in the House. The Appropriations Committee met on Tuesday, March 31 to hear any last bills, mostly appropriations but some outliers and Republican “strike everything” pet projects. We have voted on some of these bills (probably not all of them, depending on the whims of the Speaker) and will continue to do so in the coming weeks.  Now it's time for the budget.

You may have heard that the governor chastised the Republican legislative majority for not working on a legitimate Prop. 1-2-3 proposal. Prop. 1-2-3, provided funding for public education through increased distributions from the State Land Trust. This fund provided $300 to $400 million dollars every year for K-12 public schools but it ended in 2025. The Republican majority wants to tie Prop. 1-2-3 funding to ONLY teacher salaries (forgetting that there are many other personnel who help a school function) and/or enshrine the universal voucher system in the Arizona Constitution. Neither of these proposals are acceptable to the Democratic caucus. We are still hoping for a clean Prop. 1-2-3, meaning that the proposal would have no strings attached and the same 6.9% distribution (we wanted more but will settle for status quo). Stay tuned.

​And speaking of the budget…we have been receiving updates on the status of the state budget and the news is not good. The Big Bad Bill (HR1) will impact our budget, over $400 MILLION this next fiscal year. There are income tax reconciliation and other things to take into consideration. In addition to the HR1 budget impacts, we will also need to figure out how to finance public school infrastructure and how to improve health services in the department of corrections. These last two are the result of litigation against the state because the legislature has not been providing adequate resources in these areas. And, of course, the economy is a huge consideration. The volatility of the tariffs and now the war in Iran will likely cause inflation, and this will make it hard to predict how it will affect income into the state coffers. I’m sorry to report that it is going to be a tough budget year. More on that in the next blog post