How is gov­er­nor pay­ing for raises?

Ducey plan for teach­ers still lean on ex­act fig­ures

The Arizona Republic - - Front Page - Richard Rue­las

For weeks, as the #RedForEd move­ment gained steam and laid out de­mands — in­clud­ing a 20 per­cent raise for teach­ers — Gov. Doug Ducey and law­mak­ers claimed they were of­fer­ing ev­ery­thing they could.

The state sim­ply didn’t have enough money to fund such a raise, they main­tained.

But Thurs­day, Ducey touted a plan that would give teach­ers a 20 per­cent raise by 2020.

The funds would not come from ac­count­ing gim­micks or through new taxes, he said. It would be a com­bi­na­tion of nips and tucks in agen­cies, jet­ti­son­ing some of the pro­pos­als on Ducey’s wish list and a bunch of money that ma­te­ri­al­ized re­cently.

How much of each is un­clear.

The gov­er­nor out­lined only broad strokes. His staff of­fered a few more de­tails, but no fig­ures. The

Ari­zona Re­pub­lic asked Fri­day when num­bers might be avail­able, but has yet to re­ceive a re­sponse.

The Gov­er­nor’s Of­fice dis­trib­uted a fact sheet out­lin­ing the pro­posal. It ended with a long sen­tence de­tail­ing where the money for the plan would come from.

The key part of that sen­tence: “The state’s rev­enues are on the rise and have been higher than orig­i­nally pro­jected, com­bined with a re­duc­tion in state gov­ern­ment op­er­at­ing bud­gets through strate­gic ef­fi­cien­cies, caseload sav­ings, and a roll­back of gov­er­nor’s of­fice pro­pos­als in­cluded in the FY2019 Ex­ec­u­tive Bud­get … ”

If gov­ern­ment was sup­posed to run like a house­hold, a metaphor of­ten used by politi­cians, this was the equiv­a­lent of win­ning a $100 jack­pot at a casino. Ex­cept, in the state’s case, it was ap­prox­i­mately $262 mil­lion.

That was the num­ber given to law­mak­ers on Tues­day. It is the to­tal, so far, of how much more money the state has col­lected than it an­tic­i­pated. Those rev­enue pre­dic­tions dic­tated the bud­get passed last year, the one the state is now op­er­at­ing un­der.

The state has had a string of good months, with rev­enues out­pac­ing those pro­jec­tions. The state’s bean coun­ters, the Joint Leg­isla­tive Bud­get Com­mit­tee, rec­om­mended that the state not spend all the sur­plus, be­cause lean months could be com­ing be­fore the end of the fis­cal year in June.

But, the bud­get com­mit­tee said in Jan­uary, that the state could safely count on a $109 mil­lion in ex­tra, un­ex­pected, sur­plus cash.

It’s un­clear what num­ber Ducey has fig­ured into his spend­ing.

‘Caseload sav­ings’

These are two words that take a lot of ex­plain­ing.

Es­sen­tially, Ari­zona is ex­pect­ing to spend less than it thought on health care for the poor, specif­i­cally, for peo­ple on Med­i­caid.

Chalk that up also to the grow­ing econ­omy, Ducey’s chief of staff, Kirk Adams, said.

More peo­ple are em­ployed, mean­ing fewer peo­ple are re­ly­ing on Med­i­caid for health care, he said.

The state, as part of the Af­ford­able Care Act, agreed to ex­pand Med­i­caid cov­er­age. The new cov­er­age raised the amount of money some­one could make and still qual­ify.

The fed­eral gov­ern­ment cur­rently picks up all the cost of the ex­pan­sion and most of the cost for the pop­u­la­tion pre­vi­ously cov­ered. It does re­quire Ari­zona to pick up some of the over­all Med­i­caid tab.

Ari­zona pays for some of its share by re­quir­ing hos­pi­tals to pay a fee. Worth not­ing: Ducey’s bud­get re­leased in Jan­uary, ac­cord­ing to the Ari­zona Capi­tol Times, had al­ready called for an in­crease in those hos­pi­tal fees to fund some of his new spend­ing pro­pos­als, most of which were ed­u­ca­tion-re­lated.

The state had bud­geted some $1.7 bil­lion in Med­i­caid spend­ing. But, as the first quar­ter drew to a close, Adams said, the state re­al­ized it was spend­ing far less than that. Adams de­clined to give a fig­ure.

To ex­tend the house­hold metaphor, say a fam­ily bud­geted $1,000 for sum­mer air-con­di­tion­ing bills. But, after June, re­al­ized it was spend­ing sub­stan­tially less than ex­pected. The house­hold might safely pre­dict that it would only spend $750 on air con­di­tion­ing and start think­ing of ways to spend that cash else­where.

Of course, past is not pro­logue.

But the state ap­pears to be betting that the re­duc­tion in Med­i­caid spend­ing is a trend that will con­tinue.

How much they are mak­ing that bet for has not been re­vealed.

“… a roll­back of gov­er­nor’s of­fice pro­pos­als in­cluded in the FY2019 Ex­ec­u­tive Bud­get … ”

Ducey called for a wish list of pro­pos­als in his bud­get and State of the State ad­dress.

There was a wrong­way driver night watch pro­gram. He wanted to give food banks, par­tic­u­larly in ru­ral ar­eas, equip­ment to store fresh foods. He wanted a tax cut for vet­er­ans, one hav­ing to do with how much of their re­tire­ment pay is taxed.

And that’s just a sam­ple. Some of those pro­pos­als could have been him di­rect­ing agen­cies to spend money. Some of those pro­pos­als might have been in­tended as lever­age for closed-door dis­cus­sions as the bud­get is crafted.

Ei­ther way, Ducey seems to be ready to let some things go.

His spokesman, Daniel Scarpinato, said Fri­day, “There are a num­ber of ini­tia­tives we’re will­ing to put on the ta­ble.”

Which ones — and how much they cost — are un­clear.

“… a re­duc­tion in state gov­ern­ment op­er­at­ing bud­gets through strate­gic ef­fi­cien­cies … ”

This ap­pears to be a long way of say­ing small cuts here and there.

The state gov­ern­ment is big. The bud­get is $10.1 bil­lion.

Ducey is say­ing there could be some wig­gle room in all that spend­ing. That there could be enough “ef­fi­cien­cies” — read: cut­backs — that can add up to some­thing sig­nif­i­cant.

Again, how much Ducey’s pro­posal ex­pects to find re­mains to be seen.

Will it be enough?

An­other thing to note about Ducey’s plan: He wants to make the teacher raises per­ma­nent.

But, ac­cord­ing to the gov­er­nor’s pro­posal, much of the fund­ing is com­ing from one-time wind­falls. Fi­nan­cially, things are break­ing the state’s way. But, there is noth­ing guar­an­tee­ing this con­tin­ues.

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