Plan to up teacher pay gets mixed reception

While Gov. Doug Ducey rallies support for his education-funding proposal among his supporters, teachers still are deciding whether they will strike and a variety of groups outside the governor’s circle are voicing concerns.

Several chambers of commerce came out in favor of the governor’s plan Wednesday, though those groups were not asking for more education funding when Ducey announced his initial budget in January.

Following multiple demonstrations

and strikes in other states, Ducey reversed his initial budget proposal of 1 percent raises with a proposal for another 19 percent in the next three years (counting 1 percent from last year).

Most of the money to pay for it comes from higher projections of tax revenue, but a portion comes from cuts, sweeps and other policy changes proposed by the governor.

Those include reduced funding for universities, developmentally disabled programs, the arts and hospitals.

Some agencies are reluctant to talk about the governor’s plan — he also serves as their boss — but others said they would prefer to see cuts elsewhere.

The Governor’s Office has said that no state services would be affected by the proposal.

“No programs ... will be impacted,” said Matt Gress, director of the Governor’s Office of Strategic Planning and Budgeting.

Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry, said Wednesday that more than 20 chambers of commerce support the governor.

He credited Ducey’s policies for boosting the state economy, which he said has led to more tax revenue that makes the teacher pay increase possible.

“It is a lot easier to have this conversation when your tax revenues are surging because of good economic policies,” Hamer said. “Right now we recognize the No. 1 issue facing the state is teacher pay. The governor has what we believe is a responsible and very good plan to do just that.”

The Governor’s Office also touted a poll released this week commissioned by the firm Data Orbital, which showed 75 percent of people surveyed supported Ducey’s plan to increase teacher pay.

The poll simply asked people if they approved of Ducey’s idea to increase teacher pay by 20 percent by 2020. It did not mention how the plan was funded.

Other groups oppose the details of the governor’s proposal, though.

Arizona’s three public universities wouldn’t get $8 million to help fund the cost of educating Arizona residents at the schools as previously proposed, budget documents show.

They take one of the bigger cuts in the budget revision for teacher raises.

Arizona’s universities understand lawmakers and the governor must prioritize their spending, and K-12 is important to universities as well as the state, said John Arnold, vice president for business management and financial affairs at the Arizona Board of Regents.

“But we certainly believe public universities play an extremely important role in the development of the state as a whole and our economy,” he said,taking a measured tone and not criticizing Ducey.

Over the past few years, the Legislature and Governor’s Office gave universities one-time funding for capital projects, freedom schools and operating funds. That partially makes up for big cuts when the state budget was in disarray.

But the universities have repeatedly taken a budgetary backseat to K-12 education as public support for increased school funding has grown.

The universities have asked that the state help support 50 percent of the cost of educating Arizona resident students. Now, the state contributes 34 percent to the cost of educating Arizonans at the three universities.

It would take $252 million to bring the state to 50 percent, Arnold said.

The universities have gotten “some acknowledgment” of the funding idea, but nowhere near the level required to get to 50 percent, he said.

The universities are also set to receive $27 million for the first year of payments for a 20-year bonding plan to build and maintain facilities, which the Legislature and governor approved last year.

That piece of the budget so far hasn’t been altered, he said.

“Our understanding is those dollars are not at risk at this time,” Arnold said.

Another place the governor is proposing to cut, according to budget documents, is in funding for initiatives for people with developmental disabilities.

State lawmakers had proposed $6 million in one-time funding for the Department of Economic Security, and Ducey proposes to cut that to $4 million.

Department officials did not respond to multiple requests for comment Wednesday.

Rep. Ken Clark, D-Phoenix, said it was his understanding that the money was intended for raises for the people who provide services for people with disabilities.

He said his office has been contacted by “a lot of folks” seeking much more funding than even what the Legislature had proposed.

“These people have been underpaid for at least a decade,” Clark said. “The people who go out and take care of adults and do the very difficult work, from helping them go to the bathroom to

helping them get through their day.”

Clark said that he would prefer a more secure way to pay for teacher raises than by pulling from other programs.

“I am really saddened to see the governor playing this game,” Clark said. “He is dividing groups against themselves around the state so that he can pretend to promise funding for educators.”

Ducey’s budget documents also show he wants to cut $2 million in one-time funding from the Arizona Commission on the Arts. The commission uses its funds for grants to a variety of non-profit arts groups around the state.

If they don’t receive any money this year, “our executive staff and Board of Commissioners would have to make some very difficult decisions about what to cut and to what extent,” communications director Steve Wilcox said Wednesday.

“All options would be under consideration.”

The commission has been funded through one-time appropriations generated from interest on the state’s Rainy Day Fund the past two years.

It didn’t receive any funding from the state in 2016, as the Legislature sought to balance the budget, according to the agency’s funding request sent in August.

“As you may know, the Arts Commission sustained sizable funding decreases during the recession,” executive director Jaime Dempsey wrote in that request. “The agency’s $2.1 million General Fund Appropriation was eliminated, the $20 million, 12-year-old ArtShare Endowment was swept, and the agency’s remaining fund source, the Arts Trust Fund, endured several reductions.”

The commission’s grants help organizations such as the Childsplay in Tempe, which teaches acting and performs for children, said Catherine Foley, director of Arizona Citizens for the Arts, which works with the commission.

“Their grant helps provide discounted ticket rates for young people and schools,” she said. “What we find is a lot of organizations are using that money to extend the influence of their organizations and that involves young people.”

The commission also gets some funding from the National Endowment for the Arts, and some funding from the fees paid to the state Corporation Commission, but the cuts would be dramatic, she said.

“We are not arguing about the need to increase teacher pay at all,” Foley said, adding that she believes the money is available from the Rainy Day Fund as it has been in the past.

The governor proposes complex changes that would affect hospitals, though it’s unclear even to them what the effects would be.

Budget documents show that Ducey plans on freeing up $35 million for teacher raises by increasing the state hospital assessment, a fee hospitals pay for discharged patients.

Currently, the assessment helps pay for acute care coverage for childless adults and the people covered by the Medicaid expansion that went into effect several years ago.

Ducey wants to increase the hospital assessment by 12 percent so that it also pays for behavioral health services for childless adults. That would free up $35 million to be used for education funding.

While the shift could negatively affect hospitals, Ducey’s proposal also calls for an increase in the amount of money the state pays for AHCCCS, according to the documents.

The increase would cost the state only $4 million, according to budget documents.

A large part of the savings that free up cash for teachers in Ducey’s plan are based on fewer AHCCCS patients, but the plan includes paying more to care providers.

Hospitals are trying to sort that out. “The members of the Health System Alliance of Arizona, which include the largest health-care systems in the state, support efforts to ensure that our teachers are paid appropriately,” said Jennifer Carusetta, executive director of the group.

“We believe that a healthy Arizona begins with the recognition that education and health care are fundamental to a thriving economy and must be equally prioritized. We are currently seeking additional details as to how Gov. Ducey’s proposed plan will impact the state’s economy from a health care perspective.”

Some state lawmakers also could present a hurdle for approval of Ducey’s proposal.

Sen. Sonny Borrelli, R-Lake Havasu City, who attended the business leaders’ news conference Wednesday as a spectator, said he and other lawmakers were generally supportive of the idea of giving teachers raises, though stopped short of a full endorsement of Ducey’s plan

“We’re still negotiating,” he said. “There’s a lot of devils in the details.”

Republic reporters Richard Ruelas and Ken Alltucker contributed to this article.