|
Over the weekend, Arizona lawmakers passed a $16.1B bipartisan budget before adjourning for the session. The spending plan, which now awaits final approval from Gov. Katie Hobbs, is the result of months-long negotiations between the Governor’s Office and the Legislature. Making it a particularly contentious year is the fact that Arizona is currently facing a $1.3B budget deficit, requiring tough decisions about spending cuts. The deal includes roughly $600M in cuts and sweeps in comparison to funding in the current fiscal year, which ends on June 30.
Here are the key highlights:
- $15M appropriation to the Housing Trust Fund
- Includes non-lapsing language that protects the allocated $40M in the Homeless Shelter & Services Fund within the Arizona Department of Housing
- Appropriates funding for the following automation and information technology projects: $3.4M for the Medicaid Enterprise System Mainframe; $6.8M for the Human Resources Information System (HRIS) Replacement; $19.5M for the Integrated Tax System Modernization Project
- $29M in one-time additional assistance to public schools
- $2.5M in cuts to the Arizona Department of Education for art supplies
- $2.5M in cuts to the Empowerment Scholarship Account (“ESA”) program by closing a loophole that allowed for double-dipping; the budget also calls for annual audits of a random sample of ESA accounts
- 3.5% cut to state agencies
- 3.5% cut to state universities: $10.9M in cuts to Arizona State University; $4M in cuts to Northern Arizona University; $6.5M in cuts to University of Arizona
- Caps corporate contributions for School Tuition Organizations (“STOs”) at $135M, which prevents the cap from increasing by 20% each year
- Boosts funding for the state prison system by using $115M of the $1.14B multi-year opioid settlement, something Democratic Attorney General Kris Mayes contends is illegal and intends to challenge in court
- Waives the Aggregate Expenditure Limit for K12, authorizing schools to spend monies already allocated in FY 25
- Starting in FY 26, eliminates the Continuing High School and Workforce Training Program, Adult Workforce Diploma Program, and the Community College Adult Education Workforce Development Program; for FY 25, makes a one-time $4M allocation to each of these programs
- Funds District Additional Assistance ($29M) and Opportunity Weight ($37M) through FY 25 and shifts these allocations from ongoing to one-time, with the intent that funding will resume in FY 28
- Funds $3.2M for school meals program
- Cuts $12M from Dual Enrollment programs (an improvement over the original $15M cut when the budget was announced)
- Includes an amendment allowing school districts receiving funds from litigation settlements to use those funds to remediate the problems that led to the litigation (e.g., vaping)
- $54M cut to community colleges
- Sweeps dollars from numerous state boards by increasing the amount remitted to the State General Fund from 10% to 15% of fees collected through licensing and certification (“90/10” agencies will now be “85/15” agencies)
- $15M cut to the State Aviation Fund; fund monies are used to leverage federal funding for airport infrastructure improvements
- $23.6M cut to the Rural Broadband Accelerated Match Fund housed under the Arizona Commerce Authority
- $333M sweep from the Water Infrastructure Finance Authority of Arizona (“WIFA”)
- $100M sweep from the Hospital Assessment Fund under the State’s Medicaid program (AHCCCS)
- Delays or claw-backs to numerous road construction projects throughout the state, including a $41M reduction in funding to the Arizona Department of Transportation for pavement rehabilitation
Now that session has officially adjourned, we know the effective date for legislation passed this session will be September 14, 2024, unless otherwise specified.
|
