It has been a couple of weeks since Governor Ducey signed the FY 2018 budget into law, a $9.8 billion dollar plan that was the result of four months of tense negotiations with the legislature. And though there were a few crony capitalist giveaways to special interests included in the final package, overall the budget should be considered a win for fiscal conservatives.
Structurally Balanced Budget
Among the lesser talked about accomplishments is that the legislature passed what can be considered a structurally balanced budget for the third year in a row. If it seems like a low bar to give politicians credit for spending money they don’t have, consider that for a decade our elected leaders failed to pass a single budget without using accounting gimmicks and fake assumptions to paper over an ongoing deficit. Arizona finally has its fiscal house in order, which is good news for taxpayers.
When the preliminary budget was announced, many lawmakers were frustrated that regular taxpayers were left out of the plan. In particular, not a single tax cut was included for hardworking families. That was changed when Representative Tony Rivero (District 21) and Representative Michelle Ugenti-Rita (District 23) led the charge to secure a $12 million tax cut by increasing the personal exemption by $100 through 2019. It was tax relief that was broad based and will benefit low income families the most.
Throughout the session, efforts were made by freshman lawmaker Kevin Payne to pass legislation that would require local government to hold all elections proposing a sales tax increase to occur in November of even numbered years. After passing the House, the bill failed in Senate Judiciary. However, conservative lawmakers seized an opportunity to include this major reform in the budget package. This was a tremendous win for taxpayers as consolidating TPT elections will save money, yield greater voter turnout and prevent cities and counties from trying to sneak tax hikes through in low turnout elections.
During the entire budget process, the Club encouraged lawmakers that if additional funds were to be spent on education, to direct it toward results-based funding and increased intellectual diversity at our universities. Conservative lawmakers were successful in both efforts.
In the budget $38 million was allocated to “Achievement Districts,” whereby schools that meet certain academic targets receive additional funds. The purpose of this program is to expand and replicate schools with proven effective outcomes, to increase every student’s access to a high-quality education. The program also directs funds to partnerships between under-performing schools and excellent “A”-rated schools for mentorship.
Conservative lawmakers also successfully ensured funds designated for “Freedom Centers” located within the public universities were retained. Not only did they secure the $5 million from last year’s budget, but were able to negotiate an additional $2 million this year. These centers have proven to be bastions of intellectual diversity and provide students with much needed education on classical political philosophy and free market economics.
Overall, 2018 State budget reflected the education priorities of the Legislature and Governor, but did so with fiscal restraint. Most importantly, the budget was structurally balanced and spending did not exceed inflation plus population growth. Factoring in a solid tax cut for every Arizonan and consolidated elections, conservatives secured some major wins for tax payers this year.