State of Arizona Executive Budget SUMMARY - azospb.gov

1 State of Arizona Executive Budget SUMMARY . FISCAL YEAR 2022. Douglas A. Ducey GOVERNOR. JANUARY 2021. Table of Contents Budget Message Budget SUMMARY .. 3. Addendum: Executive Budget Revisions .. 8. Budget in a Flash .. 12. General Fund Sources and Uses .. 15. The Economy .. 16. General Fund Revenue SUMMARY .. 23. Other Fund Revenue SUMMARY .. 24. Fiscal Response to the COVIC-19 Pandemic .. 25. Education .. 28. Health and Welfare .. 36. Public Safety .. 42. Natural Resources .. 46. Government That Works .. 50. Budget SUMMARY FY 2020 Executive Budget All Funds .. 54. General Fund Operating Budgets SUMMARY .. 57. Other Appropriated Funds Operating Budgets SUMMARY .. 59. Other 69. Acknowledgement .. 70. The Budget SUMMARY The FY 2022 Executive Budget moves the State forward with immediate attention to addressing the health and educational effects of the COVID-19 pandemic, while looking beyond to a recovery that displays the compassion, innovation, and resilience of Arizonans.

2 The Executive 's carefully calibrated financial priorities during Despite the pain and hardships we've experienced this year, the pandemic have reflected the appropriate role of government: we've seen hope triumph over darkness.. Protect the lives and livelihoods of Arizonans from the Gov. Doug Ducey ravages of COVID-19. A. Fulfill, ahead of schedule, the promise to restore the last rizonans are resilient. The year 2020 began with the Arizona Great Recession-era cut to the K-12 funding formula. Way'' on full display: leading the nation in poverty reduction, To address the serious learning loss from COVID-19 and to with over 175,000 Arizonans pulling themselves out of poverty;. help make up lost ground ahead of the 2021-2022 school ranking second in job growth, with more jobs than people to fill year, provide significant resources for high-impact, results- them; ranking fourth for average weekly wage growth; and rank- oriented intervention and acceleration programming.

3 Ing sixth in export growth. Then came the COVID-19 pandemic, triggering unprece- Raise the level of public safety by fully funding State dented loss and economic hardship. Trooper overtime and recruiting more individuals to join That shock was followed by a steady rebound. As the year the State 's police force. progressed through an unfamiliar environment, Arizona citizens, Improve prison environments and equipment that promote companies, not-for-profits, and State and local governments staff and inmate safety and offer more opportunities for responded with a focus on creating and seizing opportunity. inmate rehabilitation. Through it all, Arizona continued to be a destination for busi- Provide more resources and pursue more aggressive forest ness and families, and the State 's population growth rate management strategies in order to fight wildfires and propelled Arizona into third place nationally. reduce future fire risk. THE ROLE OF State GOVERNMENT Keep Arizona known as a beacon of low taxes and reason- able regulation to attract businesses and families fleeing From the standpoint of State fiscal management, the concept oppressive, big-government states.

4 Is simple: Keep taxes straightforward and low. FY 2021 Budget Forecast Eliminate government red tape and unnecessary regula- tions. The enacted FY 2021 Budget funded mainly baseline formula programs and actually resulted in a year-over-year spending Adhere to a fiscal discipline that keeps the cost of State decline compared to the FY 2020 Budget . government in a sustainable condition. The State 's impressive revenue performance, along with Far ahead of most predictions, Arizona has emerged from the restrained spending, has resulted in the State maintaining struc- pandemic stronger than ever. By following common-sense public tural Budget balance despite the most severe economic down- health guidance to keep people safe and employed, the State turn in American history. remains well positioned as a top national performer. The Executive forecasts a current fiscal year structural surplus Since the low point of the pandemic-induced national reces- of $881 million and an ending cash balance of $1,174 million.

5 Sion in the second quarter of 2020, Arizona has achieved the third-strongest economic performance of any State , and the FY 2022 Executive Budget nation's largest quarterly gain in homeownership. A pace-setting recovery requires a State government that The FY 2022 Executive Budget remains focused on areas of simultaneously (a) recognizes its responsibility to help improve real need that, if properly addressed, will have a lasting, positive the lives of its citizens and (b) subdues its impulses to act in ways impact for Arizona in the areas of education, public safety, natural that usurp the essential role of the private sector. resources, and infrastructure. Including the baseline changes and Executive initiatives, the completes the final step of a $1 billion promise to K-12. Executive forecasts a structural surplus of $141 million, resulting education, ahead of schedule, by fully restoring additional in an ending cash balance of $855 million. assistance formula funding in FY 2022.

6 Average total spending growth over the last five years markets an Open Enrollment Month to inform parents remains at , compared to in the five years leading up about open-enrollment options;. to the Great Recession. awards grants to K-12 schools to scale innovative models Under the Executive 's FY 2022 spending plan, average spend- of schooling and instruction;. ing growth over the next three years is , which is below the levels of the mid-2000s and just slightly above the 10-year supports professional development for educators and average of , schools to provide personal learning opportunities for students an educational approach designed to ensure mastery of academic content and social and emotional Education skills, and to foster student ownership in their own learning;. The past 10 months have challenged Arizona 's schools in establishes new Arizona civics programs to engage unprecedented ways, and those challenges will not end when the students in community service and help schools create massive vaccine administration is complete.

7 Unique and engaging ideas;. Arizona children have missed out on so much, and the State provides a multi-pronged approach to early literacy strate- must leverage its deep bench of creative and determined educa- gies, including teacher training, student evaluation, literacy tional champions to address the severe learning loss caused by coaches, and dyslexia specialists;. COVID-19. In FY 2021 alone, more than $ billion in federal funding has invests in schools and students in need by (a) expanding flowed into schools, bringing inflation-adjusted per-pupil fund- the pipeline of teachers in low-income schools; (b) knock- ing from all sources to an all-time high of $11,221 per student. ing down barriers to graduation, college, or the workforce With the investments proposed in the FY 2022 Executive by supporting at-risk youth; and (c) eliminating financial Budget , the State is on track to have invested $ billion in K-12 hurdles for low-income students to take examinations that education since 2015.

8 Qualify for college credit; and The FY 2022 Executive Budget allocates 30% of new General fully funds schools' anticipated building renewal and school Fund spending, or $274 million, for K-12 and higher education. construction needs. The Executive Budget : HIGHER EDUCATION. makes a significant investment in remediation program- For Arizona 's three public universities the University of ming for students disproportionately impacted by COVID- Arizona , Arizona State University, and Northern Arizona Univer- 19 learning loss;. sity the Executive Budget enhances their capacity for graduat- expands early literacy education;. ing more students in critical areas, to help Arizona compete in takes the next step in the Arizona school choice movement; the New Economy. and The Executive Budget also expands adult learners' access to strengthens the civic muscles of Arizona 's future. quality educational opportunities that support job training, employment, and aspiration for higher education.

9 K-12 EDUCATION. In dealing with the COVID-19 pandemic, many states moved Public Safety to solve projected Budget shortfalls by cutting education spending. The Executive Budget makes strategic investments in law In Arizona , the Executive and Legislature actually increased enforcement to modernize communications and physical plant funding for signature education investments in FY 2021. infrastructure; address critical staffing shortages; and expand The FY 2022 Executive Budget : services to lower the recidivism rate among individuals leaving the State prisons. includes a significant supplemental investment to conduct high-impact, results-oriented intervention and acceleration LAW ENFORCEMENT. programming to benefit Arizona students impacted most Public Safety Assets. The Executive Budget includes funding by the challenges of 2020-2021; for the right tools to strengthen the Department of Public Safety's expands transportation options for families to get their chil- (DPS) capacity for carrying out its mission: dren to and from the school they choose; Upgrades the State 's public safety radio system, which allows for critical radio communications for over 12,000.

10 Users, including 12 State agencies and several local, federal, abuse treatment capacity available to inmates by contracting with and tribal agencies. third-party organizations. Purchases body camera equipment to enhance trooper safety, improve agency efficiency, and promote public Health and Welfare transparency. The Executive Budget remains focused on keeping Arizonans State Trooper Force Enhancement. DPS faces operational safe from COVID-19 while addressing other key needs, including: challenges aggravated by an insufficient overtime Budget that access to child care;. forces troopers to go off duty before the end of their five-day safe placements for children in foster care;. work week. This system often results in Friday shifts being short- staffed, creating service gaps during rush hour. expanded long-term care oversight;. The Executive Budget seeks to resolve this issue by increasing more caseworkers to investigate abuse of the elderly and the overtime Budget , which will improve trooper coverage, vulnerable adults; and morale, and retention.