January 16, 2024

What’s in the Governor’s Proposed FY25 Budget?

On Friday, January 12, 2024, Governor Hobbs released her proposed FY25 Budget. In this proposal, there are several items that align with our belief that to move Arizona forward, we must move education forward.

Education Forward Arizona’s mission is to advocate for and act on education improvements that advance the quality of life for all Arizonans; this is accomplished by a strong education pipeline from Quality Early Learning to Post High School Enrollment and by reaching our north star goal of the state’s Achieve60AZ Attainment Goal.

It is significant to recognize the budget process in Arizona. Each year, the governor must present a budget within the first week of the new legislative session. The governor’s budget is then debated in the legislature and is further refined to meet the demands of both political parties in the House of Representatives and Senate. What the governor presents is more of a “proposed list” of investments and cuts deemed critical to the Administration.

Governor Hobbs’ proposed investments recognize that a stronger Arizona economy is tied to a strong education pipeline that begins with affordable childcare and extends to higher education and training to support an evolving workforce environment. These proposals align with our belief that Arizona has everything to gain when we invest in education.

Proposed Investments in Affordable Quality Childcare

We are heartened to know that the proposed budget includes investments in affordable quality childcare with both a one-time investment from the General Fund and ongoing investment from federal funds. These resources will provide support for the Department of Economic Security’s Childcare Assistance Program, allowing an average of more than 31,000 children to be served each month. The investment in affordable quality childcare will strengthen the economy by ensuring that parents have affordable, reliable, and quality childcare rather than having to make the decision to leave the workforce.

Proposed Investments in K-12 Education

Education Forward Arizona recognizes the value and importance of a strong K-12 education system as the pipeline to the Achieve60AZ attainment goal.

The proposed FY25 budget includes an increase of K-12 funding for an inflation adjustment of 2%, resulting in an increase of $296 million; the inflation adjustment is a legal requirement.

The proposed budget also includes recommended cuts or reductions to close the projected shortfall over the next two years. It is widely reported that the continued increased growth of Empowerment Scholarship Accounts (ESAs) for students that have not previously attended public school will have a dramatic and unanticipated impact in the General Fund as a net new cost. Governor Hobbs is proposing new rules to reduce that impact. The proposed changes include a requirement that students must have attended a public school for 100 days at any point in their K-12 education. In addition, the proposal includes repealing the prior year eligibility for recipients of the Universal ESA. This proposed rule is a result of the estimated 50,000 students who are reported to have never attended public school and are using the ESA to pay for private school tuition. The majority’s legislative leaders in the House and Senate have already indicated that they are not likely to support any changes in the ESA structure this year.

Proposed Investments in Higher Education

Equitable access to education and training after high school is a key priority for Education Forward Arizona; this is our North Star and is the impetus to gaining momentum toward the Achieve60AZ Goal.

Governor Hobbs is proposing a significant investment of $202.3 million to support equitable access to higher education to ensure that Arizona colleges and universities are prepared to meet the demands of an evolving workforce. The proposed budget includes continued funding of the Arizona Promise Program to provide tuition scholarships to economically disadvantaged high school graduates with a GPA of 2.5 and higher. In recognizing the need to have qualified and certified teachers in the classroom, the proposed budget includes a continued investment in the Arizona Teacher’s Academy.

Additionally, the proposed budget identifies areas of investments to recognize the importance of our rural communities, community colleges and state universities in providing equitable access to higher education. A significant investment is being proposed that would allow the three state universities to strengthen and expand Arizona’s healthcare workforce to meet the growing demands of a strong economy.

FY 2025 Proposed Budget Highlights

  • $100M for Childcare Affordability (one-time funding)
  • $296M inflation adjustment for K-12
  • $91M for Childcare Affordability (ongoing federal funding)
  • $40M to expand the Arizona Promise Program
    • $20M ongoing & $20M one-time funding
  • $30M for Arizona Teacher’s Academy
    • $15M ongoing & $15M one-time funding
  • $14.4M for State Operating Aid for community colleges
  • $14M for rural community colleges
  • $14.3M for STEM & Workforce Aid for community colleges
  • $46.6M Equalization Aid for community colleges
  • $46M for Arizona Healthy Tomorrow – university initiative
    • ASU $21.2M; NAU $10.1M; UA $14.7M

Education Forward Arizona looks forward to working with Governor Hobbs’ team and legislative leaders in pursuit of these proposed budget investments. Additionally, we will continue to advocate for the following:

  • A permanent solution to the Aggregate Expenditure Limit (AEL). This will allow school districts to spend the resources they currently have without restrictions based on a historical formula. For additional information, please read our AEL Education Explainer.
  • Continued support of Dual Enrollment for high school students. We know that students who complete a minimum of two college-credit courses through Dual Enrollment have a high probability of earning a college degree. For additional information, please read our Dual Enrollment Education Explainer.
  • Transparency and accountability related to Empowerment Scholarship Accounts.
  • A revised version of Proposition 123 to further support K-12 education.

Read more about the proposed budget here.

Watch the budget presentation here.