May 26, 2021

What’s included for education in the proposed Arizona budget

On May 24, 2021, the Arizona Legislature introduced a $12.8 billion proposed budget for Fiscal Year 2022. The introduced version of the budget is similar to a draft shared last week, with a few exceptions, including more funding for the universities and for a fourth year of Career and Technical Education. The legislature began hearing the budget bills on May 25 and was hoping to reach agreement to pass the budget in the same week. However, there hasn’t been broad agreement yet, which has slowed down the process to pass the budget. When it was clear that they were not close on an agreement, the House and Senate decided to adjourn until June 10. However, they could reconvene before that date if the Speaker of the House and President of the Senate agree.

One of the main sources of disagreement stems from the inclusion of a significant tax cut package that would introduce a flat tax and reduce income taxes. As a part of this, the tax rate that generates revenue from Prop 208, which was passed by voters in November 2020 to raise teacher and school staff pay, would be capped at 4.5% for high income earners and backfilled by the general fund. These tax cuts would have significant implications to state revenue in the future, which would impact the entirety of the state budget, including education.

So how does the budget fare when it comes to education?

There are a number of investments that align with our priorities, with some that meet the desired amount and others that fall short. The draft budget includes:

  • $6.9 million for third grade literacy that may be funded by federal COVID-19 relief funding for FY22 and FY23, then by the state in FY24. (This amount meets the full request.)
  • $5 million for fourth year CTED funding (approximately $8 to 10 million needed)
  • $14 million for rural community colleges ($21.2 million was requested)
  • $7.5 million for university promise scholarships ($50 million was requested)
  • $1.3 million to cover the fees for Advanced Placement and other similar exams (missing in the budget is $1.5 million to expand access to AP courses)
  • Missing entirely from the budget is the funding for the Preschool Development Grant ($7.5 million in FY22)

There are other education investments that are worth noting, including:

  • $67.6 million in ongoing funds and $33.9 million in one-time funds for the universities (which is short of the $165 million requested as a part of the New Economy Initiative)
  • $5 million to Maricopa and Pima Community Colleges
  • $50 million for special education, plus $5 million one-time to the Extraordinary Special Education Needs Fund
  • $1 million for gifted education
  • $7.5 million for community colleges for back-to-work scholarships
  • Pays down $30 million of the rollover to K-12 ($930 million is still owed)

Want to Learn More?