Ducey Cuts Budget Deal as Education Backers Push Tax Hike

PHOENIX — Arizona Gov. Doug Ducey on Friday announced he had reached a deal with majority Republican lawmakers on a state budget that does not address demands of striking teachers. Meanwhile, education advocates filed a ballot initiative to increase income taxes on high-wage earners to fund public education.

The budget deal comes as the Republican governor who is running for re-election ignored tens of thousands of teachers who demonstrated at the Capitol on Thursday and Friday. Ducey spokesman Daniel Scarpinato said the budget deal includes the first installment of a raise that would boost teacher pay by 20 percent by 2020.

It also adds $100 million proposed in January as the first installment in restoring recession-era cuts. School districts could use that cash for support staff pay increases, new textbooks or anything else they need.

"The plan is to address this issue in a sustainable way that rewards our teachers for the work they have done and provides them a pay raise that they have earned," Scarpinato said. "As well as additional dollars that districts have said they intend to use for support staff raises, textbooks, building repairs, fully funding inflation and not playing shell games with other pots of money."

Education advocates have been wary of the Republican governor's plan, saying it relies on rosy revenue projections. Instead, they're pushing for a new source of school funding.

The Invest in Education Act would raise the income tax rate by 3.46 percent on individual incomes more than $250,000 or household incomes higher than $500,000. The rate would increase 4.46 percent for individual incomes over $500,000 and household incomes over $1 million.

Sixty percent of the new funds would go toward teacher salaries. Forty percent would go to all-day kindergarten and pay raises for support staff.

The measure was filed by David Lujan, director of the Arizona Center for Economic Progress and Mesa teacher Joshua Buckley. Buckley said it's up to educators, parents and other community leaders to act if the legislature will not provide a new dedicated funding stream.

"If this movement has not stirred them to action, real, lasting action, then they will never get it," Buckley said.

The Arizona Chamber of Commerce was quick to criticize the plan. President and CEO Glenn Hammer said in a news release that there's "never a good time" to raise income taxes on small businesses and employees.

"The tax brackets that would be targeted under this initiative historically have the most volatile collections, with wild dips in economic downturns, which would put teacher pay at a terrible risk," he said.

House Speaker J.D. Mesnard said final details of $10 billion-plus budget would be worked out over the weekend. He also said it relies less on new revenue than the plan Ducey announced two weeks ago, ensuring it is more sustainable.

Mesnard said teachers who have been demanding a full restoration of more than $1 billion in yearly cuts since the Great Recession should be pleasantly surprised.

"It should put us, by the time we're done, pretty close to where we were on an adjusted for inflation basis to where we were in 2008 on per pupil funding," he said.