January 10, 2018

Howdy, Friends O’Farley…

One thing I really don’t like is dishonesty in politics. That’s why I’ve been writing the Farley Report for the last 12 years — to get you the truth about what happens up here in policy and politics so you can engage in the legislative process and make good decisions at the ballot box.

Fighting the dishonesty that has come from Governor Ducey about a wide range of issues is one of the main reasons I am running for governor. The dishonesty that has emerged in the past few days from Gov. Ducey on education lengthens an already long string of intentionally misleading statements during his term of office.

This Farley Report is the first of the weekly editions that I write during session. I’ll be trying to keep them a bit shorter, but there will be times that I’ll have to get you a whole lot of information. Like now. This week, I’m going to talk about the state budget in some detail in order to expose the truth behind Gov. Ducey’s claims yesterday that he is restoring cuts to K-12 education.


But first, the Pledge Break…

—> I am doing everything I can to be your next governor. This election offers the best opportunity in years to create real change in Arizona. Imagine our state as a light unto the nation, not a joke on late-night television. A place where public education is fully funded and everyone has quality, affordable healthcare and the opportunity to work at a livable wage. This future is within our reach, but I need your help in two ways:

1) Please contribute what you can. We are up against the Koch Brothers’ favorite son and we will need thousands of small donations to defeat Ducey’s few huge ones. December 31 is the deadline for our first reporting period, so your contributions NOW will be leveraged and multiplied in strength because the first fundraising number we show publicly in January will help national donors in their funding decisions for the rest of the campaign. With your help, we win. This is our time.

2) Please sign my nominating petition to help me qualify for the ballot in November 2018. Please tell your friends and ask them to sign my petition. The first step to bringing change to Arizona is to put me on the ballot! The only way we win this is together, and I am honored to have your support. You can find my petition here.


—> On Monday, my 12th legislative opening day under three governors, Governor Ducey gave another uninspired State of the State speech checking off numerous policy boxes without offering new policy proposals, and sending out several dog whistles to the most conservative parts of his base. In a singularly tone-deaf move, on the seventh anniversary of the Tucson January 8 shootings (and on the day the memorial broke ground), he shared with us that he believes in a “God-given right to keep and bear arms”.

Despite our current teacher retention crisis wherein 52.8% of teaching positions are currently either vacant or held by people without adequate credentials, he only got around to talking about education more than halfway through the speech.

In a surreal move, he introduced as a guest the retiring superintendent of Mesa Public Schools Mike Cowan, the same man who criticized Gov. Ducey’s cuts to education in 2015 and was rewarded at the time with Koch-funded robocalls attacking him throughout his district.

Gov. Ducey then claimed everything about public education and its funding was going just great! He claimed he dedicated $1.7 billion in new state dollars to education over the last three years. While it’s hard to tell exactly how he fabricated this false claim, it seems to be primarily made up of revenues from Prop 123, which only paid 70% of what voters already required the state to pay, with a funding source that was already dedicated to education. Not new money. He also included inflation and student enrollment growth in this figure — again, that is money required by voters to be paid. Not new money. 

And he claimed that teachers have received 9% raises during his term of office. Not true. Remember last year when he proposed to pay teachers what they were worth — a 0.4% teacher raise? $15 a month? Our average teacher salary is still 50th in the country, and it would take a 7% raise to get to 49th. That’s why our teachers are leaving in droves, and other states are using Arizona as a farm team, offering huge bonuses for our best and brightest to leave the state.

He then said his budget, to be released Friday, “will include a full commitment to accelerate the state’s K-12 investment, and restore long-standing cuts from the recession.” Wonder if that’s true? Read on…

—> Yesterday morning, he released his education spending plan without his funding plan, which will follow on Friday. From my knowledge of the budget process, I can make some educated guesses about how he plans to make it appear to be paid for. I’ll let you know the accuracy of my guesses next week once the budget is released.

The budget is a complex document, since it describes all state spending and revenues for the upcoming fiscal year, along with a whole lot of policies mixed in. But at its most basic it describes two things — where the money comes from, and where it goes. 

Since the budget is a prospective document it must predict some unknowables — how much will people and businesses pay in taxes or fees of various types, how much certain services like healthcare, child safety, and more will cost, how many students will show up at schools in August to be educated, etc.

We have some pretty good guesses of what those unknowables will be, thanks to a group of economists advising the state (Finance Advisory Committee or FAC), and others who work for the legislature in the Joint Legislative Budget Committee (JLBC) and who work for the Governor in the Office of Strategic Planning and Budget (OSPB).

The thing about having budget unknowables in a political realm is that less scrupulous elected officials who are interested in seeming to spend money without coming up with actual revenues to pay for it can be tempted to push their economists to fudge their projections in a desired direction.

An example that I have witnessed repeatedly: If someone wants to make more cuts to social services or education, they can project fewer revenues for the upcoming years, and use that as an excuse to make cuts. Then when the next year there are many more revenues than projected, they can push for corporate tax giveaways instead of restoring the cuts to schools.

To be clear, I have not seen this happen at JLBC, the truly nonpartisan group of economists who crunch numbers for the legislature. Their leadership has been stable and focused on the truth, as best as they can determine it. I am grateful for their integrity. This is important, because we need the best possible projections to develop the best possible budgets. Spend what we really expect to have, and we have better outcomes.

OSPB, on the other hand, works at the pleasure of the Governor, and their leadership changes based on politics. I have seen some pretty suspect numbers come out of that office over the years, numbers that happen to back up the desired policy direction of the sitting governor.

If a governor wants more revenues to spend on something to check a political box — say, education in a re-election year when polling is clear that voters want more money invested in education — that governor can create revenue from nothing by projecting more tax revenues will come in to the state, or fewer kids will show up at schools to be educated, or fewer people will sign up for the state Medicaid plan, AHCCCS. Without any basis for expecting these things to actually happen. 

Next year, when those revenues don’t show up, and this sitting governor is already reelected on the basis of those new investments in education, more cuts will have to be made.

Keep all this in mind when you hear what the governor announced in his education spending plan yesterday morning:

> Gov. Ducey said he will fully restore Additional Assistance to all public schools. This is a funding formula that pays for things like computers and textbooks, and has only been funded at around 10% of what it should be since 2009. It needs to be restored. He says he will phase it back in fully by Fiscal Year 2023, starting with $100 million in Fiscal Year 2019. This would be excellent news, if it were actually true and paid for by real revenues.

Here’s the thing: He also said that this money should be used to pay for teacher salaries. It can’t. Additional Assistance is restricted to “soft capital” — computers, desks, software, textbooks. Not teacher salaries. We need both, not one or the other. And he has NO proposal for additional teacher raises, except to make this year’s existing 2% raise permanent instead of a stipend. Again — it would take 7% to get us to 49th in the country in teacher salaries.

> He also does nothing to restore the recession-era cuts to the building renewal formula. Or what used to be the formula until it was converted into an irregular grant program that funds only 10% of what the annual formula used to fund.

This is the money used to fix our crumbling schools — collapsing and leaking roofs, HVAC systems held together with duct tape, or classrooms locked away because they are hazardous to inhabit. The lack of these funds hurt our local economies because fixing our schools also gets good jobs to local tradespeople. Not fixing our schools makes schools dangerous while removing money from our communities. This defunding is now subject to a lawsuit from school boards.

> He proposes to “fully fund”  JTED high school career and technical education programs with another $2 million, although he does not reveal his history of slashing JTED funds. His first budget out of the gate in 2015 sent this amazingly successful program into a death spiral by chopping $30 million, then after I and others helped to marshal support from the business community and Republicans to restore the cuts, a 90-0 legislative vote forced him to backtrack, although he demanded it be $28 million, not $30 million. Now he wants to put that $2 million back in.

It is also dishonest to call this “full funding” since it is only funding for a three-year program. I am running a bill this year once again to restore the fourth year that was chopped in 2009. THAT would be full funding, and would enable us to restore programs like the four-year auto mechanics curriculum from Ford that they dropped when we cut the program by a year.

> He boasts of millions to be spent on new school buses, which is a pre-existing program that is being paid for by the settlement from the Volkswagen diesel lawsuit. Democrats and Republicans alike were key in making that happen already.

> He includes as “new money” $116 million in increased student enrollment and inflation, which is required by voters to be spent each year and is NOT new money.

Some of this — most notably the Additional Assistance restoration — does indeed require new funds. Especially in a year where we are facing an approximate $80 million deficit due in large part to Governor Ducey’s firing of most of the state’s corporate tax auditors. But he does not propose new sources of actual sustainable revenue.

He talks about finding new money under the state’s couch cushions by squeezing more money out of “streamlining” regulations (read “protections”) and eliminating services. But I am guessing that there will be some funny numbers coming out of OSPB to justify neglecting new revenues. I’ll let you know what I find next week.

The problem with funny numbers is that this governor is not actually solving the problem with an actual sustainable source of revenue. He just appears to, until next year when the money is mysteriously gone. After the election.


—> Meanwhile, I am continuing to spread hope for change across our state!

I was honored in late December to receive the endorsement of former Congressman Harry Mitchell, and this month I’ll be speaking to groups in Maricopa, Phoenix, Fountain Hills, Oracle, Surprise, Tucson, Tubac, Casa Grande, and Scottsdale, among others.

Please join our campaign so we can finally get the leadership we deserve right here in the state we love.

Thanks for your continuing faith in me as your Senator.


Steve Farley

Senator, District 9, Tucson

If you like my representation and want to keep me in office, CONTRIBUTE TODAY!

Paid for by Farley for Governor

January 10, 2018