January 17, 2018

Howdy, Friends O’Farley…

The session rolls on into its second week and the action is ramping up. Governor Ducey released his budget last Friday and yesterday morning we were able to break it down, line by line, in a public hearing in Joint Appropriations Committee. Despite his glowing spin, it’s as bad as I predicted in last week’s Farley Report. Read on for the details.

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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. He just reported that his average campaign contribution in 2017 was $1,900 per donor, including $5,100 from Charles Koch himself. Only 5 donors contributed $25 or less. But his money from out-of-state billionaires won’t be as strong as your deep engagement — this will be unlike any other election in our lifetimes. Ducey can’t buy Arizona. 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.

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—> You may recall that I shared with you last week some of the ways in which the Governor’s budget office (OSPB) is able to conjure up the appearance of new revenues that actually don’t exist, in order to avoid having to come up with real revenues by rolling back some of the 331 corporate sales tax loopholes that riddle our tax code.

Thanks to analysis by the nonpartisan Joint Legislative Budget Committee (JLBC) economists revealed yesterday, we see how it happens in this year’s gubernatorial budget proposal.

While JLBC predicts a $20 million shortfall in FY18, Ducey’s OSPB predicts an $86.5 million surplus in FY18 — a huge $106.5 million difference in the Governor’s favor. OSPB also projects $90 million more than JLBC in ongoing revenues and $61 million less spent on state Medicaid (AHCCCS) caseloads and K12 student enrollment.

When these irrationally optimistic projections turn out not to be true in 2019, the election will be over and more cuts will come to education, social services, and transportation infrastructure. That’s why we need accurate projections, not politically expedient wishful thinking.

—> Other tricks in Governor’s budget include stealing $129.5 million from public funds intended for specific programs in public safety, roads, environmental protection, and much more.

One such fund is the Underground Storage Tank Revolving Fund, which contains money we all pay in the form of a one cent per gallon gas tax, meant to remediate old leaking tanks underneath old gas stations. Governor Ducey proposes stealing $20 million from that fund over the next two years for other purposes.

The thing is, the Arizona Constitution states that any gas taxes can only be spent on transportation. And in an era of declining revenues for roads, we cannot afford to divert any of those scarce funds for anything else. That hurts our quality of life and reduces the number of jobs created by road maintenance.

There are 50 funds being raided like this. The Vehicle Emissions Inspection Fund, which comes from the $12 we pay for emissions testing on our cars. The Fingerprint Clearance Card Fund that comes from the fees paid by people to get fingerprint cards for their work. The Residential Contractors Recovery Fund loses $4 million — money that goes to reimburse consumers who have been ripped off by an unscrupulous contractor.

These are fees charged for very specific and important things. When this money collected from the public — business and individuals alike — is diverted to the General Fund for other uses, it is no longer a fee. It becomes a tax.

By diverting $129.5 million from these 50 funds, Governor Ducey is in effect proposing to raise new taxes on all Arizonans as part of this budget.

—> Last year Governor Ducey announced publicly that the HURF shift would permanently end. Republicans and Democrats alike were very happy at this development that many of us had been pushing for many years. The HURF shift diverts millions of dollars in our gas taxes out of transportation purposes and into the general fund.

This shift has been used a a funding source for the Department of Public Safety (DPS). That been found to be a legal use, but is in direct contravention to the spirit of the Arizona Constitution which makes clear that gas taxes can only be spent on transportation.

Thanks to a bipartisan show of strength from a coalition of urban and rural legislators, we have been able to end the portion of the HURF shift that diverted $60 million annually from cities and counties for their transportation projects. But the raid on the portion that maintains and constructs state highways — which also travel through cities and counties — has remained.

JLBC shared today in committee that the Governor’s budget continues that raid and actually increases the amount of money stolen from the State Highway Fund. The HURF shift from the State Highway Fund as proposed by Governor Ducey will be $95.2 million in FY19.

—> In the budget for each department, there are single line items that detail spending on certain specific programs that are important to a number of areas, especially social service programs.

In Governor Ducey’s proposed budget, there are an alarmingly large number of single line item programs that are now being consolidated into large aggregate lines. Why is this alarming? Because vital single line items can easily be hidden in these aggregate numbers and then be eliminated without the public knowing this is going on.

One example: the Department of Economic Security (DES) used to have separate line items for Coordinated Homeless Services, Domestic Violence Protection, and Coordinated Hunger Services. Crucial programs all, to assure that the most vulnerable among us have a chance at a decent life.

Governor Ducey’s budget groups these into one aggregate line item: “Adult Services.”

The public will no longer have any way of knowing if, say, Domestic Violence Prevention programs are being cut or eliminated, if they are hidden in a line item called “Adult Services” that includes other programs that might grow to take up the space.

The budget is hard enough to understand due to its complexity. To get rid of clear information in the form of separate line items will simply reduce input from the public and allow secrecy in government, something we need less of, not more.

—> Allow me to add a bit to my efforts last week to parse Governor Ducey’s new claims of $400 million in “new” spending on K-12. I thought I would share with you my notes on an OSPB slide on that topic that I used in committee to show how little is actually new spending.

From top to bottom:

> $2 million to “fully fund JTEDs” does not restore the freshman year of JTED, so it does not fully fund JTED at all. That $2 million simply gets the 3-year JTED program back to where it was before Ducey cut it by $30 million in 2015.

> $14.1 million in “other targeted investments” should not include $4 million for early literacy and $5.3 million in IT expenses that were already in the baseline, and not new money. That leaves $4.8 million in new money.

> $34 million in 1% teacher raises is already in the baseline. There is not a single dollar in new money for teacher raises in the proposed budget. Currently more than half of all public school positions are either vacant or help by someone without proper credentials. It would take a 7% raise to get us up to 49th in the country and start to encourage teachers to return and stay.

> $35.2 million in “Building Renewal Grants” is only $18 million in new money, and in any case is only around 10% of what should be funded each year to keep our schools repaired. This is currently the topic of a lawsuit.

> $88 million in “New School Construction” is already in the baseline and is not new money.

> $100 million in “Additional Assistance” funds is new money, but is less than the $113.5 million cut by Governor Ducey in 2015 and not yet restored.

> $116 million in “Student Growth and Inflation” has been required by voters (twice, in Prop 301 and Prop 123) to be spent and is not new money — it just keep pace with increasing costs and enrollment growth.

Add it all up, and that PR-stoked “$400 million in new money” turns out to be only $124.8 million, less than the $143.5 million in Additional Assistance and JTED funds cut by Governor Ducey in his first budget. With no money to solve the current teacher crisis. This isn’t new money for education; it’s more smoke and mirrors.

—> But there is hope for positive change, and I am continuing to share that hope with Arizonans everywhere.

Last week I spoke to a very enthusiastic group of around 150 activists in Fountain Hills, had a great evening with great friends in Yuma at the annual Diamonds and Denim fundraiser for the Yuma County Democrats, enjoyed a wonderful event with around 60 people in Oracle at Jim and Judy Walsh’s beautiful home, and walked with more than a thousand Tucsonans at the MLK Day March and Rally.

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

Steve Farley

Senator, District 9, Tucson

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

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January 17, 2018