Budget Presentation - azospb.gov 2019 Executive Budget Rollout... · investment… that bolsters...
Transcript of Budget Presentation - azospb.gov 2019 Executive Budget Rollout... · investment… that bolsters...
FY 2019 Executive BudgetBriefing
January 12, 2018
Governor’s Office of Strategic Planning and Budgeting
January 12, 2018 1
Overview
• General Fund Snapshot• The Economy and State Revenues• FY 2019 Budget Priorities
• Education• Opioid Crisis• Child Safety• Economic Security• Natural Resources• Public Safety• Responsible Government
• Highlights
January 12, 2018 2
General Fund Snapshot
$ in millions FY 2018 FY 2019
Total Revenues $9,871.4 $10,218.8
Enacted Base Spending 9,815.1 9,815.1
Baseline Changes 6.4 170.1
New Initiatives 7.2 158.5
Total Spending 9,828.7 10,143.7
Ending Balance 42.6 67.2
Structural Balance $5.6 $4.8
January 12, 2018 3
Growing Indications of a National Economic Surge
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“A wave of optimism has swept over American business leaders, and it is beginning to translate into the sort of investment… that bolsters economic growth, …the newfound confidence was initially inspired by the Trump administration’s regulatory pullback,”
New York Times, The Trump Effect: Anticipating Less Regulations, Loosens Purse Strings, January 1, 2018
“Some of the cash windfall from corporate tax cuts is already trickling down to Main Street workers. A handful of U.S. companies are already promising to pay one-time bonuses to their employees and bump up hourly pay…”
USA Today, AT&T, Comcast, Wells Fargo promise bonuses or pay hikes once tax cut bill passes, December 20, 2017
January 12, 2018 5
Arizona’s Labor Market
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January 12, 2018 6
Arizona Well Positioned to Take Advantage of Federal Policy• Arizona’s high tech service and manufacturing
sectors have led the nation in job growth since the Recession
• Net in-migration may be picking up after post-Recession stall; 5th fastest growing state in 2017, driven by people moving to Arizona
January 12, 2018 7
Manufacturing Job Growth, 2015-Present
United States Arizona Mountain West
1.5% 5.2% 4.0%
Actuals - Forecast 53.0M (51.0)M 1.2M 0.9M 6.9M 75.6M
FY 2018 General Fund Revenues Well Over Forecast
January 12, 2018 8
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July August September October November December
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Forecast Actuals YTD Total: $86.7M
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YTD Actuals Forecast
General Fund Ongoing Revenue Forecast
January 12, 2018 9
3.2% 3.8% 4.2% 4.2%
Revenue Enhancing Policies
Additionally, the FY 2019 budget includes multiple revenue-enhancing administrative changes, expected to increase General Fund revenues by at least $11.5M, including:
• Lottery vending machine and in-lane sale expansion
January 12, 2018 10
Expand Tax Fraud Prevention Services $30
Increase Audit and Collections Resources 25
Total Ongoing $55
$ in Millions
Recognizing Our Veterans
• Arizona’s 52,000 20-year veterans receive a pension for their service
• Recognizing the unique contributions of our retired military, the State has partially exempted $2,500 of this pension income from tax since 1989
• Executive Budget increases the Exemption to $10,000 over two years, beginning in tax year 2019
• $15.9M/year impact in FY 2021
January 12, 2018 11
FY 2018 Supplemental Funding
January 12, 2018 12
School Facilities Board Building Renewal Grants $10.0
Department of Forestry Fire Expenses 4.1
Land Department CAP Water Rights Fees 0.4
Secretary of State Election Administration 1.9
Total FY 2018 Supplemental 16.4
Efficiency Savings (2.8)
Net FY 2018 Increase $13.6
In order to close out the current fiscal year, the Executive Budget includes the following one-time supplemental funding: $ in Millions
Since FY 2015, $1.7 Billion Invested into K-12 Education
January 12, 2018 15
Prop 123 added about $306M in FY 2016
Strategic investments: $34M Teacher Salary Increase, $38M Results-Based Funding, $8M Early Literacy, $64M
New School Construction$102M of recession-era cuts are restored
in FY 2019
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State K-12 Funding – All Sources
Prioritizing Education
80% of new discretionary spending will go to education
$190M of $237M total new initiatives• $100M to increase additional assistance• $2M to fully fund large JTEDs• $34M to permanently increase teacher salaries• $35.2M for building renewal grants• $5.1M in debt service to leverage $88.1M to finance
new school construction• $14.1M for other targeted investments
January 12, 2018 16
Ending K-12 Recession-Era Formula Funding Cuts$100M in permanent and flexible funding for Additional Assistance with a path to fully restore the capital formula
January 12, 2018 17
Year Impact (in Millions)
FY 2019 $100
FY 2020 $168
FY 2021 $236
FY 2022 $303
FY 2023 $371
Fully Fund Large JTEDs
• $2M to fully restore the Basic State Aid formula for Joint Technical Education Districts (JTEDs)
• JTEDs with over 2,000 students will receive 100% of Basic State Aid to enhance courses and industry-certified programs
• The additional resources will enhance the courses and industry-certified programs offered at JTEDs that serve more than half of all Arizona JTED students
January 12, 2018 181Arizona School Boards Association and Arizona Association of School Business Officials 1/3/2018 webinar
Teacher Pay In The Base
• $34M for the second year of the permanent teacher salary increase
• The Executive Budget moves teacher salary package into the base level to ensure it will be adjusted for inflation each year going forward
January 12, 2018 19
90%
10%
School District Use of Prop 123 Dollars1
Increase Teacher Compensation Other1Arizona School Boards Association and Arizona Association of School Business Officials 1/3/2018 webinar
• School Districts have increased spending on teacher salaries by 9% since FY 20151
• Spending on teachers’ salaries is expected to be at least 12% higher in FY 2019 than in FY 2015 including this funding
K-12 School Construction and Repairs• $35.2M increase for building renewal at School
Facilities Board (SFB) to fund school districts’ capital needs
• Totaling $51.8M in FY 2019 for building renewal, the highest infusion of cash since 2007
• From FY 2013 to FY 2017, building renewal requests from school districts have more than doubled, from 313 to 866
January 12, 2018 20
New School Construction and Expansion• $88.1M for five new schools or school expansions
• Financed through 25-year COPs: $5.1M annual debt service
January 12, 2018 21
020406080100120140160180200
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SFB Outstanding Principal and Debt Service
SFB Outstanding Principal SFB Debt Service
Targeted Education Investments• $1.6M for the Schools for the Deaf and the Blind
to hire 21 new teachers for the “Birth to 3” program
• $2.5M for the Governor’s Partnership for K-12 Computer Science pilot program
• $4M for the second year of expanding early literacy programs
Higher Education• $8M for capital and operational needs to better
serve Arizona’s resident students
January 12, 2018 22
National Guard Tuition Assistance• $1M for tuition benefits to assist National Guard members
who are pursuing post-secondary degrees or certificatesStates with Education Benefits versus States with No Benefits
January 12, 2018 23
National Guard Readiness Center Construction• $24.1M investment in Tucson area
• Improve training and readiness for 172 soldiers
• Consolidate assets from temporary National Guard facilities
January 12, 2018 24
Opioid Crisis“This much I commit: All bad actors will be held accountable – whether they are doctors, manufacturers or just plain drug dealers”
Governor Doug Ducey, 2018 State of State Address
January 12, 2018 25
Opioid Deaths Up 74% since 2012
January 12, 2018 26
475
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Opioid Deaths in Arizona from 2007 to 2016
All Opioids Prescription Opioids Heroin
Opioid Action Plan
On September 2017 the Department of Health Services issued an opioid action plan to:
• Improve access to medication assisted treatment
• Increase access to Naloxone• Increase participation by law
enforcement in the U.S. Drug Enforcement Administration’s Tactical Diversion Squad
January 12, 2018 27
Opioid Enforcement
$758,100 to establish the Arizona Pharmaceutical Diversion and Drug Theft Task Force to combat abuse and trafficking of prescription drugs and inappropriate prescriber behavior
This will fund:• 2 FTE Detective positions• 1 FTE Sergeant position
January 12, 2018 28
Child SafetyContinuing critical investments that support more safe and loving homes for children
January 12, 2018 29
Backlog Elimination
January 12, 2018 30
33,245
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Inactive Cases and Total Open Reports Trends - 1/1/2018
Total Open Reports Inactive Case
From Foster Care to Forever Families• $15.8M to fully fund the
adoption subsidy for 33,087 children
• As the out of home population decreases, more children are adopted
• In the past year, more children were adopted than ever before
January 12, 2018 31
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Out of HomeOut of Home ProjectionAdoption ProjectionAdoption
Guardian: The New Child Welfare Information System• Mobile Solution has
been completely deployed
• $9.5M FY 2019 for Guardian Development:
• Complete platform development and hosting environment
• Continue business integration, document management, technical integration, and quality management
January 12, 2018 32
Statewide Application Usage by Location
December 2017
Fixing the DD Structural Shortfall$10.7M to backfill portions of the Division of Developmental Disabilities (DD) program which are not eligible for federal matchThis will ensure:• Children 0-3 receive free developmental
evaluation• Eligible DD clients have room and board• All DD clients receive case management
January 12, 2018 34
Serving Vulnerable Populations• Using newly-identified federal funds to fully fund
Adult Protective Services caseload growth
• $471,000 to allow seniors to safely remain in their own homes as they age
• $1M one-time funding to increase food banks’ capacity to provide more farm-fresh produce to low-income families, particularly in rural areas
January 12, 2018 35
Natural ResourcesThe Executive Budget improves and expands recreational opportunities at State Parks
January 12, 2018 36
Transforming Oracle State Park into a Destination$4M from the State Parks Revenue Fund to add 30 RV sites, 20 cabins, and 20 tent sites
January 12, 2018 37
Redeveloping Buckskin Mountain State Park• $1.5M from the State Parks Revenue Fund and $1M from
the State Lake Improvement Fund
• Redevelopment will include new cabins, electrical and water infrastructure upgrades, and new shower and restroom facilities
January 12, 2018 38
Public SafetyMaking strategic investments to heighten public safety and ensuring individuals who have paid their debt to society are given a real second chance
January 12, 2018 39
A Real Second Chance
• $1.7M to provide substance abuse treatment to an additional 1,560 inmates each year
• $1.4M to expand educational services to an additional 486 inmates each year
• $449,900 to expand Second Chance Centers at the Lewis and Perryville facilities, allowing an additional 975 inmates to participate in employment training each year
January 12, 2018 40
0.0%
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Recidivism Rate (3-year lag)
Recidivism Rate Recidivism Rate Forecast
Wrong-Way Driver Night Watch• Already in place: 145 state-
of-the-art infrared cameras to better detect instances of wrong-way driving
• This plan: Adds $1.4M to improve patrol coverage and response time for night watch
• At full implementation, the Night Watch will have an additional 19 State Troopers to assist in patrolling the Metropolitan Phoenix freeway system at night
January 12, 2018 41
Border Strike Force Enhancement• $2.9M to enhance Southern Arizona coverage
• This will fund• 11 FTE Trooper positions• 1 FTE Sergeant positions
• At full implementation, there will be an additional 24 State Troopers
January 12, 2018 42
Responsible GovernmentEnhancing and capitalizing on the value of public assets are hallmarks of an effective state government
January 12, 2018 43
Preventive Highway Maintenance$25.6M from the State Highway Fund to provide surface treatments for more than 3,000 additional lane-miles
January 12, 2018 44
15 41143
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Maintenance Spending and Highway Construction Costs
Annual Maintenance Spending Additional Construction Costs
Health Insurance Trust Fund
January 12, 2018 45
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2011 2012 2013 2014 2015 2016 2017 p. 2018 p. 2019
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Health Insurance Trust Fund Revenues to Expenditures
Revenues Expenditures Balance
Shifting Efficiency Savings from Agencies to Education
January 12, 2018 46
K-12 Education
$190
Universities$8
Other$39
FY 2019 Investment
Agency Efficiencies
$79
Revenue Solutions
$55
Fund Transfer
$76
Base Revenues
$27
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FY 2019 Solutions
Agency efficiencies supply 40% of FY 2019 education initiative spending
Highlights of New FY 2019 Investments
January 12, 2018 47
K-12 Education
80%
Universities3%
Economic Security
7%
Public Safety2%
Other8%
FY 2019 New Investments by Agency
$400M in New FY 2019 K-12 Investments
January 12, 2018 48
Student Growth and Inflation
Additional Assistance
New School Construction
Building Renewal Grants
Permanently Increase Teacher Salaries
Other Targeted InvestmentsFully Fund JTEDs
$-
$50
$100
$150
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$450FY 2019 Education Investments (millions)
$2.0$14.1$34.0
$35.2
$88.1
$100.0
$116.0
January 12, 2018 49
AcknowledgementDirector
Assistant Directors
Budget Managers
Senior Budget Analyst
Budget Analyst
Analyst
Chief Economist
Systems Analyst
Office Manager
Matthew Gress
Bret Cloninger
Bill Greeney
Kaitlin Harrier
Charles Martin
Fletcher Montzingo
Bashar Naji
Ben Blink
Ashley Beason
Sarah Pirzada
Cristina Tuñón
Ryan Vergara
Jacob Wingate
Justin Romney
Glenn Farley
Tao Jin
Pamela Ray