PHOENIX - The Arizona legislature adjourned after approving a budget that could allow $1 billion in new bonding for higher education.

The $9.86 billion fiscal year 2018 budget legislation, passed May 4, establishes as permanent law a new annual appropriation of $27 million to the state’s three public universities beginning in fiscal 2019 and extending through 2043.

The amount is to be increased annually by the lesser of 2% or inflation and is to be used for capital project debt service or cash construction costs. The new money will allow the schools to leverage some $1 billion of bond borrowing to meet their infrastructure needs, Arizona Gov. Doug Ducey said.

Arizona Gov. Doug Ducey
Arizona Gov. Doug Ducey hailed a state budget that will boost higher education bonding. Arizona Governor's Office

The budget also included about $157 million of increases in K-12 spending, a signature issue for Ducey. That includes $68 million for a 2% teacher pay raise over two years, as well as $80 million for the construction and maintenance of school facilities. An analysis of the budget’s expenditures compared with projected revenues released by the Arizona Joint Legislative Budget Committee shows an ending cash balance of $38 million.

“Arizona has passed a budget that prioritizes education, boosts teacher pay, and invests in our universities — all without raising taxes on hardworking Arizonans,” said Ducey. “For the first time in a decade, we are making significant and lasting investments to grow our state — in state parks; in public schools and universities, in our roads and highways; and in programs to combat drug addiction, provide second chances to inmates, and place foster children in permanent homes.”

While Ducey, a Republican, painted the budget bill as bipartisan, GOP lawmakers were eager to claim a win while the minority Democrats were less than thrilled with the final product.

“Conservative budgeting over the past few years put extra money in our state coffers,” said Senate President Steven Yarbrough, R-Chandler. “With that, this year we boosted teacher paychecks, provided funding for school repairs and the construction of six new schools, targeted tens of millions of dollars to schools getting results, guaranteed yearly funding for university building projects and provided an additional $30 million to repair our roads. We also delivered a broad-based tax cut and left the state with a structurally balanced budget. I'd say the people of Arizona are better off because of this state budget.”

House Democrats released a joint statement accusing the Republican majority of failing to properly consider many Democratic proposals, and of shortchanging K-12 teachers relative to the 3% pay raise Democrats supported.

“We are not deterred or disheartened,” the Democrats said. “The Republicans have misplaced priorities that have created crisis in our state. Democrats remain committed to making Arizona a place where all families can successfully live, study, work and play for generations."

The legislature adjourned Wednesday night, and will reconvene for the next regular session in January.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.