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Arizona Gov. Doug Ducey’s 2019 budget includes more money for schools and teachers, which everyone agrees we need. The open question: Is it enough?
Wochit

On paper, Gov. Doug Ducey’s proposed $10.1 billion budget for the 2019 fiscal year would, if approved by lawmakers, be the largest in state history.

But by some measures, it’s not even close to being the biggest.

After adjusting for inflation, for example, Ducey’s proposal would rank 31st in per-resident spending, making it the fourth straight year state government has spent less by that measure, according to an Arizona Republic analysis.

But that only tells part of the story of the shrinking of Arizona government spending.

The actual size of state government, measured in spending relative to the Arizona economy, is at record lows, continuing a three-decade trend.

One exception to that trend, in recent years, has been education spending, which has increased on a per-pupil basis since 2013. However, even with those increases, education spending still remains far below prerecession peaks.

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While it may seem nitpicky to adjust budgets in this way, experts who follow government spending closely contend it’s the most-relevant way to compare budgets over the years.

“There was a point made that this year’s budget is the first year that’s exceeded the one back in (2008), and it’s like so what?” said Tom Rex, an economist and associate director at Arizona State University’s L. William Seidman Research Institute. “If you don’t adjust the dollar figure, it’s meaningless.”

The spending cuts in these adjusted terms largely track the dominance of free-market-oriented Republicans at the state Capitol.

“In many ways, the data you’re sharing is data that should be very reassuring to the taxpayer — that the state of Arizona is being responsible with their dollars and is not obligating them to pay more for a government we can’t afford,” Daniel Scarpinato, spokesman for the Republican governor, told The Arizona Republic.

Education

Some state agencies, notably the Department of Education, have built-in adjustments to keep up with inflation and the growth in people using their services. Ducey proposes to increase Department of Education funding above and beyond what would be necessary for inflation, roughly putting per-student spending where it was in 2009 during the depths of the recession.

MORE: 5 ways budget could affect your kid’s school

The increases in per-student spending aren’t enough to move Arizona up much compared with other states. Rex estimates that would require an extra $4 billion a year in spending, or nearly twice as much as the entire Department of Education budget.

“We’re last or close to last in every measure,” Rex said. “And we’re just digging ourselves deeper. We’re not making any headway.”

But Scarpinato said the increases would have a real impact on Arizona schools and cautioned against using per-pupil spending as a proxy for school quality.

“We would hold up our public schools to those in Washington, D.C., Detroit, Newark, Chicago, these states that are spending much more, but have really dismal public schools,” he said. “Spending isn’t a measure of success; however, we do believe because of the great work happening in our schools, that it’s the right investment.”

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Gov. Doug Ducey and the Legislature gave teachers a raise as part of this year’s budget. But that’s highly unusual. Normally, schools are in charge of how much their teachers are paid.
Wochit

A long trend of smaller budgets

Aside from money spent, three factors determine the true size of a budget: inflation, population and the economy.

Inflation, which describes how prices for goods and services increase over time, forces government to increase spending just to keep its service level the same. For example, in the classroom, school supplies, textbooks and teacher salaries have all seen increases over time due entirely to inflation.

Population growth frames government spending in terms of how much it spends on each Arizona resident. Every additional person spreads state spending a little bit thinner. These figures come from the Census Bureau.

Finally, the government’s size relative to the economy, measured in personal-income reports from the Bureau of Economic Analysis, quantifies the financial commitment that government makes to public services and how much is being taken out of people’s paychecks in taxes.

Projections for fiscal year 2018 and 2019 were taken from the governor’s budget proposal.

MORE: AZ budget: 10 state agency funding requests

These adjustments aren’t fool-proof. They don’t, for example, capture the effect of greater government efficiency or the potential benefit or drawbacks of the privatization of certain public services. For 2019, the Governor’s Office claimed that it saved $78.7 million by improving efficiency.

“The governor doesn’t believe that just spending more money through state government is going to lead to better government,” Scarpinato said.

No matter how you slice it, Ducey’s proposed budget continues a decades-long trend of a shrinking state government.

For critics, the trend has negatively affected residents in the form of reduced services or higher fees such as tuition at the state’s public universities.

“It’s an incremental withdrawal of services,” said George Cunningham, who was deputy chief of staff for finance and budget under Democratic Gov. Janet Napolitano in the 2000s when spending per-resident was at its peak. “With incremental reductions, what you get is a reduction in service level or … very often there are fees that are increased to make up the difference.”

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