Arizona governor signs stripped-down $11.8 billion budget

Arizona Gov. Doug Ducey (file)

PHOENIX (AP) — Arizona Gov. Doug Ducey signed a stripped-down emergency state budget Saturday that contains $50 million in spending to help tenants, homeowners and small businesses weather the coronavirus crisis.

The $11.8 billion spending plan for the budget year that begins July 1 essentially contains no new spending beyond required inflation adjustments and promised raises for teachers. The package was hammered out among majority Republicans and Democrats in the Senate last week.

Republicans who also control the House balked at the plan after it was approved by the Senate. But they finally agreed to support it Monday.

The rare bipartisan Senate package includes money to prevent evictions and foreclosures during the crisis, provide services for the homeless, assist small businesses and pay for food bank operations. It also includes longer welfare payments and a waiver from work requirements. The Legislature rushed through the basic spending plan to ensure the government keeps running amid the pandemic.

The approved budget adds to $55 million in emergency cash approved earlier this month to pay for the health department’s virus response efforts. That money would come from the state’s rainy day fund.

The $175 million in the budget for teacher raises provides the third and final installment of a phased-in 20% increase for average teacher pay.

On Monday, the governor announced $6.7 million that is part of a coronavirus relief package will go to support Arizona food banks, nutrition programs, and programs that serve the homeless.

Ducey commended lawmakers for “coming together, putting politics aside, and showing real leadership” on the budget while cautioning that their work wasn’t done.

“There will certainly be more work to do and many tough decisions ahead of us as we better understand the full impact of this crisis on our citizens and on our economy,” Ducey said in a statement.

The Legislature adjourned for at least three weeks after the House passed the budget. The absence may be longer because the Legislature’s budget analysts believe it will take until May to see the first major effects of the coronavirus crisis on state tax revenue.

That impact is likely to be huge. Ducey has shuttered restaurants, bars and movie theaters in most counties to slow the spread of the virus. Unemployment applications have soared as resorts, restaurants and other employers laid-off workers.

The Legislature began its session in January expecting a budget surplus nearing $1 billion on top of the state’s $1 billion rainy day fund.

The Republican governor in January had proposed a $12.3 billion spending plan for the next fiscal year that included a $45 million tax cut by exempting military pensions. The adopted plan comes in $500 million below that figure. GOP lawmakers had been eyeing much larger tax cut measures before the virus triggered the current crisis.

Ducey hinted in an interview on KTAR radio Tuesday that he expects the rainy day fund to be tapped for the state’s financial hit from the crisis.

“This is going to be more than a rainy day,” he said. “We’re going to utilize every resource we have to protect Arizonans, to make sure we’re fighting this public health battle and then to make sure nobody falls through the cracks, and then as soon as its appropriate that we ramp that economy back up.”

For most people, the new coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia and death. The vast majority of people recover.