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Governor Releases Details of Budget

Governor Jan Brewer is proposing a nearly $9 billion spending plan for the coming fiscal year that provides more money for schools, hires former police officers to investigate allegations of child abuse and sets up a needs-based scholarship for community colleges.
The plan also provides a little more money for the state's university system. But Brewer wants to revamp how the cash is divided up, a move that John Arnold, the governor's budget chief, said is likely to reduce the allocation for the University of Arizona.
Brewer also is offering a 5 percent pay hike for state workers -- the first in five years -- but with a requirement that state employees give up their merit protections to qualify. Brewer denied that was a bribe, calling it an "incentive.''
She is seeking more money to schools to help ensure that third graders can read at the proper level and not get held behind, as a new law that takes effect in 2014 would require.
And she wants to revamp how the state funds education in a way that would deny new schools to residents of some rapidly growing areas. (See related story)
The bottom line, said Brewer, is that the state has to live within the budget it has -- even though that budget is the same size as it was in 2007, before the recession.
"I think it's just really, really important that we keep moving in the direction of a plan of a leaner, smaller government providing better services,'' she said. And the governor said the budget is laid out to anticipate future problems, including the expiration of the temporary sales tax at the end of May 2013 and new costs to the state if and when the federal health care plan kicks in at the beginning of 2014.
Even with some additional spending for the remainder of this budget year and next, Brewer said enough is being set aside to take care of those issues without going into debt again. In fact, her plan calls for the state to start paying off some of its debts, not just in buying back several state buildings but also in the money it borrows at the end of each year from school districts in an accounting maneuver to make the state's books look like they're balanced.

Higher education
The governor's budget proposes revamping the current system of funding universities based on the number of students enrolled and the types of degrees offered, a system that currently favors the University of Arizona.
Arnold said the plan calls for taking $15 million away from the schools under the current system, adding another $15 million of new money, and then reallocating it based on some performance standard. While those standards do not yet exist, Arnold said they are likely to focus on an increase in the number of degrees issued, something likely to favor Arizona State University and Northern Arizona University.
On top of that, Arnold said Brewer wants to give $15.3 million to the Board of Regents to allocate to ASU and NAU for "course redesign.''
"The governor has set the goal to double degrees by 2020,'' he said. "If we're going to do that we're going to have to become much more efficient in how we teach.''
He said NAU already has done a good job using technology for that but needs more money.
"We would like to push those ideas down to ASU as well and get our freshman courses to be much more effective,'' Arnold said. He said none of that applies to the U of A because of an enrollment cap, meaning it will not have as much of a crush in the number of new students that need to be taught.
At the community college level, the governor wants $10 million for scholarships, awarded based on needs except for veterans.
"It has to relate to a locally identified workforce need,'' Arnold said, meaning scholarships would be awarded only to students enrolling in those programs designed to provide employers with specific skills.
Regents' President Tom Anderes said one thing missing from Brewer's budget is more money for the Phoenix campus of the University of Arizona College of Medicine to increase the number of students who can enroll.
"Arizona faces an alarming shortage of doctors and medical professionals,'' Anderes said in a prepared statement.

K-12 education
Brewer is setting aside $50 million to help schools comply with the "Move on When Reading'' law approved two years ago.
That law requires the state to hold back a third grader whose reading skills "falls far below the standards'' on the reading portion of the standardized test. Arnold said 4,100 third graders failed the test and would not have advanced to fourth grade had the law been in effect.
That happens in 2014.
The money would be divided up among elementary schools to help with reading intervention programs in kindergarten through second grade. Arnold said all districts will share in the funds, regardless of whether they have failing students.
Brewer also wants to give an extra $686,000 to the state Department of Education to hire more investigators to review complaints against teachers.
"Teachers remain in the classroom until their complaints are adjudicated so it's important that we do those as quickly as possible,'' Arnold said. And the governor wants an online database with the records of all teachers that parents could review showing their certification, disciplinary record and anything positive in their files.
Her budget also contains $4.6 million for the Department of Education that Arnold said will enable the state to get another $11.8 million in federal funds.

Health and welfare
Brewer wants an extra $3.7 million for Child Protective Services.
Some of that is earmarked to hire 28 investigators with a background in law enforcement to work with Child Protective Services. That meets one goal set by a special committee which reviewed the agency's operation and concluded that former police officers who understand criminal law need to work with social service workers looking at cases of child abuse.
Arnold said other funds are needed to provide a new step in the promotion scale for child welfare workers to encourage those with experience to remain in the field. He said the current system is set up so that those who want more money have to become office workers.
He said another $25 million is needed in Temporary Assistance for Needy Families and $17 million for adoption programs largely to make up for the loss of federal funds.
The state also is offering to spend another $39 million to provide services for the seriously mentally ill.
Arizona was sued 30 years ago for failing to meet its obligations to provide adequate care. A judge agreed two years ago to suspend the requirement for the state to put in more funds during the budget crisis. But that suspension ends June 30 and Arnold said he expects mental health advocates to demand Arizona do more.
Brewer has no plans to restore cuts made last year to the Arizona Health Care Cost Containment System for both patients and providers which were approved by federal Medicaid officials.
The big unknown is the federal health care program set to begin in 2014 which will require the state to increase the number of people covered. While most of the cost of the expansion will be picked up by the federal government, Arnold figures the change will eventually cost Arizona an extra $420 million a year.

Public Safety
While the prison population remains stable, Arnold said Arizona still will need more prison beds. Brewer wants $50 million this coming year to construct a maximum-security prison near Buckeye, and then another nearly $18 million the following year to begin contracting out to private firms to operate an 2,000 medium security beds.
There also is money for 305 new corrections officers at an annual cost of $18.5 million.
The budget also includes $6.3 million for new vehicles for the state Highway Patrol.
Arnold said the state has not bought any new vehicles for two years. The result, he said, is that the average patrol car has 96,000 miles on it.
Brewer also wants money to help DPS deal with a backlog of DNA cases at the state crime lab.

State employees
Brewer is willing to provide a pay hike of 5 percent -- but not for everyone.
Anyone not covered under the state personnel system would get the money, as would managers who are covered now but would lose the protections which now allow them to appeal any discipline or firing. Police officers also would get the raises but allowed to keep their union.
But everyone else would get the money only if they voluntarily agree to give up their merit system protections.
"I think it's an incentive if they choose to do that,'' Brewer said. "If they believe that the benefits are better in staying in the merit system, they've got that choice.''
Brewer acknowledged she hopes the financial carrot is enough to ease the way for her plans to eventually have all employees on an "at will'' basis, meaning they can be fired without any redress.
Sheri Van Horsen, president of Local 3111 of the American Federation of State, County and Municipal Employees, said she doubts workers will voluntarily give up their merit protections, even for the first raise since 2007. And Van Horsen said the workers believe they are entitled to more money without having to surrender their rights.
She noted that the state took away a 2.5 percent incentive pay provision several years ago and reduced pay further last budget year with mandatory days off without pay. At the same time, Van Horsen said, workers are doing more with less, what with a hiring freeze and greater caseloads.
University employees are not part of any pay hike plan, with the governor saying it will be up to the Board of Regents to decide if it has enough money to provide raises to faculty and staff.