Arizona Legislature Approves $16.1 Billion State Budget Amid Deficit Concerns

Arizona Legislature Approves $16.1 Billion State Budget Amid Deficit Concerns

The Arizona Legislature has passed a $16.1 billion budget for fiscal year 2025, addressing a $1.4 billion budget shortfall. The budget includes significant reductions from the previous year's $17.2 billion budget. It also entails a 3.45% lump-sum cut for nearly all state agencies, sparing public safety agencies such as the state police and prison system. Despite the cuts, the budget includes $29 million in one-time additional assistance to public schools and $1 million in one-time funding for a teaching academy.

The budget has been a point of contention, with both Democratic and Republican lawmakers criticizing it for prioritizing expedience over thoroughness. Democratic legislators specifically opposed the allocation of $75 million from the state's opioid settlement funds to the Department of Corrections, fearing legal challenges. The budget also protects the state's universal Empowerment Scholarship Account (ESA) program, which has been criticized for contributing to the deficit.

In addition, the legislature passed a measure lifting the "Aggregate Expenditure Limit" for Arizona schools for the next fiscal year, temporarily preventing massive cuts to school budgets. Governor Katie Hobbs praised the bipartisan agreement for balancing the budget and investing in childcare, health and human services, and combating the fentanyl epidemic, although she expressed concerns about some of the compromises made.

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