Gov. Janet Napolitano is expected to offer a budget next month that puts a major focus on, and increases spending for, K-12 and early education, children's health care and better leveraging the state's universities to help with economic and work force development.
Napolitano has made the latter the showcase of her one-year term as chairwoman of the National Governors Association. The goal of Napolitano's NGA effort is to help Arizona and other states compete globally, improve their work force quality and diversify their economies.
She's also traveling to North Carolina this week for meetings related to early education and preschools. The Democratic governor will not offer any tax increases in her budget plans, but may not immediately jump on board business calls for a third straight year of property tax cuts.
The governor's budget aims are to expected to focus on improving Arizona's lackluster schools and education rankings; easing health care burdens for working class families and small businesses, investing more in children's programs and better coordinating university research with the private sector and K-12 education.
The state is also facing another year of budget surpluses despite the housing slowdown, and has infrastructure needs that include highways and water .
The Democratic governor won a second term in November and that large margin of victory coupled with Democratic gains in the Republican-majority Legislature and public support for her agenda raises expectations that there will be increased spending in the next proposed budget.
That worries fiscal conservatives concerned about the growth of state government under Napolitano's tenure; whether bigger government and more spending will solve Arizona's problems and what the state will face during the next economic and fiscal downturn.
Napolitano has said she will produce a balanced budget but has also stressed that the state needs to invest in areas such as education, universities, transportation, water, work force and economic development.
Spokeswoman Jeanine L'Ecuyer said the governor will present her ideas when the Legislature reconvenes in January.
The governor has already said the state plans on increasing college financial aid to help offset tuition hikes at public universities. She could also put more focus on preschools, children's health care and other early education programs. A centerpiece of the governor's first term was state funding for local all-day kindergarten and voters approved an 80 cents per pack tax hike on cigarettes last month. That money is going towards early education and children's programs.
Noah Clarke, an economist for the conservative Goldwater Institute, expects Napolitano to push for more government spending on education and attracting high-tech companies to the state.
Clarke points out that state education spending was bumped up by $452 million last year and now accounts for 42 percent of the state's budget. The total has almost doubled from $2.6 billion in 2003 to more than $4 billion this year, Clarke said.
He questions whether more spending is the answer.
"Despite this enormous increase in spending, test scores are flat and half of Arizona's fourth graders cant' read," said Clarke.
Arizona ranks at or near the bottom compared to other states when it comes to high school dropout rates, test scores, child care assistance to the working poor and other education indicators. Democratic-oriented groups, such as the Children's Action Alliance, Arizona Education Association and Service Employees International Union, want to see the state increase child care assistance for the working poor, expand health coverage for children and shun more business tax cuts in favor of what they see as needed investments.
Tom Jenney, executive director of the conservative Arizona Taxpayers Federation, worries about the growth of government since Napolitano took office in 2003 and what will happen if the economy slumps and surpluses become deficits.
"One problem with rapid budget increases during a boom time is that they are inevitably followed by painful budget cuts in the succeeding recession -- turning the state budget into a scary rollercoaster ride," said Jenney.
Jenney points out that the budget agreement between Napolitano and the GOP Legislature bumped up state spending last year by 15 percent, a number greater than population and personal income growth in the state.