PHOENIX — Lawmakers put the finishing touches on the $18.3 billion state spending plan late Thursday — a package that includes a $16 million cut to state universities.
Republicans in the legislative majority, who pushed for the cuts to reduce state spending, said the universities can easily afford it.
The deal is a compromise between Democratic Gov. Katie Hobbs, who had proposed no cuts, and Republicans who, wanting to reduce overall spending even more, had proposed taking twice as much from the three public universities.Â
Universities weren't specifically singled out. Instead, the package imposes 2.5% cuts in spending across multiple state agencies.
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There are exceptions for some programs, such as the state Medicaid system, where costs are determined by the number of people enrolled. Budget negotiators also placed what they considered certain essential services off limits, including the Department of Child Safety, state police, and the prison system.
But out of the $23.8 million in across-the-board cuts, Arizona State University lost $8.1 million, the University of Arizona took a $4.7 million reduction, $2.6 million was taken from Northern Arizona University, and the University of Arizona Health Science Center lost more than $1 million.
"What will be a direct result of that is basically increasing tuition for students at the three universities,'' said Rep. Cesar Aguilar, a Phoenix Democrat.
He said that comes despite a constitutional requirement that instruction be "as nearly free as possible.'' But that phrase has proven largely unenforceable, with the Arizona Supreme Court ruling years ago that it means what the Legislature says it means.
The University of Arizona campus.Â
Goodyear Democratic Rep. Mariana Sandoval sought to put it in other terms.
"We only fund our state universities at 12% of their budgets,'' she said. "People already have a hard time going to college.''
But Kingman Republican Rep. John Gillette said universities are getting millions of dollars in grants and contracts, many of them from overseas.
He produced charts to show a majority of the money collected in tuition comes from out-of-state and out-of-country students.
The schools have never disputed that, saying they are using the dollars from those who want to attend state universities, whether on campus or remotely, to help keep tuition low for Arizona residents. Gillette, however, had a different take.
"This is big business,'' he said. "If they're going to remain big business, then they don't need state money."
Peoria Republican Rep. David Livingston pointed out that this is a one-time $16 million cut.
"These universities have multi-billion-dollar budgets,'' he said.Â
It's not just the universities that are getting hit.
Tucson Democratic Rep. Consuelo Hernandez said other education programs are being shorted, including adult education programs.Â
"We talk a lot in this chamber about supporting working families,'' Hernandez said. She said the first step for many to get out of poverty is through free adult education programs, particularly for those who don't have a high school diploma.
Without that, "You can't even get a job at your local grocery store,'' Hernandez said, saying the funding "would have benefited so many of our families, not just in Pima County but across the state.''
But Republicans, in giving the package final approval, were more focused on what they said was the bigger picture, including taxes.Â
"Arizona has become the first state in the country to full deliver the Trump tax cuts,'' said Republican Senate President Warren Petersen. "And what that means is good news for the citizens of Arizona.''
Those cuts mirror what Congress approved last year in HR 1, the so-called "Big Beautiful Bill,'' which included a package of tax breaks for individuals and businesses.
Hobbs jumped out last November to embrace at least some of that, notably an increase in the standard deduction for Arizonans who don't itemize on their income taxes. It is going from $15,000 to $15,750 for single filers, and twice that for married couples.
There also is an exemption from state income tax for tips and overtime, and an extra $6,000 deduction for seniors.
Republicans, however, insisted on mirroring the whole Trump package in Arizona. It includes, at least for the first year, bigger tax breaks to the wealthiest who pay the most in state and local taxes as well as some new tax cuts for businesses.
Tempe Democratic Sen. Mitzi Epstein blasted that plan. "The problems, in my opinion, with this budget lie entirely with the Republican Party because they have recklessly hacked away at revenue year after year without ever looking around to see how are Arizonans doing,'' she said.Â
It started, she said, with the previous decision by the Republican-controlled Legislature, at the behest of Republican then-Gov. Doug Ducey, to scrap the state's progressive personal income tax, which had rates as high as 4.5%, with a flat 2.5% figure.
Epstein said that reduced state revenues by about $2 billion a year below what they would otherwise have been, though Republicans have said it has been made up with higher economic activity.
This latest package, with a $1.45 billion tax break over four years, only adds to the problem, Epstein said. She said the budget is "slashing the foundations we need for upward mobility,'' including not just social programs but public education.
Rio Verde Republican Rep. Cody Reim took a different view, explaining why he was voting for the budget and the tax cuts.Â
"When you hear the government say that something is lost revenue when it comes to tax refunds and lower taxes, what you are actually hearing is they want more of your money,'' Reim said. "It is not the government's money.''

