Type: News

State budget has small key wins for AZ children & families, BUT more needs to be done

Children's Action Alliance's annual legislative agenda is designed to assure the necessary community conditions exist so all Arizona families have equitable access to high-quality education, health care, child well-being, services, and economic opportunities. Our agenda is advanced through funding in the 2023-2024 state budget.  Last week, Governor Hobbs passed and signed the budget, and there were some small but key wins for Arizona children and families including:

  • KidsCare Program Expansion: The budget expands KidsCare eligibility within Arizona Health Care Cost Containment System (AHCCCS) to 225% of the federal poverty level, providing healthcare to an additional 12,000 children. Children's Action Alliance advocated for a higher threshold of 300% of the federal poverty level.
  • Strong Families AZ Home Visiting System: The budget allocates $2.5 million to support the Nurse-Family Partnership in the Strong Families AZ Home Visiting System.
  • Reducing financial barriers for youth attempting to exit the Juvenile Justice System:  The budget allocates $250,000 to offset the loss of revenue from the elimination of some fees and fines that often create financial barriers for young adults.
  • Positive Parenting Program Pilot: The budget establishes a pilot program for the Positive Parenting Program, focusing on post-permanency placements.
  • Emergency Shelter and Transitional Living: Funding is increased to provide better emergency shelter and transitional living options for children and youth in foster care.

While acknowledging the importance of these investments, more is needed to determine how these programs will be implemented.  And much more is needed to allow all Arizona families to thrive.

These are Children’s Action Alliance’s legislative priorities that still need to be addressed: 

Early Childhood 

  • State investment to increase child care provider reimbursement rates. 
  • Increased access to high-quality early learning settings such as Head Start, child care, and preschool. 
  • Expansion of mental and behavioral health support in care and education programs. 

 Children and Family Health 

  • Comprehensive dental care for adults covered by Medicaid. 
  • Streamlined enrollment and uninterrupted AHCCCS coverage for children. 
  • Extended AHCCCS eligibility for non-citizen children and pregnant individuals. 

 Child Welfare 

  • Establish a coordinated and collaborative statewide effort to review and reform Arizona’s mandated reporting system. 
  • Ensure foster children placed with kin receive the same level of support as they would get in a community foster home. 
  • Increased access to services for kinship families not formally involved in the child welfare system. 

Concerns Surrounding the Budget 

Children's Action Alliance has some concerns about the recently passed budget, considering the crucial need for increased investments in Arizona's children and families. One major concern is the potential shortfall in actual state revenues or higher-than-projected expenditures. 

The budget relies on a small ending balance that could quickly diminish. The projected ending balance for fiscal year 2024 is $7.8 million – less than 1% of projected revenue. Should revenues fall short of projections, it is very likely the budget will become unbalanced. While $1.4 billion is available in the Rainy-Day Fund, those dollars would provide a one-time solution. If it is determined that ongoing spending exceeds ongoing revenue, the legislature would have two choices: (1) Permanent cuts to spending or (2) Permanent increases to revenue. 

The budget fails to adopt any controls on the growth of the Universal Empowerment Scholarship Account (ESA) Program.  In the eight months since applications for universal ESAs opened up, enrollment in the ESA program (including the categories that previously existed) has grown from 13,200 to 56,134 students as of May 15, increasing by nearly 1,000 in one week. Enrollment is expected to increase as the new school year approaches. The cost to the state’s General Fund depends not only on the number of ESA students but also on whether those students had previously been enrolled in a public school (and therefore at least partially funded through the state’s General Fund). The absence of a cap or any other limiting criteria, such as an income limit, means participation in the ESA program could far exceed available funding. Learn more about ESAs here:  https://azeconcenter.org/arizona-school-vouchers-explained/  

The budget provides only one-time funding for issues that appear to be ongoing. The budget process requires the legislature to identify projected ongoing revenues and expenditures for the two years following the year being appropriated. One-time expenditures are not included. While capital projects, highway construction, and repairs are clearly one-time expenditures, other spending that has been categorized as one-time appears to really be ongoing. This includes $12 million in the Department of Child Safety to replace federal and other funds that will no longer be available and $60 million in the Department of Corrections for increased contract costs. While the Statement of Revenues and Expenditures reports more than $700 million remaining at the end of the fiscal year 2026, that number would shrink if even a portion of the nearly $3 billion identified as one-time expenditures for the fiscal year 2024 is actually ongoing. 

Arizona's Voters Deserve a Say in the State's Budget

The voices of voters are once again being silenced. After several moves that are undemocratic, lacking in transparency and clearly an attempt to rush through billions of dollars of taxpayer money with almost zero input from the public, the final floor vote is set for tomorrow morning.   

 At 5pm yesterday evening, the state legislature introduced its slate of budget bills publicly. The budget details, negotiated between the Governor’s Office and Republican Leadership, were released and committee hearings were held less than 24 hours later. The public had little to no chance to review the content, synthesize the material or share their feedback on an approximately $17 BILLION budget. This budget is made up of tax dollars paid for by you, the citizens of Arizona. This is a continuation of the pattern of silencing the voices of voters in recent years. 

 Worse, the House Appropriations committee, in a partisan move, immediately combined all 17 bills into one vote. And then limited members ability to ask questions of staff about the content. They allowed zero public comment on the measures. This even though members of the public had taken time to be present to testify. 

 Questions and concerns from Representatives as well as stakeholders and other members of the public had begun to bubble up, in particular about the long-term budget ramifications of the failure to place a cap or any meaningful oversight on the out-of-control expansion of Empowerment Scholarship Accounts (ESA’s).

Rather than hear or work to address those concerns in the only public forum the citizens have once budget bills are released, Committee leadership chose to close ranks and shut out dissent. 

 Children’s Action Alliance and the Arizona Center for Economic Progress believe strongly that citizens should take every opportunity to participate in the process of government and have their voice heard and that lawmakers have a duty to listen to those they represent, even the ones they disagree with.   

 *CAA and the AZ Center will have additional analysis of the budget proposal in the coming days.   

Arizona poised to end seizure of benefits owed to foster children

Arizona is one of a growing number of states considering proposals to prohibit child welfare agencies from seizing foster children’s federal benefits. Nationwide and in Arizona, roughly 5% of all children and youth in foster care qualify for Social Security Administration disability and survivor benefits. They qualify for these benefits because they are disabled or have lost their parents. But most foster children never see these benefits, or even know that are receiving them. That is because the Arizona Department of Child Safety (DCS) intercepts the funds and applies them to the costs of the child’s own foster care. This longstanding practice, known as “benefits mining,” has come under scrutiny following a 2021 investigation by the Marshall Project and National Public Radio. The investigation estimated that in 2018 alone, child welfare agencies across the US seized $165 million dollars owed to foster children and used the money to pay for the costs of their foster care placements. During the 2022 Arizona State Fiscal year, DCS seized an average of $764 a month from nearly 700 foster children, totaling $6.25M in revenue.   

Legislation to end Arizona’s practice of "benefits mining" is currently working its way through the state legislature. House Bill 2559 (Montenegro) will prevent DCS from using children’s federal benefits to pay for the cost of their own care while in DCS custody and require that the benefits be accounted for, protected, and saved for the children’s own use when they exit foster care. The fate of HB 2559 will depend on whether it survives state budget negotiations as a General Fund appropriation will be needed to make up the dollars that DCS will lose.   

While the funds DCS “mines” from foster children represents just a tiny fraction of the agency’s budget, for a child who has experienced foster care they represent the ability to pay for college, a car, a house, or even food and other necessities. For a young adult who may not have another safety net after aging out of care, these funds can be the difference between surviving and thriving.  

Learn More 

New Hires

Welcome our newest hires to Children's Action Alliance and the Arizona Center for Economic Progress.

Sarah Bentley is the Communications Engagement Coordinator for both CAA and the AZCenter.  She leads both state and federal advocacy outreach for issues like the Aggregate Expenditure Limit (AEL) school spending cap, and Paid Family and Medical Leave (PFML). Prior to joining the team, she worked as a Public Affairs Executive at Rose Allyn Public Relations where she specialized in crisis control, event management, and investor relations. During the pandemic, Sarah served as a Policy Intern for Phoenix Mayor Kate Gallego where she handled constituent concerns and community outreach. Sarah holds a Bachelor’s degree in Public Service and Public Policy as well as a Bachelor’s degree in Sustainability from Arizona State University. She is excited to use her experience in community engagement to advance the mission and policy agenda of CAA and the AZCenter.

 

Matt Jewett returned to the role of CAA's Director of Health Policy in March 2023, having previously worked in that role and as CAA’s Research Associate from 2004 to 2013. He has led outreach campaigns that increased AHCCCS and KidsCare health insurance enrollment. Overseeing grants for Mountain Park Health Center from 2013 to 2023, Matt managed up to $35 million a year in grant funds, including for the construction of a new clinic. Matt was a member of the Creighton Elementary School District Governing Board in Phoenix for six years. He is a graduate of the University of Arizona, has studied graduate-level public health at A.T. Still University, and enjoys a good cup of tea, growing his vinyl collection, and exploring his home state of Arizona…and the world.

 

As an Economic Policy Analyst for the AZCenter, Connor Leavy Murphy performs data analysis, research, and advocacy to advance policy solutions at both the state and federal level addressing poverty, economic well-being, and a fairer tax code. Most recently Connor was a Policy Analyst with the City of Santa Fe, New Mexico in the City Attorney’s Office and the Office of Legislation and Policy Innovation. Previously, Connor worked as a Field Organizer with the Arizona Democratic Party’s Coordinated Campaign, Mission for Arizona. In May 2020, Connor graduated from the Sandra Day O’Connor College of Law at Arizona State University with a Master of Legal Studies. Prior to earning his MLS, Connor worked as a Donald W. Reynolds Fellow with the Carnegie-Knight News21 Initiative, where he received the 2019 Robert F. Kennedy Journalism Award in the college category as a member of News21.

 

JoAnna Mendoza is the Executive Director of the AZCenter and a retired US Marine Veteran.  After retiring from the Marine Corps, JoAnna worked for a foster licensing agency contracted by the State of Arizona to find homes for children in foster care and developmental homes for children and adults with special needs. A few years later, JoAnna transitioned to working with vulnerable veterans and found her way to serving in government again, as a Veteran Service Representative and the Deputy District Director for a Member of Congress from the Arizona Congressional Delegation. JoAnna holds a Bachelor’s Degree in Intelligence Studies, a Master’s of Science in Leadership with an emphasis on disaster preparedness, a Public Leadership Credential from Executive Education at Harvard Kennedy School, a Brand Management Certificate from Cornell, and a Professional Certificate in Social Media Management from Georgetown.

 

Franklin Zyriek is an Economic Policy Analyst for the AZCenter and joins the team after serving as a legislative correspondent in Senator Kyrsten Sinema’s Office. In that role, he worked on energy, environmental, public lands, and Tribal issues and supported Senator Sinema’s actions on the U.S. Senate Committee on Commerce, Science, and Transportation. Franklin grew up in Tempe and is a proud product of Arizona’s public K-12 schools. He earned his Master’s in Public Policy degree from American University as well as a B.A. in Communications, Legal Institutions, Economics, and Government and a Certificate in Advanced Leadership Studies from AU. Other previous roles include serving as a deputy field organizer for the Biden presidential campaign in Iowa and graduate legislative intern in Salt River Project’s federal affairs office in D.C.

 

Meet the CAA and AZCenter teams

Huge Win for AZ Child Care System-DES Provider Rate Adjustments!

On Friday, March 24th, the Department of Economic Security (DES) shared a message with early childhood educators throughout Arizona announcing new, exciting updates for the early childhood system statewide. 

These improvements are important to continue to strengthen Arizona's early childhood system. The updates include DES provider rate adjustments, an education workforce scholarship program, and targeted childcare provider grants. These improvements will facilitate greater access to high-quality childcare, supports for the early childhood workforce including providers, and incentives for new providers to contract with DES or become a DES Certified Family Child Care provider.  

Effective April 1, 2023, the DES Division of Child Care will implement a rate increase for all DES childcare providers through June 30, 2024. The reimbursement rate for infants will increase to the 75th percentile of the 2022 Market Rate Survey, and district rates will change to one statewide rate for each age group by care setting. These changes will bring most rates to the cost of providing care at the minimum health and safety standards, and to the cost of high-quality care when including the enhanced quality reimbursement rate of 50 percent.

Historically, childcare reimbursement rates have usually been calculated by geography and age, resulting in rural providers receiving reimbursement at devastatingly low rates. This adjustment will create a level playing field throughout the state, with potential triple reimbursement rates for providers in rural and underserved communities. 

We would like to give special thanks to the Arizona Early Childhood Alliance (AZECA) Leadership team for their collaboration with DES in reviewing and making priority recommendations on how Arizona could most effectively distribute the remaining CCDF relief funding. These changes will serve as mechanisms to sustain the Arizona early childhood system and strengthen Arizona families statewide.   

The Bills That Got Away

Every year, Arizona Legislators introduce hundreds of bills, and very few of them go through the entire process to end on the Governor’s Desk for a signature. And each year, many bills never get a hearing at all. There are many good proposals to help children and families in Arizona thrive that deserve recognition and merit consideration for future legislative action. Here are some of CAA's top picks.

HB 2071, Sponsor: Laura Terech, Schools; corporal punishment; prohibition 

Hard to imagine but despite overwhelming evidence that it is harmful, Arizona law still allows corporal punishment in public and charter schools. This bill would have prohibited teachers, principals, and other school employees from using corporal punishment as a form of discipline.   

HB 2137, Sponsor: Athena Salman, Children's health insurance program; eligibility 

This bill would expand eligibility for KidsCare, the state's children’s health insurance program (CHIP), to families earning under 250% of the federal poverty level (currently 200%).  These families are working but not earning enough to afford employer-based or marketplace health insurance coverage.  This would not only decrease the number of uninsured children in Arizona, but it would save the state the money spent on uncompensated care when emergencies occur or when preventative care is avoided.  

HB 2160, Sponsor: Judy Schwiebert, School mental health professionals; academy 

We know the COVID pandemic amplified an existing mental health crisis across the country, and it has been very prevalent in school-aged children and adolescents. Arizona is already facing a shortage of school personnel such as teachers, bus drivers, and aides. This bill would have created a School Mental Health Professional Academy to incentivize and train school psychologists, social workers, and counselors, who are often the first line of defense when school-age children are struggling.   

HB 2246, Sponsor: Oscar De Los Santos, AHCCCS; eligibility; immigration status  

Currently, a person’s immigration status might prevent them from qualifying for Medicaid health care insurance benefits, even if they meet all of the other criteria.  This bill would have removed this barrier reducing Arizona’s uninsured rate and the costs associated with uncompensated emergency and preventative care.  

HB 2365, Sponsor: Leezah Sun, Foster children; adulthood; stipend 

When children age out of the foster care system, the transition to adulthood can be difficult. Unless they enter extended foster care, they lose most of the resources and supports provided to them and are expected to care for themselves.  In an attempt to help ease that transition, this bill would have provided all children who are in the care of the Department of Child Safety when they turn eighteen, a monthly stipend of $1200/month until they reach the age of twenty-one.  

HB 2407, Sponsor: Laura Terech, Preschool pilot program; appropriation 

Children who attend high-quality preschool programs are more likely to enter kindergarten ready to learn and succeed. Unfortunately, many families most in need are unable to find or afford to place their children in these programs.  This bill would have established a school district-based Preschool Pilot Program and set aside $3M in funding to pay for it.   

HB 2685, Sponsor: Alma Hernandez, Appropriation; Child Care Assistance 

For families to be self-sufficient, they need safe, reliable, and quality places for their children to go while they are working.  One year of infant care can often cost as much as a year’s tuition to a state university, leaving families to choose between earning more or staying out of the workforce to care for their children.  This bill would have appropriated $30M to the Department of Economic Security to help low-income working families afford child care in home, center, or faith-based settings.   

SB 1267, Sponsor: Christine Marsh, Eligibility; children's health insurance program 

 Similar to HB 2137, this bill would have increased eligibility for the children’s health insurance program to 300% of the federal poverty level. Again, reducing the number of uninsured children and reducing the costs associated with uncompensated care. 

SB 1643, Sponsor: Sally Ann Gonzales, Indian child welfare; custody proceedings 

This bill would have codified the protections of federal The Indian Child Welfare Act (ICWA) in state law. ICWA was passed in 1978 to combat the systematic separation of Native American children from their parents, families, and tribal communities following a long history of forcibly removing Native American children from their homes and sending them to boarding schools and non-Native adoptive families. The purpose of ICWA is to “protect the best interests of Indian children and to promote the stability and security of Indian tribes and families” (25 U.S.C. § 1902). ICWA requires child welfare agencies to go to greater lengths to preserve families before Native American children can be separated from their parents, provides a preference for the placement of Native American foster children with relatives and tribal members, and allows tribal courts to take jurisdiction over foster care cases from state courts.  With a Supreme Court challenge to ICWA pending, a number of states have passed laws to preserve these important protections for Native American children, families, and tribes.   

The Countdown Begins - AZ Students Need a Permanent Fix to the School Spending Limit

Arizona voters approved into law a limit on what public schools can spend in a year based on the needs in 1980. If schools exceed the limit in a school year, as they did last year and again this year, the law allows the legislature to provide an “expenditure override” to allow districts to spend funds that have already been budgeted, with a two-thirds vote in both the House and Senate. An expenditure override does not increase taxes and is independent of the legislature’s budget decisions during the year. 

The spending limit is antiquated and based on what school needs were like in 1980. That is evident by the fact that Arizona is hitting the spending limit this year despite Arizona school funding being the lowest in the nation. Without the expenditure override, schools would be forced to make extreme cuts before the end of this school year. It would be an economic disaster for the Arizona public school system especially since the state funding per pupil ratio is among the lowest in the nation. Arizona’s public schools are already experiencing a teacher shortage and struggling with additional costs caused by the pandemic. 

Today’s school state funding should not be restricted to budgets created over 40 years ago.  

The Arizona legislature must: 

  1. Send a referral to the ballot to permanently address the issue.  
  1. Continue to pass a resolution to override the limit for each school year until voters address the issue.

The Problem with the Limit. Arizona’s Aggregate Expenditure Limit is outdated. It is based on education spending in the 1980s – before personal computers, the emphasis on STEM education, concerns about school safety, teacher shortages, and increased spending for special education students. Today, it threatens Arizona’s ability to make the investments needed to increase its per-student funding ranking above 48th in the nation.  

Overriding the Limit. Arizona’s constitution allows school districts only one option to avoid budget cuts – a one-time override that must be passed, not by voters, but by the state legislature, and not by a simple majority but by two-thirds of both chambers. Should this override approval not occur by the March 1 deadline, districts will be directed to reduce their budgets to keep within the limit and submit a revised budget in April.  

To make a permanent change to the limit, either the legislature would need to refer the issue to the voters or signatures would need to be collected to place the issue on the ballot at a future general election.  

 Options for a Permanent Fix to the Spending Limit. The only option to avoid districts having to cut their budgets in the middle of the school year is for the legislature to pass a one-time override. But Arizona needs a permanent fix to the current expenditure limit. Here are some options for a permanent fix: 

  • Reset the Base Year. If Arizona retains the Aggregate Spending Limit calculation, it needs to be based on what today’s public schools pay for – computers and technology, student safety, increased pay for teachers, and all other district staff. This option requires voter approval to amend the state constitution. 
  • Use the Weighted Student Count. Instead of using a student count that reflects just enrollment, a weighted student count would take into consideration the higher costs of providing education to students with special needs, small school districts, grade level, and English language learners. 
  • Expand the List of What is Exempt from the Limit. The school spending limit should not include spending linked to school or student characteristics, such as increases in the number of special education students, students with disabilities, or English language learners, or the mix between elementary and secondary students. 

Eliminate the Expenditure Limit Altogether. The K-12 aggregate spending limit was adopted at a time when major changes were being made to how the state’s public schools were to be funded. Concerns existed that these changes might result in significant tax increases. Today, we know that school spending is controlled in several ways. It increases to the per-student base-level spending formula are restricted to inflation or 2 percent, whichever is less, and are set each year by the legislature. Beginning in fiscal year 2025, these inflationary increases to base-level funding can be suspended or even reversed if inflation and employment growth do not exceed limits passed by voters or if K-12 education’s portion of the state general fund budget reaches 49 percent or more. Eliminating the expenditure limit does not mean eliminating all spending limits. 

Download the AEL one-pager PDF here

News you can use: CAA Priority Bills

Arizona’s state legislative session is in full swing. So far this session 1625 Bills, Memorials and Resolutions have been introduced for consideration.  Each year, Children’s Action Alliance selects bills a dozen or so bills that we give our top priority. They are introduced by both Republicans and Democrats and from all parts of the state. Some are bills we support, others we oppose. They cover a range of topics that impact children from birth until they reach adulthood. Our priorities are chosen based on several factors including (but not limited to) whether they align to our previously published Legislative Agenda, what we believe might actually gain traction, the potential outcome or impact and most importantly- what the community and the evidence tell us is best for children.  These are by no means the only proposals we are working on. We just think they reflect an overall snapshot of what we think will help us reach our goal of an Arizona where all children and families thrive.  At the end of the session, we will score lawmakers on whether their priorities aligned to ours.  

Check out our bill tracking here.

National academic progress report is out - See how AZ students performed

As expected, the COVID pandemic had a significant impact on our nation’s children.  The National Assessment of Educational Progress (NAEP) recent report shows students' NAEP scores have decreased in math and reading competency.  Although Arizona students fared better overall than most states, their scores are still among the lowest in the country on student achievement. The NAEP assessment, administered in all 50 states and the District of Columbia, allows state-to-state comparison of academic performance. It was administered in 2019, and it shows how students performed before and after the COVID pandemic

Although scores in math have consistently increased since 1990, average mathematics scores for the nation in 2022 were lower by 5 points at the fourth-grade level and 8 points at the eighth-grade level.  Fortunately, they still remain higher than the baseline established in 1990, indicating that not all progress in math has been lost. The same cannot be said for reading competency.  Average reading scores nationally decreased by 3 points at both fourth- and eighth-grade levels -  wiping out ALL of the progress made since 1992. The good news is that Arizona’s children saw smaller declines than the national average in reading in both grades with under one-point decrease in reading scores.

Our state's good news should be tempered by the fact that only 31 percent of all children in Arizona scored at or above the proficient level in reading.  And students of color fared far worse on the reading assessment with Black students scoring 32 points and Hispanic students scoring 26 points lower than White students. Reading comprehension is connected to later success in school and higher school graduation rates.  Also, children who live in poverty are more likely to struggle with reading comprehension. Arizona has a long way to go to provide all children with the resources they need.  We must start now by addressing the looming spending limit (AEL) crisis facing Arizona’s public schools.

For more information on Arizona’s results please see the state profile here