On Friday, June 25th, the Arizona House of Representatives wrapped up work on a $12.8 billion budget that dramatically overhauls the state’s income tax code shielding wealthy Arizonans from paying the voter-approved tax in Prop 208 to boost teacher pay and mandates new civics curriculum in public schools.

This legislative session will be remembered for the missed opportunities despite record revenue thanks to federal dollars that were appropriated to Arizona to fight COVID-19 and the passage of a skinny budget last year, legislators faced a more than billion-dollar revenue surplus.

Budget Outcome

This record amount of revenue could have been allocated to reduce the state debt, buy back the buildings at the Capitol that were sold during the economic downturn in 2010. They also could have used the funds for unfunded or underfunded public needs and programs like covering oral health for pregnant Medicaid members.

They also refused to make a $12M investment in KidsCare even though the federal matching funds would have insured an additional 30,000 Arizona kids in a state that has one of the highest rates of uninsured children in the nation. There were no provider increases for caregivers for persons with developmental disabilities.

Here are the highlights of the specific state agency budgets:

AHCCCS

  • Adds a footnote requiring AHCCCS to report to the JLBC by September 30, 2022 on its progress in implementing services specified in the housing and health opportunities section 1115 waiver amendment.

  • Adds a footnote stating that $60 million in Expenditure Authority reverts from the Supported Housing line item in the event AHCCCS doesn’t receive federal approval for its housing and health opportunities section 1115 waiver amendment.

  • Adjusts the baseline by $228.3 M due to increase FMAP allocations

  • Adds $3.0 M for IT Operating Funds for each of the next 3 years

  • Allocates $6.0 M for GME in FY 22 with $6 M dedicated to Rural GME & $1.3 M dedicated to Urban GME and $9.0 M in FY 23 & FY 24

  • Increases for Elderly/Physically Disabled Providers with $13.3M with $7.0 M for SNF for FY 22, F& 23 & FY 24

  • Adds $60.0 M in Expenditure Authority for Supported Housing if the Section 1115 waiver is approved.

  • Provides $200,000 for SMI Housing Administration & requires report by members served & on waiting list for services

  • Shifts Prescription Drug Rebate Fund ($16.7 M) for FY 22, FY 23 & FY 24 while adding $16.7 M from Prescription Drug Rebate Fund

  • Adds funding of $.5 M in FY 23 with an increase to $.6 M in FY 23 and the $.8 M in FY 24 for Newborn Screening

  • Sets aside $6.0 for Opioid Treatment in FY 22

  • Adds 1 time fund from Prescription Drug Rebate Fund $78,000 (OF) for ‘PMMS Roadmap’

Department of Economic Security:

  • Adds $1.0 M for FY 22 – FY 24 for Area Agencies on Aging Providers

  • Allocates $15.4 M for FY 22, FY 223 & FY 24 for DD Providers (Reallocates $15.0 M of the base funding) as well as allocates $5.1 M for DDD state funding Long Term Care Costs

  • Provides $1.0 M in Homeless Youth Funding to start in FY 24

  • Adds a 5% Salary increase for 4,900 FTEs for $2.3 M for FY 22, FY 23 & FY 24

  • Provides 1-time funding $.5 M for FY 22 for After School/Summer Youth Program Funding as well exempts from non-lapsing

  • Sets aside in FY 22 $1.0 M for the State Long-Term Care Ombudsman as ongoing

  • Establishes a Sexual Violence Services Fund by adding $8.0 M

  • Adds to the baseline $14.5 M (TANF) due to Pandemic Assistance

  • Enhances the baseline by adding to the baseline $1.6 M for the Child Care Development Grant

  • Adds $1.0 B for Child Care Development Fund due to the ARP with these funds designated as non-lapsing

Arizona Department of Health Services:

  • Provides $1.6 M for 16 FTEs for FY 22, FY 23 & FY 24 for Long Term Care Surveyors

  • Adds $250,000 for additional High Risk Perinatal visit for FY 22, FY 23 & FY 24 as well as allots $5.8 M using Prop 108 funds for the additional screening tests

  • Adds $100,000 for expanding Child Fatality Review Team

  • Allocates $1.0 M for funding for Alzheimer’s Research in FY 22, FY 23 & FY 24

  • Allocates $1.0 M for adoption/birth certificate records

  • Earmarks $100,000 for 1 time funding FY 22 & FY 23 for Homeless Pregnant Women Services by using Health Services Lottery Fund

  • Sets aside $1.5 M in FY 22 & FY 23 for ‘Family Health Pilot Program’ with program for parents under 2 with restrictions on referrals for abortion

  • Reduces ER Medical Services Fund by $1.9 M by replacing with Prop 207 (marijuana) Funds

  • Require DHS to add Spinal Muscular Atrophy and X-Linked Adrenoleukodystrophy to the newborn screening panel by December 30, 2021. Require all congenital disorders that are included on the HHS Recommended Uniform Screening Panel to be added by December 31, 2023.

Budget Reconciliation Bills

Each year the legislature throws bills that had little support in committee or that were controversial into what are called BRB’s which is short for Budget Reconciliation Bills. This year there were some doozies. I’ll cover a few of them here before moving on to the regular bills that passed.

Governor Ducey and Director Christ have issued many harmful executive orders over the last few months using their emergency authority that I have covered extensively earlier. Recognizing that their authority may wane at some point, they made sure to include several of their harmful orders into law (using BRB’s). Below are a few:

SB 1819 Prohibits a county, city or town from making or issuing any order, rule, ordinance or regulation related to mitigating the COVID-19 pandemic that impacts private businesses, schools, churches or other private entities, including an order, rule, ordinance or regulation that mandates the use of face coverings, requires closing a business or imposes a curfew.

In addition, Ducey & Christ ensured that school districts can’t  require masks this fall (even elementary school students – who will not qualify for the vaccine by fall). They were able to insert this language into the K-12 budget bill – HB 2898:

15-342.05. Face coverings; requirement prohibition

A school district governing board may not require the use of face coverings by students or staff…  

Likewise, they locked in their executive order restrictions on university and community college COVID intervention strategies by inserting the following language into the higher education BRB (HB 2897):

15-1650.05. COVID-19 vaccine; face covering; testing

A public university or a community college may not require that a student obtain a COVID-19 vaccine or place any conditions on attendance or participation in classes including mandatory testing or face covering usage.

They also included SB 1819 in the budget bills, which puts substantial limitations on the ability of  a future  governor and a health director to declare a public health emergency.

  • Caps the next governor’s initial public health state of emergency at 30 days (beginning 1/2/23 – their last day in office).

  • Allows the next governor to extend a public health emergency for up to 120 days and prohibits subsequent extensions to 30 days.

  • Terminates a public health emergency after 120 days unless extended by the Legislature.

  • Allows the Legislature to extend the state of emergency, limiting extensions to 30 days.

Regular Bills

There were actually some good bills that came out of this legislative session. Here are a few of the highlights with a link to the actual bills:

Senate Bills

  • SB1250 – Legalizes overdose and disease prevention programs (i.e., syringe access programs) in Arizona.

  • SB1301 – Establishes a sixth Area Health Education Center at the University of Arizona that is specific to developing a workforce pipeline for Indian health care delivery.

  • SB1376 – Requires mental health lessons be included in K-12 health education curricula.

  • SB1486 – Legalizes fentanyl strips (possessing them was a felony)

  • SB1695 – Requires health insurers to cover single-tablet antiretroviral therapies without step therapy and prior authorization.

  • SB 1839 Phases out the Psychiatric Security Review Board and moves those responsibilities to the juducual branch. Audit showing PSRB is crappy Arizona Psychiatric Security Review Board (azauditor.gov)

  • SB1851 Outlines information that must be included in the Arizona State Hospital (ASH) financial and programmatic report. Establishes the Joint Legislative Psychiatric Hospital Review Council.

  • SB1847 Distributes $15M in excess funds from the Medical Marijuana Fund for the following purposes:

  • $5M to the county public health departments to address public health issues related to drug addiction and incarceration;

    1. $2M to the Institute for Mental Health Research for research to improve mental health services, research and education;

    2. $2M to the Primary Care Provider Loan Repayment Program & the Rural Private Primary Care Provider Loan Repayment Program (prioritizing providers in behavioral health);

    3. $2M to the Board of Medical Student Loans with a focus on psychiatry or other areas of practice;

    4. $1.25M to ADHS for suicide prevention;

    5. $1.25M to the AHCCCS for suicide prevention;

    6. $1M for the health care directives registry; and

    7. $250K to the ADHS’ Arizona Biomedical Research Commission for research the correlation between marijuana use and mental illness.

House Bills

  • HB2142 & SB1150 – Appropriates $1MM to develop a 2-year Agriculture Workforce Program at the Uof A Cooperative Extension to reimburse food-producing agricultural organizations for the costs of hiring apprentices.

  • HB2392 – Establishes separate GME program for health centers to encourage providers to practice in rural and underserved communities.

  • HB2454 – Requires telehealth services to be paid at the same rate as services provided in-person. Includes audio-only payment parity for behavioral health and substance abuse services.

  • HB2489 – Appropriates $4M to the housing trust fund. Amount is likely to be cut significantly as the bill moves forward. HB2562 and SB1327 – Establishes an affordable housing tax credit that is equal to at least 50% of the federal low-income housing tax credit for investments in qualifying rental housing.

 

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