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State government will have as much as $240 million more available in its budget annually as "ongoing revenue," the Joint Legislative Advisory Committee forecast Thursday.
The committee's staff and its Financial Advisory Committee issued their required October report at the state Capitol, confirming that the state ended last fiscal year June 30 with a surplus of $378 million.
"Based on JLBC staff analysis and input by the Finance Advisory Committee, $240 million of the $378 million is expected to be available as ongoing revenue," the report's summary said.
It cautioned financial projections are subject to unforeseen changes, using the current overage as an example, because it is much higher than the predicted finish to the fiscal year.
"The higher-than-expected FY 2015 revenue results again demonstrate the challenge of forecasting collections with any degree of certainty, especially given the unpredictable nature of state, national and international events," the summary said.
Forecasts last spring had the state facing a deficit for the next two years, leading Gov. Doug Ducey and legislative Republicans to make big budget cuts in higher education and social programs.
Thursday's report issued what was tantamount to an admonition about the surplus from last fiscal year.
" ... dedicating most of the balance to permanent spending increases and/or tax reductions would likely create both a significant cash and structural problem" within two years, it said.
Ducey and legislators have been under pressure since they passed the budget to find more money for K-12 education, driven by what were small increases in spending and national reports ranking Arizona at the bottom in per-student spending and teacher pay.
Among proposals for funding education is one from Superintendent of Public Instruction Diane Douglas for $400 million more to improve teacher pay and recruit more teachers, with the money coming from surplus state revenues.
Legislators on both sides of the aisle also have called for using some of the state's surplus money to increase school funding.
Ducey has proposed changing the state Constitution to allow bigger payouts over 10 years from the state's land trust fund.
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