Arizona finds itself with an unexpected budget surplus of over a quarter billion dollars and lawmakers are already battling over what to do with the excess funds.

At the start of budget planning, lawmakers in the Legislature had projected a $132 million deficit. But instead of being in the red, the current year budget shows the state decidedly in the black, with a surplus of about $266 million.

Higher than expected revenue from income tax collections and capital gains are to thank for the good fortune.

Democratic Minority Whip Eric Meyer of Scottsdale wants the unexpected windfall used to pay teachers.

“It’s time to realize that if we want the state to be successfully economically, we need to educate our kids. The census came out showing that we pay our teachers the least of any state in the country," Meyer said.

But GOP leaders in the Legislature may have other ideas.

Senate President Andy Biggs of Gilbert warns against calling it a “surplus,” instead referring to it as a one-time event.

“Nothing’s off the table. I just think you have to be wise as you look at this. I mean, my friends across the aisle are unnecessarily giddy," Biggs said. "They’ve forgotten to look at the overall budget picture. We are still in a structural deficit.”

Biggs and fellow Republicans say debt reduction should still be a priority and that it’s premature to earmark the funds for any specific causes.