PHOENIX — Gov. Janet Napolitano is proposing what she says is $214 million in savings to balance the state’s books this fiscal year.
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But the plan was all but pronounced dead on arrival two key Republican lawmakers.
“I see no cuts, no fixes,’’ said Rep. Russell Pearce, R-Mesa, after reviewing her plan. Pearce, who chairs the House Appropriations Committee. said it just defers the problems into next budget year, something he said makes no sense with projections already forecasting a $1.7 billion deficit.
And he said more borrowing is not the answer. “When you’re out of money, you can’t pay your bills, most people don’t go out and get another Visa card,’’ he said.
Sen. Bob Burns, R-Peoria, his Senate counterpart, said Arizona has a “structural deficit,’’ with the amount of spending authorized exceeding the money coming in. He said that was true even before the economy took a nosedive and Arizonans began spending less, reducing tax collections.
Finding a solution is being complicated by the fact that the Democratic governor and the GOP-controlled Legislature can’t even agree on the size of the problem: Burns said the real gap between revenues and expenses is $100 million more than Napolitano’s fix.
The pair will release their own plan today, one that doesn’t borrow for school construction and makes what Pearce said are permanent cuts in state spending. Legislative hearings are set to begin Tuesday.
The basic difference between the approaches is Napolitano’s belief the state’s financial problems, while severe, are transitory.
“This is a temporary dip in our economy,’’ she said. Napolitano said that is why she opposes permanent cuts, particularly i education and programs she believes are investments in the state’s future.
George Cunningham, the governor’s chief financial adviser, conceded part of Napolitano’s plan simply defers expenses.
For example, it eliminates $10.5 million for the design of new buildings for the biomedical campus in Phoenix being run jointly by the University of Arizona and Arizona State University.
But Cunningham said the universities would finance that with other cash. Then the cost of the design would be added to the bonds sold for construction, all of which has to be paid back eventually by the state.
Other elements include pushing back the date to send some inmates to prisons in Oklahoma, delaying the state’s 2-1-1 phone system that helps people find government services, and putting off implementation of a new law which requires DNA testing of al people arrested for certain serious crimes.
Cunningham said there are some real spending cuts in Napolitano’s plan, like taking $5 million from a fund lawmakers set aside fo scholarships for students to attend private in-state colleges. I also would reduce or eliminate tuition reimbursement programs fo state employees and slash a proposed system to allow publi school students to take classes without going to a classroom.
But Napolitano’s plan purposely leaves untouched some majo options legislative budget staffers said could help balance th books, like taking back nearly $30 million given to the state’ three universities to help retain faculty and students.
Gubernatorial press aide Jeanine L’Ecuyer said fulfills the governor’s pledge not to hurt education funding.
Similarly, Napolitano wants no spending cuts that would reduce cash for health care.
Even much of that $214 million Napolitano is billing as savings does not actually reduce the overall size of the state budget.
More than $128 million of that actually would come from takin cash from special state funds, money Cunningham said the agencies do not need, at least not this year — and possibly never.
That includes $24 million from the state’s Citizens Clean Election Commission. Cunningham said that agency, created by voter initiative to fund campaigns of candidates who don’t take private donations, has more than enough revenues from its shar of civil, criminal and traffic fines.
But Todd Lang, the commission’s executive director, said the governor’s financial figures aren’t correct. And Lang said the state constitution may bar the Legislature, which would have to approve the proposal, from raiding funds which have been approved by voters.
The GOP leaders agreed with Napolitano the state tap its $700 million rainy day fund. But Pearce questioned taking too much
from that account, pointing out the state is facing various
lawsuits over things like funding English learner programs, each
of which could cost more than $100 million.
“The rainy day fund ... is not for bad budgeting,’’ he said. “It
really is intended to fix those unintended liabilities, one-time
expenditures, to keep us from getting into serious trouble.’’
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Elements of the governor’s budget-balancing plan:
- spending reductions and deferrals — $75.5 million;
- transfer of money from special funds — $128.2 million;
- avoiding capital costs — $10.3 million;
- borrow for school construction — $393 million;
- money from rainy day fund — $263 million.
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Examples of spending reductions and deferrals
- reduce the number of Arizona inmates housed in Indiana —
$14.8 million;
- finance design costs for design of buildings biomedical campus
of ASU and UA instead of paying cash — $10.5 million;
- reduce funds for private postsecondary grants — $5 million;
- defer development of the call center for the state’s 2-1-1
system — $1.9 million;
- delay sending state inmates to prisons in Oklahoma — $1.6
million;
- delay DNA testing for people arrested for serious crimes —
$600,000.
- defer replacement of computer for state’s indigent health care
program — $500,000.
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