Frustrated GOP unveil new plan to balance state’s budget

By Howard Fischer
Capitol Media Services
Published/Last Modified on Tuesday, June 24, 2008 3:09 PM MDT


 PHOENIX — Frustrated by inability to negotiate a deal, House Republican leaders unveiled their own plan Monday to cut state spending by more than $500 million next year to make up a estimated $1.9 billion deficit.


 But the plan is likely dead on arrival at the Senate — if it can even get out of the House: Senate leaders are unveiling their own plan later today, one that reduces expenditures by only about $400 million.

 The trade-off, though, is the Senate plan borrows close to $900 million; House GOP leaders are willing to accept only about $50 million.

 But House Speaker Jim Weiers and his colleagues could find themselves outflanked. The Senate plan has the support not only of many of the majority Republicans but also the minority Democrats.

 In fact, several House Republicans, including Rep. Jennifer Burns, R-Tucson, have been actively involved in crafting the Senate package.

 Potentially more significant, the Senate proposal also includes many of the priorities necessary to get the signature of Gov. Janet Napolitano.

 Hanging in the balance is what services and programs will be trimmed — and whether state government and the university system will need to lay off employees.

 The more austere House budget includes

- $65 million reduction to be spread over the state’s three universities;

 - $84 million from the Department of Economic Security;

 - $80 million in cuts to the Arizona Health Care Cost Containment System;

 - $35 million from the Department of Health Services;

 - $10 million in savings by refusing to fund additional students in the community college system.

 It also would take nearly $400 million from other special accounts, drain the last $85 million from the state’s “rainy day’’ fund and reduce state aid to cities by about $18 million.

 Senate President Tim Bee, R-Tucson, and Senate Minority Leader Marsha Arzberger, D-Willcox, will provide details for the Senate alternative later today.

 There are some things where the plans converge.

 For example, there will be no cuts in basic state aid to education. That’s because lawmakers are constitutionally precluded from reducing funding and actually have to provide inflationary increases.

 But the state will save some money on public schools as enrollment growth has slowed. There is some anecdotal evidence that is because Arizona’s new employer sanctions law has resulted in some illegal immigrants and their families leaving the state.

 No cuts are expected in operating spending for either the Department of Corrections or the Department of Public Safety.

 There are, however, some significant differences.

 One point of contention is a provision in the House plan which would allow state agencies to freeze enrollment or change benefit levels of programs to meet their funding reductions. Some senators see this as a back-door way of reducing the ``Kids Care’’ program which provides nearly free health care to th children of the working poor.

 Weiers said it will be up to each agency to decide how to live within its new, reduced budget. And that, he said, could mean layoffs.

 ``We don’t know at this point if that’s going to take place,’’ he said. Weiers said that decision ``is for the people that are hired that are supposed to know what’s the best way to handle reductions.’’

 The idea of hiking taxes has never been seriously considered, at least in part because it would require a two-thirds vote.

 But lawmakers are looking at ways of raising more money, including a ``tax amnesty’’ program, encouraging people who have not paid what they owe to come forward now and avoid penalties.

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