The good news: More than two months into the fiscal year, the state
finally has a budget in place.
The bad news: The state is on track to spend about a billion dollars
more than it will bring in, according to the Joint Legislative Budget
Committee.
And it doesn’t appear as if lawmakers are in any rush to do anything
about it.
Tensions continue to run high between Gov. Jan Brewer and the
Capitol’s Republican leadership—so high, in fact, that GOP
lawmakers are balking at Brewer’s request to come back for another
special session to hammer out the billion-dollar problem that resulted
from her decision to veto portions of the budget the Republicans sent
her in August.
One major cause of heartburn: Brewer’s decision to reject a
permanent repeal of the state’s property tax, which had been suspended
for three years. The state property tax, which costs the owner of a
$200,000 home about $70 a year, brings in roughly $250 million
annually.
Brewer hasn’t completely given up on persuading lawmakers to back
her plan to ask voters to approve a temporary one-cent-per-dollar sales
tax to help Arizona through the next few years, which was opposed by a
handful of conservative Republicans in the Senate and the entire
Democratic caucus. But she is now talking about putting it on the
ballot through an initiative drive, which would delay the vote until
the November 2010 election. (See the week’s Skinny for details on the
weird politics of that option.)
In the meantime, Brewer vetoed enough of the GOP spending plan to
open a $464 million hole in the budget, mostly in the areas of
education and welfare spending.
Much remains up in the air. Major state agencies, such as the
Department of Education and the Department of Economic Security, are
essentially functioning under last year’s budget, although officials
are aware that future cuts are certain. Budget analysts are still
analyzing the impact to other state agencies, ranging from the Arizona
Lottery to the Department of Transportation.
Local nonprofit agencies that receive state dollars remain unsure
about what expect this year. Jim Murphy, CEO of the Pima Council on
Aging, says that his agency has been planning to absorb between
$150,000 and $550,000 in funding cuts.
As a result, the Pima Council on Aging is not accepting any new
clients for the home- and-community-based program.
“No more seniors or physically disabled adults are able to get in
the program to (receive) a warm meal or a bath twice a week,” says
Murphy.
Despite the uncertainty, a few winners and losers emerged from the
latest budget maneuvering.
THE WINNERS
• Developers: Thanks to a provision in a budget bill,
cities and towns will not be able to collect impact fees or change
building codes—to, say, require higher energy
efficiency—for two years. The law also prohibits any new state
regulations.
• K-12 Education: One of Brewer’s vetoes saved Arizona’s
schools from enacting cuts of $300 million. But it’s likely that
lawmakers will again cut those funds once they address the state’s
budget shortfall, pushing schools into the losers’ category.
• The Department of Economic Security: DES likewise
avoided $50 million in cuts, but Brewer warned that spending would be
reduced later this year, pushing the agency into the losers’
category.
• Cities and counties: Brewer’s vetoes prevented a
transfer of $22 million in vehicle-registration fees from city and
counties to school districts, as well as a transfer of $3 million from
Pima County to the state. But lawmakers are expected to revisit that
provision as well, pushing the counties into the losers’ category.
Speaking of the losers’ category: Counties will have to pick up 25
percent of the costs of housing sexually violent mentally ill patients
at the Arizona State Hospital. They’ll also have to cover a larger
percentage of the cost of restoring mentally ill defendants to
competency to stand trial.
• The Tucson City Council: Legislation creating a new
Rio Nuevo oversight board appointed by state lawmakers and Gov. Jan
Brewer was vetoed, so the current Rio Nuevo board—appointed by
the Tucson City Council and the South Tucson City Council—remains
in place. Expect lawmakers to take another shot at stripping the Tucson
City Council of control when they meet again.
LOSERS
• Middle-income families: Nearly 10,000 parents will be
losing their health insurance through KidsCare Parents, a program that
insures people who made too much money to qualify for AHCCCS.
• Working parents: DES now has the authority to raise
the threshold for parents to receive state-subsidized day care. Roughly
7,000 people are now on a waiting list for state help in affording a
spot in a day-care center.
• The mentally ill: The Department of Health Services is
expected to cut $16 million from programs for mentally ill people who
do not qualify for Medicaid.
• State prison employees: The state prison system is
being privatized, which means that state employees who work in the
facilities will be losing their jobs and associated benefits, including
their contributions to the state’s retirement program. Whether they
will get jobs with private prison operators remains to be seen, but
they’ll likely have reduced benefits if they do.
• Environmentalists: The State Parks Department is
planning on laying off 30 employees and cutting back on the hours that
parks are open. Meanwhile, Heritage Fund dollars will be taken from
state parks and used for fire-suppression efforts; cuts to the
Department of Environmental Quality will trim programs that monitor air
and water quality; and the state’s recycling program is gone.
• Domestic partners of state employers: A legal tweak
has eliminated the extension of health-care benefits for domestic
partners of state employees—gay and straight—that was put
into place under Gov. Janet Napolitano’s administration. Attorneys for
the state are studying whether the cutoff will be Oct. 1 or later.
• Science Foundation Arizona: Funding for science grants
was zeroed out.
This article appears in Sep 17-23, 2009.
