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BUDGET BLUES

All that red ink at the Capitol sure is putting a damper on the most wonderful time of the year. It's a bummer to realize that as soon as we're done recycling our gift wrap, lawmakers are going to have to stomp on us with their cruel budget-cutting shoes.

The numbers through the first few months of the year paint a grim picture: A collapsing housing market plus a slowing economy equals a shortfall that could be somewhere in the neighborhood of $800 million in the current fiscal year. And that's not even getting into the budget that lawmakers will be crafting for next year.

Because some areas are off limits for various reasons (mostly related to protections established by voters through the initiative process), some of the choices that have been laid out by the staff of the Joint Legislative Budget Committee are stark.

Do all those low-income kids really need health insurance? Do universities really need all that money? Do we really need to widen freeways? Can't we cut back on some of that K-12 education funding?

Even some Republicans are less than enthusiastic about some of those ideas, although their options are limited, especially if they're reluctant to dip deeply into the state's rainy-day fund or borrow money for projects such as school construction, as Napolitano has suggested.

One thing that's not going to happen: a reversal of the hundreds of millions of dollars in income-tax cuts in recent years--even though the biggest payout went to Arizona's wealthiest residents, while the average earner got less than 50 cents a day.

Reversing--or even suspending--that tax cut would require the support of two-thirds of the Legislature, which is, simply put, politically impossible with this gang. When House Minority Leader Phil Lopes floated that idea in the morning daily a few weeks ago, even Napolitano said it was off the table.

Napolitano wants to dip into the state's rainy-day fund, borrow some money for school construction and make strategic cuts--so strategic, in fact, that she hasn't let us know what she's talking about yet.

The unhappy numbers are adding up to a contentious session. State Sen. Tim Bee might end up regretting his decision to stick out his term as Senate president rather than resigning to concentrate on his expected campaign against Congresswoman Gabrielle Giffords.


THE WRONG CUT

A few years back, when Gov. Janet Napolitano made her bargain to cut those aforementioned income-tax rates permanently while temporarily cutting property taxes, we thought she should have done exactly the opposite: Make the property-tax cuts permanent and provide a temporary rebate on income taxes.

Now the state is in a financial mess, and it won't be easy for lawmakers to extend those property-tax breaks. But if they don't, homeowners will see yet another property-tax jump in a year when the exemption expires.

That will add to the property-tax anxiety many people have been feeling as they've been watching their assessed values climb. Although some jurisdictions have at least tried to trim rates to compensate for rising values, others have not, which has meant that most people are paying more in property taxes every year.

Knowing that the state property tax is going to come back will just add momentum to various initiative efforts to freeze or roll back home values for taxing purposes, à la California's Prop 13. Already, three groups are gathering signatures for various ballot measures.

This is lousy policy, because over time, it totally skews the property-tax system, creating gigantic inequities based on when you bought your home rather than your home's actual value.

But it's also appealing to voters who are angry over property-tax hikes, which is why making the state's break permanent would have been the smarter move.


TOLL TALE

Rep. Andy Biggs, a Gilbert Republican, is now telling the press that he believes toll roads are the best way to fund highway construction.

Why? Well, the Legislature can't increase the gas tax, because so many Republicans have signed pledges or otherwise promised to never support raising taxes.

But guess what? The roads still cost money, and a gas tax that's not indexed to inflation loses value every year.

So now, instead of paying at the pump to raise money for a road, we're going to inconvenience drivers who will have to pay if they want to use a specific road.

We'd just as soon pay a gas tax.


SCRAMBLEWATCH '08: THE DOCTOR IS IN EDITION

State Rep. Linda Lopez is hitting her four-term limit in downtown/southside Legislative District 29, which has candidates circling the open seat.

The first to file was Daniel Patterson, formerly of the Center for Biological Diversity and now the southwest director of Public Employees for Environmental Responsibility. Patterson, who runs a left-leaning blog, is fiercely protective of the environment and fiscally weird and impractical. He has railed against the city of Tucson's monthly garbage fee and said that if he were elected mayor, he'd push for a 2 percent reduction in the area's sales tax. Patterson was one of the few voices in support of Proposition 200, the John Kromko-designed initiative that was rejected by 72 percent of city voters a couple of weeks back.

Now Matt Heinz, who unsuccessfully tried for a House seat in midtown Tucson's District 28 in 2006, has filed for a run in LD 29. Fresh out of med school and a practicing internist at Tucson Medical Center, Heinz is also active in an initiative effort to expand health-insurance coverage.

The other incumbent in LD 29, Tom Prezelski, is expected to run for re-election.

Elsewhere on the political front:

· Up in LD 26, which stretches from the Catalina Foothills through Oro Valley and into SaddleBrooke, Republican Al Melvin continues to lay the groundwork for a comeback. After beating incumbent Sen. Toni Hellon in the 2006 GOP primary, Melvin went on to lose to Democrat Charlene Pesquiera in the general election.

Melvin will likely face a primary challenge from Rep. Pete Hershberger, who is also hitting his term limit in the House. We expect Hershberger will put up a better fight than Hellon did. RINO vs. ultraconservative: Who will win? Place your bets now!

That leaves one House seat empty and another held by rookie Democrat Lena Saradnik--who is bouncing back from a minor stroke--in a district that leans Republican.

One sure Republican candidate is Trent Humphries, who blogs under the handle of Framer at Arizona Eighth, arizonaeighth.blogspot.com.

· In District 30, state Sen. Tim Bee appears to be exploring the possibility of a run for Congress next year.

Whatever Bee decides as a result of his experimental campaign, his Senate seat will be open. Rep. Jonathan Paton, who has proven to be the most quotable member of the Southern Arizona delegation, looks to be able to walk into that promotion.

Paton's seatmate, Rep. Marian McClure, is also hitting her term limit and considering a run for the Arizona Corporation Commission, which would leave two open House seats.

That has attracted five candidates:

· Sharon Collins, an aide to state schools chief Tom Horne, who has previously run unsuccessfully for the legislature, Secretary of State and mayor of Tucson.

· Frank Antenori, a former Green Beret who made his political debut with an unsuccessful run for Congress in CD 8 last year.

· Doug Sposito, a Sonoita-area developer who previously ran in LD 30.

· Wayne Peate, a doctor who was flirting with running the idea of running for Congress before lowering his sights.

· David Gowan, a knothead who has lost two previous efforts to win a House seat in LD 30.

More by Jim Nintzel

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