Wed, Oct. 16

GOP leadership forges ahead on budget despite veto threat by governor

PHOENIX -- Ignoring a threatened veto, Republican legislative leaders are pushing ahead with their own budget plans.

Senate President Bob Burns, R-Peoria, said Tuesday he hopes for final action in his chamber Wednesday. That package includes nearly $650 million in new spending cuts on top of nearly $600 million taken from the budget just three months ago.

A House vote is tentatively scheduled for Thursday.

The planned votes come even though some key elements of what legislative Republicans want to do directly conflicts with the proposal unveiled Monday by Gov. Jan Brewer.

Most notably, lawmakers continue to ignore the governor's demand for a temporary 1-cent hike in the state's 5.6 percent sales tax rate. Brewer said the levy, which she believes could generate $1 million a year for three years, is necessary to prevent "devastation' to Arizona.

And House Speaker Kirk Adams, R-Mesa, said there also are not the votes for Brewer's proposal to temporarily restore at least part of the state property tax, a move that would generate another $165 million a year.

Cutting state spending is only part of the way the legislative GOP plan makes up for the decision not to hike taxes. Lawmakers also plan to shift $95 million of school costs to cities, something Brewer has condemned as unacceptable.

They also plan to contract out operation of some state prisons to private companies, counting on those firms to give the state $100 million up front. And what isn't privatized would be sold off and leased back -- essentially mortgaged -- with the idea of getting $495 million in immediate cash.

Burns and Adams said they are lining up the necessary votes for approval. But getting all that enacted into law is another matter.

Brewer dismissed the package as unacceptable, saying hers is the only "sensible plan for a balanced budget.'

"I will not sign a budget that incorporates unrealistic spending cuts, excessive gimmicks or phony revenue projections,' the governor wrote when she unveiled her budget proposal Monday. "I will not sign a budget that, in the interests of expediency, dims Arizona's future.'

Burns minimized the governor's threat

"We'll deal with that,' he said. "We'll have to just do what we can do here at our level and see what we can work out with her when we get to that point.'

Adams said he remains optimistic that Brewer will back down from her demand for higher taxes.

"I believe there's a way we can do this that will satisfy the concerns of the governor,' he said. "There's far more that we agree on than we disagree on.'

Burns said the tax hike Brewer wants is only part of the problem.

He said the governor's detailed budget plan, given to lawmakers only on Monday, comes just a little too late.

He wants to proceed with "the budget we've been working on for months.' And Burns said he has no intention of slowing up now to try to incorporate some of what the governor wants into that plan.

Gubernatorial press aide Paul Senseman acknowledged that Brewer, who became governor in January after Democrat Janet Napolitano resigned, has been slow to actually put her own plan on the table.

But Senseman said that Brewer, who served as a state lawmaker for 14 years, was trying to be "respectful of the legislative process' and willing to use their plan as a starting point.

Senseman said only when it got to be June -- with the new fiscal year beginning now in less than a month -- did Brewer decide she needed to tell lawmakers exactly what she finds acceptable.

There are items in the governor's plan that probably could get Republican support.

For example, she wants to put several measures approved by voters in the last decade back on the ballot to see if Arizonans still want them -- and want them enough to raise new taxes to pay for them. That would include the 2000 measure which requires the state to increase aid to schools each year to account for inflation, and a 2004 initiative which requires the state to provide free health care to anyone below the federal poverty level.

There also is likely support for a proposal by Brewer to lower the corporate income tax rate from nearly 7 percent now to 4.5 percent, though the governor wants to put that off until 2012.

Similarly, Brewer also wants further reductions in property tax assessments on business property, a move that would shift some of the local tax burden to homeowners.

Brewer is not relying solely on the sales tax hike and temporary partial restoration of the state property tax to balance the budget. Aside from some spending cuts, the governor has proposed more than $750 million in short-and long-term borrowing, including getting investors to give the state money now in exchange for $45 million a year for the next decade in anticipated lottery sales.

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