Arizona House OKs Republican budget plan - East Valley Tribune: Politics

Arizona House OKs Republican budget plan

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Posted: Friday, April 1, 2011 9:24 am

Public schools will have about $183 million less in state aid next year than they do now under the terms of a deal approved early Friday morning by the House to balance an $8.3 billion budget.

The plan, negotiated between Gov. Jan Brewer and Republican legislative leaders, also will result in larger cuts in state funding to the three universities than the governor had initially proposed. And community colleges will, on average, lose more than half of their state aid.

Friday morning’s 40-19 House vote on the main spending bill was strictly along party lines. A Senate vote on the package was set for later that day.

Other key elements of the deal to make up a $1.1 billion deficit include:

• $73 million in cuts to the community colleges.

• Requiring the five largest counties to bear some of the cost of running the Motor Vehicle Division.

• Imposing a waiting period before state workers, including new lawmakers, to get benefits like health insurance.

And the state is shifting a portion of its contribution to pension plans onto state and university workers, a move that will result in lower take-home pay.

But the big savings — about $511 million — would come by scaling back the Arizona Health Care Cost Containment System, the state’s Medicaid program.

House Speaker Kirk Adams, R-Mesa, said it was necessary to cut more from education than the governor proposed because her budget plan for next year was not truly balanced. Instead, he said, it relied on some borrowing and accounting maneuvers. That, he said, was unacceptable to all the members of the GOP caucus.

The result was that Brewer, who campaigned last year for a temporary tax hike to protect state aid to education, could not get the votes for her plan to cut K-12 funding by a figure he put at only about $80 million. Instead, the cut in state aid is about $183 million, but with about $50 million of that made up through federal dollars.

“This whole process is the result of a negotiated process,’’ Brewer told Capitol Media Services. And she said no one is ever happy with cuts to public education.

“But the bottom line is I have really held the line,’’ she said. The governor also said she never claimed that passage of that one-cent sales tax hike “was going to be a cure-all.’’

And Brewer noted the Senate had sought to cut K-12 funding by close to $250 million.

Jennifer Laredo, lobbyist for the Arizona Education Association, told the House Appropriations Committee the state already has one of the highest ratios of students to teachers. She said further cuts will only make things worse.

“And no matter how well-qualified and amazing the teacher is in front of the room, it’s going to be simply a situation where we’re not going to be doing the best job that we should be able to be doing,’’ she said.

Adams, however, said the cuts amounted to just 3.6 percent of all the funds available to public schools. “This is not a decimation of public education,’’ he said.

The spending deal also will trim state aid to universities by $198 million, $28 million more than Brewer proposed in January. How that will affect costs for students remains unclear.

The Board of Regents initially told school officials they should absorb about $100 million of those cuts by reducing costs, making up the balance with higher tuition. Based on that, each school came up with a plan that will be reviewed by the regents next week.

At the University of Arizona, for example, President Robert Shelton proposed a $1,790 hike in resident tuition, a 22 percent increase. Now, with the UA absorbing another $10 million in cuts, the Regents will have to decide how much should be passed along to students.

The plan will cut state aid to all Arizona State University campuses by $90 million, with a $30 million cut to Northern Arizona University.

“I fought hard for the universities,’’ Brewer said. Here, too, she noted, that $198 million funding reduction is less than the $235 million the Senate approved.

House Minority Leader Chad Campbell, D-Phoenix, said there was an alternative to all this cutting: Revamp the state sales tax system so that all transactions are subject to the levy, not just the sale of goods. He argued that more money could be raised even if the rate — currently 6.6 percent with that temporary 1-cent levy — were reduced.

Rep. John Kavanagh, R-Fountain Hills, said higher taxes are a non-starter among Republicans, particular with the economy trying to recover. But Campbell said some of the moves, like reducing state aid to community colleges and imposing new financial obligations on counties, essentially force them to hike taxes.

“When we sit down here and say to the voters of the state, ‘We’re not raising your taxes,’ I want the voters to know that is not an honest statement from us,’’ he said. “We’re being intellectually dishonest.’’

At a hearing on the deal late Thursday, a parade of witnesses each made a case for restoring funding for favored programs. That annoyed Rep. Vic Williams, R-Tucson.

“The taxpayers of Arizona are burdened with the cost of one out of every five people in our state being on welfare rolls,’’ he said. “At some point in time, we as a Legislature have to protect the people who are generating the tax revenues that provide for the services.’’

The final deal does not include a Senate-passed provision which would have made counties immediately bear the cost of housing anyone sentenced to state prison for less than a year. But the relief is only temporary: The plan simply delays that obligation until July 1, 2012.

Adams also defended taking money from only the five largest counties to balance the state budget. “There’s a big difference between Greenlee County and Maricopa County and the resources that they have and the infrastructure that they have in place,’’ he said.

Not everything in the new spending plan is a reduction from current levels. Brewer proposed — and lawmakers agreed — to increase funding for the state Department of Corrections.

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