The worst thing that could have happened to the Republicans’ conservative approach to state finances is a nearly $1 billion surplus.
But that’s exactly what the GOP-controlled Legislature faces as it looks to stay true to its core values and prevent spending from spiraling out of control.
State lawmakers are beginning to focus on this year’s budget and, for the first time in five years, there’s a large amount of extra cash in state coffers.
Committees in the House and Senate have already agreed to funding requests for operating budgets of all state agencies. Those add up to nearly $9 billion.
But now, the real work on the state budget is just beginning: How to carve up an $802 million surplus that is estimated to grow to nearly $1 billion as state revenue from sales and income taxes continues to exceed expectations.
The already-heated legislative session could get hotter as lawmakers work through major differences between their budget proposals and Gov. Janet Napolitano’s.
And with lawmakers gearing up to hit the campaign trail in an election year, the good financial times likely mean bitter political battles at the Capitol.
Rep. Russell Pearce, RMesa, who leads the House Appropriations Committee, says that while it’s better for the state to be awash with cash, it’s easier to put together a budget when there’s no money left on the table.
He notes that the surplus creates a different kind of problem for his GOP counterparts who traditionally look to reduce government spending.
Instead of looking where to cut, he said, some are looking where to spend. But Pearce vowed to guard the taxpayers’ money this year.
“I’ll have to keep reminding them this year that I’m the gatekeeper, not the gift-giver,” he said.
Among the issues most Republican lawmakers do agree on are tax cuts, transportation funding and money for border security.
They want at least $250 million in combined sales and property tax reductions. And some vow to push for more.
Sen. Dean Martin, RPhoenix, said some legislators are eyeing a possible tax-cut package of nearly half a billion dollars.
Republicans also are committed to spending $100 million on border security and repaying $118 million to the vehicle license tax fund, which helps fund highway projects.
But the major political fireworks are expected to come when the governor and Legislature try to agree on a budget.
The preliminary budget put together by the Joint Legislative Budget Committee and adopted by the legislative committees, has omitted many of the governor’s top priorities.
Jeanine L’Ecuyer, a spokeswoman for Napolitano, said some of the governor’s key items, such as teacher pay raises, health care and voluntary full-day kindergarten, have not been addressed at all.
“It’s reasonable to think if the Legislature wants to play games with the budget that a veto could happen,” said L’Ecuyer.
Budget priorities for the GOP-controlled Legislature
• $250 million to $500 million for a combination of property and income tax cuts
• $118 million to repay the vehicle license tax fund used to help fund highway projects
• $100 million for an illegal immigration package to help secure the border with Mexico
• $200 million toward repealing accounting maneuvers — such as the June estimated sales tax — used by past Legislatures to balance the budget
• $105 million for Arizona State University Polytechnic in east Mesa