Legislative Update

Feb. 25, 2009

Transcript:

Ted Simons:
Good evening, and welcome to "Horizon." I'm Ted Simons. This week at the state capitol, Democrats released their own budget proposal. And a plan to cut property taxes cleared a house committee. This as state lawmakers size up the state's share of the federal stimulus money. Here with the latest legislative news is Arizona Capitol Times reporter, Jim Small. Jim, good to see you back. Thanks for joining us.

Jim Small:
Thanks for having me, Ted.

Ted Simons:
Before we get to all that other stuff, it sounds like today the governor kind of went off a little bit on legislative leadership. What was this all about?

Jim Small:
She was reacting to comments earlier in the week primarily from senate Republican leaders who questioned some of the cuts that agency heads have released in the past couple of weeks since the budget fix was approved. You know, agencies like ACCESS, DES, the Department of Health Services. They've announced a large number of layoffs. Thousands of workers and lots of furloughs and programs being cut wholesale. The agency directors were given control over the budget. You know, the legislature said okay, you need to cut x number of million of dollars out of your budget, you know your programs best so we'll let you do it. We need to act quickly. We'll let you go ahead and take care of the program. Well, they did it, and now a number of republican lawmakers are saying, why did you cut these programs? We think you did it merely to get support for no more cuts in the future, and that it was politically motivated. Governor Brewer came out and said the agency directors did what they needed to do. What did Republican lawmakers expect? They passed millions of dollars in state agency cuts. You're going to lose some programs, you're going to lose some employees. You know, the agencies acted not politically but in the best interests of the budget.

Ted Simons:
And this is the governor, in the end, defending the agency heads she put in place.

Jim Small:
Absolutely. Some are them are interim heads and some of them are people she's put in permanently and she's defending the budget that she signed as well. And I think this kind of -- it's part of the natural tension you get between an executive branch and the legislative branch. There's always that check and balance, and I think this is part of that.

Ted Simons:
And we also have another round of budget cuts on the way, correct? What are you hearing down there?

Jim Small:
Right now, lawmakers are trying to put together a budget proposal for the upcoming budget year. They're hearing from agencies still. Really, the big news has been the federal stimulus plan and finding out what's involved, how much Arizona's going to get, and really what strings are attached and how that plays into developing the budget.

Ted Simons:
Are we getting more information on that?

Jim Small:
The total the state's going to be getting is about $4.2 billion. About @2.2 or $2.3 billion of that looks like it's going to be direct aid to address budget shortfalls. There's a lot of discretion in terms of how they want to break that up, whether they want to go back and backfill some cuts they just made or whether they want to use -- the fix they just passed isn't going to hold up. Possibly a $400 million shortfall again this year and certainly take some forward into next year.

Ted Simons:
Democrats come out with their own budget plan, as far as bridging a $3 billion deficit and it sounds like no cuts?

Jim Small:
Yes, the Senate Democrats yesterday held a press conference and announced their budget options or strategies and it was a page-long list of things. It involved everything from securitizing and selling off lottery revenue, future lottery revenue, doing the same with prison buildings, deferring payments to ACCESS, DES, to universities to the tune of hundreds of millions of dollars. Which basically means rolling it over and not making the payment in June, making it on July 2nd and moving it from one fiscal year to the next. The only cuts really in the proposal were keeping the $580 million in cuts approved three weeks ago. That was it. There were no new additional cuts, so the media pressed them on it and said, so you guys have a $9 billion budget and a $3 billion hole and couldn't find any other room for cuts? And they said, no, not really, the only thing they really threw out there was taking money away from Joe Arpaio.

Ted Simons:
Is this even going to be considered?

Jim Small:
I imagine there will be some Republican lawmakers who look at the individual items, but by and large, the Republicans don't need to. They've got solid majorities in the House and Senate, and they've got a Republican governor on the 9th floor.

Ted Simons:
We've got Republican lawmakers looking at big tax cuts for businesses and also looking at permanent repeal of the state property tax. Those two things cruising right along?

Jim Small:
Yeah, the big thing was the permanent repeal of the state property tax. It was suspended three years ago, and it's due to come back on the books if the legislature doesn't act and Republicans have made it a top priority. They're going to try and get it permanently repealed. That's about $257 million this year. And it's aimed at homeowners and businesses. Democrats have criticized it and said it only helps special interest, large businesses like utilities and doesn't help homeowners, only about $3 or $5 a month and it makes the problem worse. You've got a $3 billion deficit, and if you take $250 million away, you're even further in the hole.

Ted Simons:
Real quickly, the Governor, who has floated the idea of a tax increase, at least taking it to a public vote, is she making noises about this permanent repeal?

Jim Small:
We haven't heard a whole lot. I imagine she'll sign it, that's certainly the hope from legislative leaders who said they've talked to her office. They're confident she'll sign it.

Ted Simons:
All right. Jim, thanks for joining us. We appreciate it.

Jim Small:
Thanks, Ted.