Legislative Update

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Arizona Capitol Times reporter Jim Small has the latest legislative news from the state capitol.

Ted Simons
>>> After weeks of waiting, Republicans have finally released a budget proposal for 2010. Here to tell us what's on it Is "Arizona Capitol Times" reporter Jim Small.

Ted Simons
>> Good to have you here.

Jim Small
>> Thank you.

Ted Simons
>> Alright the proposal, what is it showing?

Jim Small
>> It shows about $670 million or so in cuts, about a billion dollars in stimulus money for the upcoming fiscal year, which begins on July 1, and it takes about $400 million from dedicated funds, more fund sweeps that have been used the past couple of years to balance the budget deficits. The interesting thing, things that are drawing the most criticism are a couple of components to raise revenue without raising taxes. One of those would be to take excess funding given to school districts and lawmakers feel is being unused and to take that money and take it back from the school districts and get about $300 million that way. And another one would be cities collect impact fees when new development goes up, when homes are built, when construction is completed to pay for infrastructure needs and not all of that money is spent. There is extra money lying around there and some lawmakers want to take that money as well.

Ted Simons
>> Start with education. Along with, what, $280 some odd million in cuts, they want $300 some in savings that schools had saved for times like these?

Jim Small
>> That's one of the arguments that school districts and advocacy groups are saying. We saved this up for a rainy day. Saved it to be responsible for our budgeting, make large cash expenditures on projects instead of financing them and have it cost more in the long run. There is an argument that that penalizes those who were more responsible with their money and handled their budgeting better and those who spent every last dime that they had, spent down to the last penny, well, they don't get really hurt in this because they don't have money to get taken away.

Ted Simons
>> Is it legal?

Jim Small
>> Well, it seems like it is going to be legal. I think the rules attorneys in the house and Senate have signed off on it. And, you know, there is a way to do it. I think that basically the way that they would do it is, I don't know if they can directly sweep that money right in the general fund, but they might reduce the amount of state aid, funding that goes to school and say, okay, we are going to take the strings off this other money and allow you to go ahead and use it. We take an extra $300 million, but we will free up $300 million that you can use.

Ted Simons
>> City and town argument, idea that these are supposed to be developer impact fees. Can you move that money around any way you choose or is it supposed to go to infrastructure?

Jim Small
>> It is supposed to go to infrastructure, delineates what kinds of projects to be paid for with this. In certain cases, how much impact fees has to go for certain things, formulas on the books that say how much money has to go for certain projects. The idea is to somehow get this money, about $210 million was the estimate in the budget proposal, and, you know, there is -- a lot of this money has been collected, and lawmakers are looking at it and saying well, it's not all spent. It is sitting there. Even if it is pledged to be spent down the road in five or six years, there is no contract with it. It is money we can use in the short term to balance the budget. Cities came out and said you can't do this. This will hurt us, we need this for waste water treatment plants, roads, sewer, fire hydrants, things like that. And there is a spat going on behind the scenes at the capitol, house republicans are pushing this idea, and a lot of talk that the league of cities and towns, the main lobbying group for cities, was in negotiations with republicans. The league says that wasn't the case. We are trying to sort out exactly what happened. All anyone knows is that this thing came out and it seems like it has blown up, at least publicly.

Ted Simons
>> Quickly, before I let you go, it seems to me like the state is saying we will do anything not to raise taxes, including sweeping things from city and towns who as a result may have to raise their own taxes.

Jim Small
>> And that is one of the arguments against both of the items we are talking about, the schools as well. If you take this money from schools on top of the other cuts they're facing, they made to raise their property taxes.

Ted Simons
>> We will see where it goes. Always good stuff. Thank you for joining us. Appreciate it.

Jim Small
>> Thanks for having me, Ted.

Jim Small:Arizona Capitol Times;

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