KNAU and Arizona News
3:32 pm
Wed February 3, 2010

State lawmakers move to deal with current and future budget deficits

Phoenix, AZ – The package approved Tuesday by the Senate includes asking voters
to hike the state sales tax by a penny for three years. But that
vote won't occur until May -- meaning even if it's approved it
won't help the finances this fiscal year which ends June 30. What
the plan does include for this year includes borrowing -- a lot
of it -- $450 million against future proceeds from the Arizona
Lottery over 20 years and selling off another $300 million in
state buildings and leasing them back from the owners. That
annoyed Sen. Ron Gould who said the move is not only ill
conceived but unconstitutional.

(We just seem to want to play Jedi mind tricks around here and
just call things other things to confuse people to get around the
provisions of the constitution or to get around what the voters
have decided to do.)

That's not the only borrowing. The plan calls for delaying $350
million owed this spring to public schools until August, and $100
million due universities into September. Senate President Bob
Burns acknowledged they simply push the problem off into the
future for a one time fix.

(Well, I wouldn't put it in the good, fiscally responsible plan
category. I think that there are things we should do, things we
want to do. But it all comes down to what we can do.)

Burns said this package was the only thing that could get the
necessary votes for Senate approval. While the proposed tax hike
won't help this year's budget, supporters say it is an important
part of dealing with the fact that the recession -- and the sharp
drop in tax collections -- is going to create deficits for years
to come. If voters approve the levy it would generate close to
$950 million this coming budget year and more than $1 billion by
the third year. Sen. Ken Cheuvront supported the plan.

(I think if you look we have very few options. If we do not allow
the people of Arizona to make a decision on whether they want to
raise revenues to pay for vital programs, we will be having to
cut those vital programs that are so important to many of us.)

But other lawmakers disagreed, with reasons ranging from concerns
about taking money out of the private sector to questions of
whether the tax hike will really prevent future cuts. In separate
action Tuesday, the Senate Appropriations Committee agreed to ask
voters to cap future state spending at no more than 6.4 percent
of the total personal income of everyone in the state. The
current limit, originally approved by voters in 1980, is now
slightly more than 7.4 percent. Sen. Russell Pearce said the
experience of the last few years proves that is insufficient. He
said that state budgets from 1998 through 2005 all fit within
that proposed 6.4 percent limit. It was only when tax collections
were booming that lawmakers and the governor started a whole
bunch of new or expanded programs, pushing spending up above 6.9
percent. It now has dropped back to the 6.1 percent range. Pearce
said it needs to stay close to that.

(This bill would not shrink state government as a share of the
state economy. Rather it will simply keep the state government
from taking larger and larger share of the state economy.)

The Appropriations Committee also approved another measure to
repeal a 1998 constitutional amendment which keeps lawmakers from
trimming or eliminating programs voters have said they want.
Supporters say that more than a third of the budget is now off
limits, with much of that tied to voter-mandated formulas for
education and free health care. But Sen. Paula Aboud said she
doubts that voters, who would have to approve this change as well
as the new spending cap, would be willing to go along.

(I think the public does not trust the way this Legislature will
allocate dollars. It's given tax cuts to the wealthy. Sometimes
the Legislature has a different priority than the citizens do.)

She said initiatives are the way voters say what are their
priorities regardless of what lawmakers think. For Arizona Public
Radio this is Howard Fischer.