DALLAS — Arizona’s drastic $1.1 billion of budget cuts approved last week could grow by nearly $1 billion if voters do not approve a temporary sales tax increase in May and refuse to repeal ballot initiatives from previous years.
The $8.9 billion spending plan approved Thursday partially closes a $2.6 billion shortfall for the fiscal year beginning July 1 with a one-cent sales tax increase over three years. It requires voters to rescind early childhood education and land conservation programs passed by initiative in 1998 and 2006. Ending the two programs would save $500 million, according to estimates.
If voters do not approve the sales tax hike, an additional $868 million in cuts would take place, including funds allotted to public schools.
Voting along party lines, the Republican-controlled House and Senate halted a health care program for 47,000 low-income children, removed 310,000 adults from state health coverage, and agreed to close most state parks.
Republican Gov. Jan Brewer has not said whether she will approve the 15 bills that make up the budget, but the sales tax increase is the key provision that she has demanded in a series of special sessions. This session would be the first to satisfy those demands.
“We have taken difficult action in the last 12 months — action that has impacted our citizens,” Brewer said in submitting her budget plan last month. “We imposed the largest spending reductions — $1.09 billion — in Arizona’s history, eliminated state services and programs, and reduced the state workforce by almost 10%. Yet despite our efforts to date, our job has just started.”
Democratic lawmakers said the “phony budget” threatens public safety by eliminating jobs for police and fire protection and weakens the economy by closing parks that attract tourists. They contend it will also prompt costly lawsuits by countermanding voter-approved initiatives and raising constitutional issues.
“Republicans’ failure to lead and create a balanced budget solution has just made tough times even tougher for Arizonans,” said House Democratic Leader David Lujan. “We are losing police officers off our streets and teachers from our classrooms, but they eagerly want to cut more. That’s not the right track.”
Republican leaders accused Democrats of playing politics instead of sharing in the decision making.
“Instead of choosing to do the hard and gritty work of creating their own budget, they chose to play politics,” said House Speaker Kirk Adams. “And, with that choice, they effectively marginalized themselves and play no part in solving the largest deficit in state history.”
Senate President Bob Burns, who joined in the criticism of Democrats, has acknowledged he is uneasy with the use of debt to solve some of the budget problems. Last month, the state, under a previously approved budget measure, raised $730 million from the sale of certificates of participation for the sale and leaseback of state buildings. Lawmakers also approved issuing $450 million of revenue bonds backed by lottery revenues to pay operating expenses.
“As our state suffers through this current budget crisis, much of the attention has been focused on shrinking revenues and program and agency cuts,” Burns said. “What people don’t seem to be talking about is our growing debt. Looking ahead to the next fiscal year, our state’s budget includes a general fund debt of $3.8 billion. The budget crisis is causing many lawmakers, myself included, to make decisions we hate to make.”
