DALLAS - Arizona Gov. Jan Brewer yesterday left lawmakers guessing what she would do with the $8.4 billion budget that arrived on her desk a day late and almost a month after winning passage.
Climaxing an unusually bitter intra-party Republican showdown over how to close a $3 billion gap in the budget, lawmakers worked all night on the spending plan that was due Tuesday but delivered yesterday, the first day of the 2010 fiscal year.
Frustrated over lawmakers' refusal to send her the budget bills passed June 4 so that she could veto them and demand a compromise, Brewer sued the Legislature in the state Supreme Court two weeks ago.
The court ruled that the Legislature was in violation of the state constitution by withholding the bills from the GOP governor, but said it was powerless to do anything about it.
When the session passed midnight with the bills still in the Legislature's hands, Sen. Linda Lopez, D-Tucson, reminded Republican Senate President Bob Burns about the court's ruling.
"Even though we turned off the clocks, it is now past midnight, Mr. President, and you are now in violation of the court's order," she said.
Brewer, who now has 10 days to sign the bills, had made no comment about the budget yesterday afternoon, though she had earlier warned that the Legislature's version would bring sharp pain to the state's schools and neediest citizens.
The budget contains none of the compromises reached after weeks of negotiations between Republican legislative leaders and the governor.
To soften the cuts in state services, Brewer wanted a three-year, 1 percentage point hike in the sales tax to raise $1 billion.
Under a compromise, that increase would have been submitted to the voters. In exchange, the state would replace its graduated income tax with a flat tax in 2012. Neither measure made it into the budget.
With inaction threatening to extend into the new fiscal year, Brewer prepared for a partial shutdown of the government. But yesterday, the Arizona Department of Administration issued a statement that all state employees should report to work.
The budget bills combine federal funding, program cuts, borrowing, and accounting gimmicks to close a deficit that is the second worst in the nation on a percentage basis behind California.
The $3 billion gap could grow to $4 billion, according to the governor's office, representing nearly half of the $8.4 billion budget.
Republican lawmakers refused to budge on their opposition to tax hikes as tax revenue has fallen dramatically with Arizona's worsening economy. As the budget deadline neared yesterday, 38 lawmakers signed a pledge to not take any action that would raise taxes.
Suspension of a property tax for three years in 2006 has cost the state more than $200 million annually, and an income tax cut that same year reduced revenue by 10%, or $334 million a year.
A year ago, lawmakers started out with a $9.9 billion budget that had to be cut twice during the year. Now, state spending has fallen to $8.4 billion under the new plan and is likely to face further cuts during the year.