DALLAS — After years of struggle, Arizona’s governor and Legislature have easily completed the $8.6 billion budget in the state’s 100th year, setting aside $450 million for a rainy day while continuing to build schools and prisons.

Gov. Jan Brewer, who signed the spending bill Monday, called the measure a “comprehensive budget plan that adds real resources to our state’s most critical programs, while setting aside dollars for the fiscal challenges that lay ahead.”

In addition to building two prisons for the state’s rising inmate population, the budget allocates more money for education and prepares the state for higher costs under the federal health care act that requires Supreme Court approval before taking effect. The high court is considering throwing out the new health insurance law under a challenge from Republican-controlled states, including Arizona.

To guide the economically devastated state through the worst recession since the Great Depression, Brewer led the effort to enact a three-year, one-cent sales tax increase that is scheduled to expire next year. The tax increase, approved by the voters, has given the state the cushion it needed to preserve education and health care programs while making deep cuts elsewhere. Arizona’s $3.5 billion shortfall in 2009 was the worst in the nation on a per-capita basis, Brewer said.

“The decisions that followed were the toughest of my career,” Brewer said after signing the budget.

Brewer, who depicted the state as crime-ridden and overrun by illegal immigrants during her election campaign in 2010, was a leading advocate for Senate Bill 1072 that made failure to prove citizenship during a routine police stop a state offense. That law is also up for review by the U.S. Supreme Court.

During a celebration of Arizona’s centennial, lawmakers ignored Brewer’s plea to buy back the state capitol complex, which was mortgaged to raise operating revenue. But they allocated $20 million for a new state maximum security prison, with another $30 million promised in next year’s session.

The Legislature also approved $16 million for a private, for-profit prison, with expenditures to begin in 2015. The legislation also does away with the requirement to compare the costs of private versus public prisons after a previous study showed public prisons to be more cost-effective.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.