Republican lawmakers have released a budget proposal they say will balance a $3.3 billion budget deficit without raising taxes or borrowing hundreds of millions of dollars. Instead, they will rely heavily on cuts to education funding and municipalities.
The plan, which was delivered to some Republican lawmakers on April 27 and is expected to be formally unveiled by GOP leaders later today, cuts $670 million from state spending and sweeps another $394 million from other funds to balance the budget. It also uses $989 million of federal stimulus money.
The plan also makes permanent roughly $600 million in cuts that were included in the fiscal 2009 budget.
However, two items expected to generate more than $500 million in non-tax revenues will face heavy opposition from Democrats and special-interest groups.
One component of the Republican budget is to reduce basic state education aid by $300 million and require school districts to spend down their savings to cover the cut, holding schools harmless. Under state law, school districts can set aside up to 4 percent of their budgets as a contingency fund or to save up for large expenditures in the future.
This would come on top of about $283 million in other cuts to K-12 education.
Earlier this month, several education advocacy groups and a number of lawmakers objected to the idea. Rep. Rich Crandall, who chairs the House Education Committee, told Arizona Capitol Times such a move punishes districts who managed their budgets well and didn’t spend every last dime given to them.
Also, the GOP budget plan would require cities and towns to rebate $210 million to the state general fund. That money, ostensibly, would come from what some Republicans say are large amounts of unspent impact fees collected by cities for public safety and infrastructure improvements. The fees are paid by developers.
“These funds exist, in part, because of taxes imposed on citizens,” House Speaker Kirk Adams said. “Instead of increasing taxes on citizens to manage our way out of this historic state deficit, we think this makes a great deal more sense to use this money to solve the state’s $3.3 billion shortfall in (fiscal year 2010) in the short-term.”
But Ken Strobeck, executive director of the Arizona League of Cities and Towns, said municipalities are diametrically opposed to the provision.
“They are not taxes. They are fees collected for a specific purpose, allowed by the Legislature,” he said. “All that money is already committed to, pledged for or paying for infrastructure.”
Agency cuts in GOP budget proposal
- AHCCCS — $62.6 million
- Community colleges — $13 million
- Corrections — $34.9 million
- Economic Security — $74.4 million
- Education — $282.7 million
- Health Services — $43 million
- Universities — $40 million