Blaming “extremists” from both parties for holding up the budget process and threatening the state with bankruptcy, Gov. Jan Brewer on Sept. 4 signed large swaths of the budget that she said will help the state “weather the storm” until the next legislative session.
But she vetoed parts of the main spending bill, including $300 million in cuts to K-12 schools and DES. She also vetoed the bill that included the equalization property tax.
Brewer said she will call the Legislature back into session in the near future to pass a “cleanup bill” to restore funding to a number of smaller agencies, but it appears as though lawmakers will set aside her proposal for a temporary sales tax increase until late 2009 or early 2010, when the next regular session begins. Brewer said she hopes to put the issue on the ballot in March.
“This fall and next regular session of the Legislature, the leaders and I must break the stranglehold that a handful of Republicans and Democrat extremists have on the Arizona Legislature,” Brewer said during her Sept. 4 press conference. “We cannot cut our way out of this problem. We cannot tax our way out of this problem. Both solutions will be necessary to resolve this crisis, and doing both will take incredible political courage and humility.”
County recorders and the Secretary of State’s Office would require about 90 days, at a minimum, to prepare for any special election, according to Secretary of State Ken Bennett. If a special election is not approved by Sept. 8, Bennett said, it would be difficult, if not impossible, to hold before the beginning of February.
The vetoed legislation included the repeal of the property equalization tax, which will now go back on the books just as counties are preparing to send out their first bills to property owners. Brewer said she still supports a gradual phase-out of the tax – eliminating it has been a top Republican priority this year – but said it would be “unconscionable” to eliminate $250 million in revenue at this time.
The partial budget that will be left in place will prevent the state from running out of cash before the end of the calendar year, Brewer said. But during the coming months, she said, the “extremists” in the Legislature, as well as the people of Arizona, will see the debilitating effects the budget cuts will have on critical services for vulnerable Arizonans, such as the chronically mentally ill and abused children.
“Whether it is now or in the next several weeks, the handful of extremists on the fringes of the Legislature will see the deeper and more painful cuts that will be necessary because of the delays in resolving the state’s deficit. Every month that goes by only makes the deficit and the pain more severe,” she said. “My actions today and the cleanup bill that I have proposed will allow our state to weather the storm at least until the next regular session of the Legislature.”
Brewer insisted that she was still 100 percent committed to putting a temporary 1-cent sales tax increase on the ballot. With the state slated to spend about $11 billion during a fiscal year in which it will only collect about $7 billion in revenue, Brewer said the state still needs to raise more money. “I am absolutely not giving up on it. Do the math,” she said.
Brewer declined to name the extremists she spoke of in the Legislature, saying, “I think that it’s fairly clear who those people are.” The ballot referral Brewer sought passed the House but fell short in the Senate, where four Republicans and all 12 Democrats refused to support it. Brewer lauded the 46 Republicans who voted for her budget plan.
“It is a time to set aside political agendas or personal campaign agendas, and for once place our state ahead of the tired and uncivil politics of the most extremely partisan. Now is the time to put our state ahead of keeping our legislative caucuses unified,” she said.
While the Republican caucuses were not unified on Brewer’s budget proposals, Democratic lawmakers stood together against the proposed budget in negotiations with the governor and Republican leadership.
“Unfortunately I think the put on their partisan hats and they absolutely did not want to participate in the process, and it was evident by their no votes on every piece of legislation that came through in regards to the budget,” Brewer said of legislative Democrats, many of whom complained throughout the session that they were not included in budget negotiations. “When … you want to wear political partisan hats and have a stranglehold, you are not effective. The only way you are effective by doing that is to causing chaos.”
Brewer said she did not veto cuts to the Department of Health Services because she and agency Director Will Humble determined the department’s funding would be adequate for the time being, though she warned earlier in the press conference that Arizonans would clearly see the effects of cuts to government services, including those aimed at helping the mentally ill.
She said she vetoed cuts to the Department of Economic Security because the agency suffered from such extensive cuts during midyear adjustments to the fiscal year 2009 budget. The cuts she vetoed in K-12 education would help ensure the state remains eligible for federal money. “It was important that we held a certain level so it wouldn’t be more devastating,” she said.
Brewer said she doubted that the ballot referral issue would be resolved in the upcoming special session, which will address funding for agencies such as the Registrar of Contractors, the Corporation Commission, the Government Information Technology Agency and the Arizona State Lottery. The special session will address budget bills that have already passed, she said, combining them into one piece of legislation that can be passed quickly.
In discussing the 2010 regular session, Brewer she might be willing to discuss a midyear repeal of the equalization property tax in exchange for the sales tax ballot referral. “I am hopeful that we can do something in that manner, but to make a commitment today” would be premature, she said.
Both Brewer and state Treasurer Dean Martin have warned of a looming cash crisis for the state, which has been borrowing from its non-general fund sources so it can continue paying its bills. With at least a partial budget in place, Brewer said, the state will have enough cash to last until the end of the calendar year.
“My actions today and the cleanup bill that I have proposed will allow our state to weather the storm at least until the next regular session of the Legislature,” she said. “We don’t want anybody thinking that we are going to head into bankruptcy. It doesn’t mean that we might not, but at this point in time the government can function and services will be delivered.”
Brewer acknowledged that the 2010 budget, or what remains of it, is not balanced, but said it is better than what she had anticipated. “Certainly it is not balanced. Of course, in Arizona we haven’t had a balanced budget for years,” she said.
After the governor’s press conference, House Speaker Kirk Adams and Senate President Bob Burns said the budget is unbalanced, as a result of Brewer’s vetoes, to the tune of about $350 million.
As to the special session that ended Aug. 25, Brewer took a long pause when asked if it had accomplished anything. Brewer called the special session immediately after vetoing much of the budget passed by the Legislature on July 1. In the interim, she, Burns and Adams struggled to garner enough votes for the ballot referral Brewer said would be a prerequisite for any budget she signed.
After pondering the question of what was accomplished for about eight seconds, Brewer said it opened up a lot of dialogue, gave her a lot of input and taught her a lot about legislators’ priorities.
“It certainly gave me the opportunity to do what I’ve done today in order of doing some reasonable, carefully constructed vetoes to allow the state to move forward,” she said.