The uneasy stalemate that ended this year’s budget battle didn’t answer many questions, and the new ones it raises loom large as Gov. Jan Brewer and the Legislature look to what will probably be an even tougher fight ahead.
Practically from the moment she took office, Brewer insisted she would not “decimate” education spending or make cuts that would harm the most vulnerable of Arizona residents, and pushed a temporary sales tax increase as a way to avoid doing so. But the prospects for getting a special election on the tax hike seem dimmer than ever, and without it, she may not have a choice.
Brewer insists she is still committed to getting her temporary sales tax increase on the ballot, but is sounding less optimistic than in the past. She said she would like to have a special election in March, but said she doesn’t know whether the Legislature will be able to approve the ballot referral. If lawmakers won’t put it on the ballot, she said, she may have to wait for voters to do so themselves in November 2010.
“Looking at everything in perspective, I think there’s always the avenue of an initiative,” Brewer said Sept. 10.
A citizen initiative would bypass the Legislature, where Brewer fell just two Senate votes shy of getting her ballot referral. But it would mean the state won’t see any additional revenue in fiscal 2010, and possibly not until the 2011 fiscal year is half over.
While Brewer and the Legislature must figure out how to close a $1 billion gap remaining in fiscal 2010, the structural deficit going forward is at least $3 billion, and Brewer said it is closer to $4 billion. Federal stimulus money, proceeds from the sale and leaseback of state properties and other revenue sources will help close the gap in 2010, but that one-time revenue is not expected to be around for the following year.
“She wants the tax referral, and I just don’t think now it’s possible to get that done in time to help this year’s budget. So now we’re talking about the 2011 budget at the earliest,” said Sen. Jim Waring, one of the few Senate Republicans to vote against budget legislation that included the ballot referral.
The deal that Brewer reached with reluctant Republican lawmakers – the ballot referral in exchange for a permanent repeal of the state’s equalization property tax and $400 million in income tax cuts that would go into effect in 2011 – is still on the table, said Brewer spokesman Paul Senseman. Many legislative Republicans are still open to the idea as well.
Rep. John Kavanagh, a Fountain Hills Republican, said the only way Brewer can get her ballot referral from the Legislature is to hold to the deal she made with Republican lawmakers. But to close the budget gap, she’ll have to reinstate the $300 million in cuts she vetoed, he said, and she may have alienated some legislators with her veto of the property tax repeal, which is expected to bring in about $250 million this year. That may leave November 2010 as her best option for a vote on the tax hike, Kavanagh said.
“I think she’s going to have to go to the ballot, because I think too many bridges were burnt with members to get enough votes for the referral in the House,” he said.
Sen. Jack Harper said he won’t support the ballot referral unless it’s tied to the property tax repeal and future income tax cuts. But the Surprise Republican doubts Brewer will be able to get the ballot referral passed without a few Democratic votes in the Senate, votes she is unlikely to get as long as the property tax is still on the table.
“I don’t see it happening unless the Democrats are supportive,” Harper said.
Kavanagh criticized Democrats for organizing as a bloc, preventing Brewer and Republican leadership from passing a budget with a handful of defectors from the other side of the aisle, much as former Gov. Janet Napolitano did with opposition Republicans.
“Were I the governor, I’d be using my discretionary stimulus money to get the one or two Democrat votes in the Senate we need,” Kavanagh said. “I assume she’s going to have to sweeten it a little bit more in the Senate to maybe get one or two Dems.”
Democratic Rep. Kyrsten Sinema said her caucus is holding firm because of shared values. “We cannot, in good conscience, raise taxes on middle class Arizonans while at the same time giving a massive tax break to big corporations. That is not okay, period,” said Sinema, the assistant House minority leader.
Rather than seek the votes of the Republican caucuses and a small handful of Democrats, Sinema said Brewer may have to go the opposite route to get her ballot referral. If Brewer takes the property tax repeal off the table to get Democratic votes, Sinema said, she may not be able to hold onto the votes of the Republican leadership, but she still will be able to get a few Republicans.
Sen. Jorge Garcia, the Senate minority leader, said he expects legislative Democrats to continue holding firm during the next session.
“Our position remains the same. There’s no sense in giving a tax cut while we’re asking voters to give a tax increase,” he said.
Before Brewer and the Legislature can sort out the balancing act that will be needed to get the extra revenue the governor wants, they will have to come back into special session to address funding for a number of smaller agencies. Brewer met with House Speaker Kirk Adams and Senate President Bob Burns on Sept. 10 to discuss the timeline for that special session, but no dates had been set as of press time.
“It will be interesting to see how it plays out when we get back into a special session, and where we go from here as far as keeping our budget somewhat in check. It’s going to very much be an every-couple-months kind of thing all the way through, is my guess,” Waring said. “I think most of us have long since accepted the fact that there’s not going to be one quick fix, one big vote that solves the problem. It’s going to be a series of votes, chipping away at an enormous problem.”