Details of the Republican budget plan given to majority party lawmakers this week show they and Gov. Jan Brewer aim to close a nearly $2.7 billion budget gap with more than $1.1 billion in cuts and wholesale elimination of a number of state programs.
The cuts would affect a number of state agencies, but hardest hit are AHCCCS, the state’s health care program, and K-12 education. The proposal, which has not been formally released, would trim $385 million in healthcare spending by rolling back the eligibility requirements to where they were before 2000, when voters approved increasing them to the federal poverty level.
The change wouldn’t take effect until January, because the state will be using federal stimulus money to pay healthcare costs through the end of 2010 and rules associated with that funding prevent the state from lowing eligibility levels.
Although Brewer had initially proposed asking voters to decrease the eligibility, lawmakers now believe they can do so without voter approval. But doing so may invite a lawsuit, as the 2000 ballot measure is widely believed to be subject to a voter-protection provision of the state constitution, which prevents lawmakers from undoing programs and laws approved by voters.
Another $385 million will be carved out of K-12 education funding in the proposal. Eliminating state-funded full-day kindergarten classes accounts for $218 million of those cuts. An additional $93 million cut will be backfilled by federal stimulus funds. The proposal also calls for the elimination of all non-formula education programs.
The plan calls for $989 million in new revenue, of which $918 million would come from the one-cent temporary sales tax that will go before voters in a May 18 special election.
Voters must approve other components of the budget proposal, too. The plan calls for two November ballot items. One would allow lawmakers to raid the Growing Smarter fund, which was created by voters in 1998 to preserve open space, and shift $124 million to the state’s general fund.
The other would move $325 million from the First Things First fund to the general fund. Voters approved that measure, which included an 80-cent-per-pack tobacco tax, in 2006. Last year, lawmakers tried to take the money, but the Arizona Supreme Court said they couldn’t do so without permission from voters.
Although GOP leaders have said they intend to include a contingency plan in the budget to trigger additional cuts if voters reject the sales tax increase in May, details on those cuts were not included in the document obtained by Arizona Capitol Times.
The budget proposal also includes cuts and accounting gimmicks to close a nearly $700 million deficit in the current year. It would cut $122 million from state spending and defer $450 million in payments to public schools and universities until the start of the next fiscal year, which begins in July.
Republican leaders were still shopping the proposal to caucus members, though they privately remain optimistic about the chances the budget will be voted on this week.
Other items in the budget include:
• Eliminating KidsCare, a public healthcare program for children
• Cutting $26 million from the Department of Corrections
• Decreasing how long welfare recipients can receive cash assistance
• Shifting care of sexually violent predators to counties
• Closing the Department of Juvenile Corrections and transferring the inmates to counties
• Cutting state employee salaries by 5 percent