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GOP lawmakers seeking strict spending caps

Republican legislators are striving to mark Arizona’s centennial with a fundamental change to how the state spends its money that would effectively shackle future Legislatures from creating any new government program unless they found a corresponding place to cut spending.

Conservative lawmakers and small-government advocates have been fighting to implement the so-called Taxpayer Bill of Rights for a decade. The first attempt to replicate the strict spending limits first imposed in Colorado in 1992 came in 2002, and Arizona lawmakers have introduced some version of the TABOR proposal each year since.

The core of TABOR is simple: limit government spending increases to only those necessary to cope with inflation and any growth in population.

Success was never closer than last session, when the Republican supermajorities in both legislative chambers sent HB2707 to Gov. Jan Brewer — who vetoed it, saying that, while she agrees with the concept of a spending limit, she didn’t think that a TABOR formula was the right way to do it.

Faced with that reality, TABOR’s proponents are now looking for ways to implement the spending limits by avoiding the governor altogether.

The most creative way small-government Republicans have devised to implement a spending cap is on display in the House, where Rep. Justin Olson, R-Mesa, hopes to include TABOR’s ideals in the chamber’s rules. On its face, the proposed House Rule 38 would be the most flexible of the measures. To override it, a simple majority of the House would have to vote to suspend the rule before voting to adopt the budget. The goal is to use political pressure to force lawmakers to think twice before voting to increase spending at the proposed rate.

But the rule faces its own hurdles. Olson introduced the rule change Jan. 24, but a planned vote two days later was called off when several members of the Republican caucus raised objections, questioning whether it was appropriate to mix policy with procedure.

Despite the vote being postponed, Olson said he’s optimistic that it will gain momentum, based on the support of last year’s TABOR bill, but he wants to make sure he has broad support for the rule change within the Republican caucus.

“I don’t want to move it on the floor until I feel that the overwhelming majority of Republicans are comfortable with it,” he said.

Though a rule change can be made with approval from only 31 members of the House, Olson said he wants to get the backing of at least 34 Republicans before seeking a vote. He said he “would like to think” that there are already 31 votes for the rule change, but wasn’t certain.

The rule has already earned the endorsement of the conservative Arizona Free Enterprise Club, which advocates for smaller government and lower taxes.

Steve Voeller, the organization’s president, said he was a “huge supporter” of the rule change, even if it wasn’t as binding as some of the other approaches.

By forcing members to take the extra step of voting to override the rule, it was adding another layer of accountability to the process, he said. Voeller also said placing the spending restrictions in the rules might be more palatable to the Legislature than anything that was stricter.

“We’re not tying the Legislature’s hands, not putting the governor in a box, and it’s not a TABOR,” he said. “But it would force members to think twice, and maybe try harder to craft a budget that met that limit.”

If adopted, the rule would have an immediate impact: The governor’s proposed fiscal 2013 budget would be considered out of order. Estimates by the Joint Legislative Budget Committee have set the cap under the rule at $8.54 billion; Brewer has proposed spending $8.96 billion.

Matthew Benson, Brewer’s spokesman, would not comment on how the rule would affect the governor’s proposed budget, but said that she still does not agree with the TABOR formula, regardless of how it is implemented.

But the governor’s approval wouldn’t be needed for either Rule 38 or HCR2032, which would put the spending limit in the state Constitution.

Rep. J.D. Mesnard, R-Chandler, said the key difference between HCR2032 and last year’s vetoed bill is that, rather than tie the spending limit to the previous year’s budget, it would use the fiscal 2000 budget as the baseline. He said he chose that year because it was an “average” year and didn’t include the wild revenue swings caused by a recession or an economic boom.

Arizona’s general fund budget in fiscal 2000 was $6 billion. With an average population-plus-inflation rate of slightly more than 5 percent since then, Mesnard said the spending limit for the next fiscal year would be more than $10.5 billion.

Although the constitutional change would have more teeth than a rule change, it still has a “safety valve,” Mesnard said.

The part of the Constitution he is seeking to amend already allows the existing spending limit — which is based on a percentage of total personal income of Arizona residents — to be overridden by a two-thirds majority in both legislative chambers.

“We can still go beyond the spending limit. It just requires a higher threshold,” he said.

Mesnard acknowledged that the two-thirds threshold would be a difficult one to clear, but he said he doesn’t believe it will have the same effect as another constitutional provision that requires a super-majority vote in order to raise taxes. Since voters approved that in 1992, lawmakers have been unable to muster the needed support to raise taxes, even during the recent recession when the state faced multi-billion-dollar revenue shortfalls.

“Conservatives aren’t going to like either one, but, in the past, they’ve tolerated spending increases, even though they haven’t voted for tax increases,” he said.

But Tom Jenney, director of the Arizona chapter of Americans for Prosperity, said that trying to impose the rule change through a constitutional change — which requires voter approval — is risky.

“Any time you send something to the ballot, you have to have a war chest of millions of dollars in order to mount the right education campaign to get it to pass,” he said.

House Majority Whip Debbie Lesko is also working on a follow-up to last year’s vetoed TABOR proposal that makes adjustments in an attempt to conform to Brewer’s veto letter.

But of the all the proposed measures, Jenney has thrown his support behind the one that isn’t really a spending limit at all, but a transparency bill.

SB 1275, sponsored by Rep. Steve Smith, R-Maricopa, would require the Legislature to hold additional public hearings and an extra roll call vote to approve a budget that exceeds the TABOR-formula spending limit.

Smith said his bill wasn’t meant to replace any of the other proposals, which he supports. But he said it was important to add the extra level of transparency — which may end up being more enforceable than a law.

“We know what we do with statutes. We can always, on some level, circumvent things,” he said. “I think it’s a different measure to tell the public,  ‘We’re going to spend more than we take in, so come down to a meeting and tell us what you think.’”

Jenney agreed, saying that the political cost may be higher to make a pledge of transparency and then trying to circumvent it.

Plus, with the governor’s veto from last session and Republicans’ concerns about the rule change, it might be better to take smaller steps to control spending.

“It’s an easier sell both to Legislature and to the Governor,” he said.

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