The major sticking point between the two sides has been revenue projections — not just for the upcoming fiscal year, which begins July 1, but also for the following two years. Though Gov. Jan Brewer had been unwilling to adopt the Legislature’s more cautious revenue estimates, it appears she had a change of mind.
“The governor agreed to use our revenue numbers,” House Majority Leader Steve Court said.
Multiple sources who have knowledge of the budget negotiations but are not authorized to speak publicly said the budget proposal also includes funding for grade-school reading programs — one of the governor’s priorities — and setting aside money for fiscal years 2014 and 2015, a legislative priority to prepare for the expiration of the one-cent sales tax increase voters approved in 2010.
Senate Majority Whip Frank Antenori said legislative leaders began asking rank-and-file Republicans for feedback on the proposal on April 26.
“Some members have concerns still,” he said. “In order to get their support, they need certain things, and we’ll take that back to the governor’s staff. There’s still a little hammering out (needed), but it’s not much.”
Court said he expects “some fine-tuning.”
“But I can’t imagine it will be a lot of change,” he added.
An overview of the yet-to-be finalized budget showed that total general fund spending will be $8.572 billion in FY13, $8.83 billion in
FY14 and $9.208 billion in FY15.
It also showed that policymakers anticipate cautiously modest revenue increases of at least 5 percent during the next three years.
Other budget components include:
• $450 million deposit to the rainy day fund.
• $40 million for a K-3 reading program, along with accountability measures and performance requirements.
• $12 million for K-12 building renewal.
• $6 million for the Phoenix medical school.
• $7 million for the Office of Tourism, though the statutory funding formula for the office will be repealed.
The agreement in principle with Brewer’s office comes a little more than a week after talks appeared to be at an impasse after the governor told legislative leaders that she would veto any legislation they sent to her until work on the budget was completed.
The breakdown in budget talks prompted Republicans to begin negotiating with legislative Democrats, who last month released a spending plan that they touted as being more fiscally conservative than either Brewer’s or the one backed earlier in the year by Republicans.
But those talks ended April 24.
“We were trying to make a budget that was good for the state,” said House Minority Leader Chad Campbell. “We gave them our final offer, and it is what it is.”
He said the two sides were “still fairly far apart” after the April 24 meeting ended.
The cornerstone of the Democratic plan was that it left the state with a smaller estimated deficit in fiscal 2015 than either the legislative Republican or gubernatorial proposals. Campbell said he wasn’t surprised that Brewer accepted the Legislature’s revenue outlook, even if doing so meant giving in on government spending she had advocated for.
“If the governor caved again — which seems to be common for her at this point — it’s the latest in a long line of decisions that leave Arizonans wanting more,” Campbell said. “I’m dying to see how she closed the gap so quickly without caving in on everything she said she believed in.”