It is roughly $100 million less than the governor’s original budget, which she unveiled in January and called for $8.9 billion in spending, and it is $30 million more than what House Republican leaders offered as a counter-proposal.
But the most fascinating aspect of the spending plan lies less in the numbers and more on who backed it, and more importantly, how it came to be.
For the first time in years, the Democrats had a significant influence on the final shape of the state’s spending plan. The last time this happened was when Janet Napolitano, a Democrat, was in charge of the Governor’s Office.
Despite the GOP’s dominance at the Capitol, a Republican governor backed by Democrats and a handful of GOP legislators forged a spending plan and set aside the Legislature’s traditions, overruling the wishes of the majority party and approving next year’s spending plan.
That wasn’t supposed to happen. Republican legislative leaders initially planned to put in place a spending proposal that was supported by their party, but the fight over Medicaid expansion forced the bipartisan coalition to extend their alliance to pass the budget.
The expansion plan is expected to draw down billions of federal dollars over the years, freeing up money in the state’s general fund; hence, the budget and the expansion plan are closely intertwined.
Just a year ago, Democrats stood by the sidelines to criticize the governor and her party over the GOP-backed fiscal 2013 budget.
This time, they stood in the center to defend the budget and the governor’s expansion plan.
The Joint Legislative Budget Committee, the Legislature’s budget research arm, estimated that the fiscal 2014 budget, which the governor is expected to sign within days, would chip away at the state’s fiscal imbalance over three years — leaving the budget in the black by fiscal 2016.
By that year, the state is expected to completely eliminate Arizona’s structural imbalance — the first time in years.
The Governor’s Office wasted no time in holding up the bipartisan proposal as the more conservative plan when compared to what Speaker Andy Tobin offered as an alternative. Gubernatorial spokesman Matthew Benson said the coalition’s budget would spend, over three years, $81 million less than the speaker’s proposal.
Cutting in some areas while adding in others, the new budget is $16 million less than the proposal passed by the Senate a few weeks ago.
Here are some key differences between the original bipartisan spending plan approved by the Senate and the new state budget:
• Sets aside $21.9 million to pay off what the state owes in deferred payments to schools that have fewer than 600 students.
• Reduces the money available for the education department’s IT development program by $17 million.
• Appropriates $2 million to community colleges, excluding those in Maricopa and Pima counties.
• Gives $8 million to the University of Arizona for its medical campus in Phoenix.
• Provides $500,000 for the UofA Freedom Center Think Tank.
• Eliminates $3 million from the Senate budget that was earmarked for a 10 percent increase in subsidies for foster parents.
• Increases contingency funding for Child Protective Services and Childcare Assistance by $3 million.
• Eliminates $100,000 for the Domestic Violence Fund, which was to go to a crisis response team in Yuma.
• Provides $5 million for the Department of Environmental Quality’s e- licensing program.
• Deletes $1.25 million in long-term health care money for Navajo and Graham counties The new budget also includes several policy changes, including:
• Continues the Arizona Health Care Cost Containment System until 2023.
• Allows the Arizona Commerce Authority to issue loans.
• Folds some of the provisions of a CPS-related bill, which the House approved on June 11, into the budget.
• Allows school districts to permanently increase their bonding capacity.
The budget package’s most controversial component, as was expected, deals with expanding AHCCCS by levying an assessment fee, which will then be used to draw down federal funds.
Even as the Senate and House hunkered down to tackle the budget and governor’s expansion plan, her office vigorously defended her decision to implement a key component of the Affordable Care Act.
“While I remain opposed to the Affordable Care Act, it has become increasingly clear to me that the status quo is not an option,” Brewer said in a news release.
She noted that Arizona’s Medicaid waiver, which allows the state to get matching funds for the health insurance of its childless adult population, is expiring at the end of this year.
“The cost to continue that coverage with state-only funds is prohibitive — more than $800 million over three years. Something has to give,” she said.