Bipartisan talks on the fiscal 2005 budget in the Senate were scheduled to resume March 25 after a week’s hiatus, and House Republicans are in the second phase of their task, trying to reconcile differences on spending proposed by four previous working groups.

However, it is not certain that these were signs the Legislature has decided to begin serious work on a budget legislative leaders said they planned to have completed by 65th day of the session. March 25 was Day 74.

“I don’t know what’s going to happen,” said Sen. Jack Brown, D-5, Senate Democratic leader. “They [Senate Republican leaders] couldn’t get anything through their caucus so they invited us back to the table.”

Senate Republicans and Democrats had declared talks at an impasse on March 16. GOP leaders then tried but failed to gather enough support from rank-and-file Republicans to pass a budget without Democratic support.

In both the House and Senate, many Republicans are attempting to hold the line on spending at $6.8 billion, and, at this time, that appears to be a major stumbling block. Governor Napolitano has proposed spending $7.2 billion. The higher figure includes increased spending for higher education and health and welfare programs, state employee pay raises and all-day kindergarten.

Rep. Joe Hart, R-3, a member of the House working group, admits he is caught in a personal dilemma. He says he is trying to hold the line, but he believes legislators should consider funding for a raise for state employees.

“We’ve got to do something to keep from losing these people all the time,” he said. “We need to do something at the lower levels. We’re just becoming a training ground for everybody else.”

House Majority Leader Eddie Farnsworth, R-22, says he hopes to have a budget proposal ready to present to the Republican caucus by the week of March 29.

Mr. Hart says he thinks the working group will have something to present, but he’s not sure there will be a consensus on what is proposed.

Mr. Farnsworth was more optimistic. “I think the membership [of the working group] reflects the caucus, and we will have a budget that the House will go along with,” he predicted.

Besides Mr. Farnsworth and Mr. Hart, members of the current working group are Reps. Tom Boone, R-4; Jennifer Burns, R-25; Linda Gray, R-10; Deb Gullett, R-11; John Huppenthal, R-20; John Nelson, R-12; Russell Pearce, R-18, chairman of the House Appropriations Committee; Steve Tully, R-11; and Bill Wagner, R-3.

Revenue Collections

Meanwhile, the Joint Legislative Budget Committee staff is reporting that fiscal 2004 revenue collections through Jan. 31 are running $126 million above projections. Opinions differ on the meaning of the improved collections.

Mr. Farnsworth said, “We still have a $330 million deficit without any additional spending.”

Ms. Napolitano, at her weekly press briefing, said, “We’re certainly better off than we were last year at this time.”

At a March 19 meeting, JLBC chose to proceed with caution when endorsing new capitation rates for individuals in the Department of Economic Security Long Term Care Program.

The new rates are based on an actuarial study required by the federal government and are an average of 7.77 per cent higher than current rates. JLBC estimates the new rates will cost the state general fund an additional $3 million during the current fiscal year.

The JLBC endorsed the new rates with the caveat that its action did not constitute an endorsement of any supplemental appropriations for DES. There was no discussion by committee members on the action. —