Californians will vote Nov. 2 on whether to undertake $3 billion worth of stem cell research and finance it by creating a state institute to offer research grants paid for with state bonds.

Supporters of Arizona Prop. 101 say that is the kind of arrangement they have in mind for future voter-approved new Arizona spending programs. Prop. 101 requires any ballot measure that proposes new spending to propose also a source of increased revenue sufficient to cover the spending without tapping the state general fund.

Arizona struggles to make budget ends meet in part because of “unfunded mandates” — programs that require spending but don’t provide any revenue.

Mandated spending as a percentage of the current $7.2 billion state budget is up for interpretation, said legislators and other state officials, but most estimates were around two-thirds, including the impact of ballot initiatives and court decisions on funding for education, health and other programs.

Prop. 101 also deals with the possibility that even a dedicated revenue source might not provide adequate funding for a new program. In such a case, the proposal says, the Legislature could reduce the mandated expenditure in any given budget year to match the amount of funding available from the revenue source.

Farnworth: Good Fiscal Management

Rep. Eddie Farnsworth, R-22, sponsored the legislative resolution that put Prop. 101 on the general election ballot. It was a partisan issue. The Senate passed the resolution, HCR 2022, 17-14, with Democrats and Republican Slade Mead voting nay. The House vote was 39-21, with all Democrats and Republican Pete Hershberger voting against it.

Not all Democrats oppose it, however. Governor Napolitano told Arizona Capitol Times in August she is “generally in agreement” with Prop. 101. “I believe that voters are better informed the more information they get, and to know what will be used to pay for these things is an important bit of information,” she said.

Mr. Farnsworth said that although the proposition does not specify increased taxation as a revenue source, taxpayers understand its meaning.

“The state doesn’t make money,” Mr. Farnsworth said. “Voters realize that spending comes out of their pockets.” He said Prop. 101 is “nothing more than good fiscal management. We can’t continue to encumber the general fund.”

Mr. Farnsworth said passage of Prop. 101 will not change the initiative process nor will it affect existing voter mandates.

“I personally believe that it should be retroactive, but that’s not good policy,” he said.

The Voter Protection Act (Prop. 105), passed in Arizona in 1998, limits the Legislature’s ability to change voter approved ballot measures, unless the change “furthers the purposes” of the measure.

Arguments Against Prop. 101

In the election publicity pamphlet, Prop. 101 opponents say the measure diminishes citizen initiative rights.

The Arizona Chapter of the National Organization for Women calls it “a power play designed to reduce the power of voters” that will “result in more complex and confusing propositions; a hodgepodge of new and increased taxes or fees . . . and an increasingly complex and unfair tax code.”

The Arizona Advocacy Network Foundation, which describes itself as a coalition of nonprofit public-interest organizations, states: “We need to stop this power grab by legislators who don’t like decisions made by voters.”

The League of Women Voters says the proposition is too restrictive because “it would apply no matter the expenditure required, whether it was simply for the addition of two members to an already established commission or for a new health care initiative.”

And the Grand Canyon Chapter of the Sierra Club calls Prop. 101 a “power grab” by the Legislature to “undercut voter-approved measures” and could go as far as creating a new tax or fee for enforcement of such things as the voter-approved ban on cockfighting.

“The trend for Arizona voters has been to restrict the Legislature’s ability to tinker with initiatives as was manifested in voters’ support of the 1998 Voter Protection Act,” the Sierra Club states in its ballot argument, a reference to that year’s Prop. 105, which forbids the Legislature changing the purpose of any voter-approved measure.

Also, Sandy Bahr of the Sierra Club told Arizona Capitol Times, ”There’s some question about swiping money from an existing fund. That would have to be hashed out if it passes.”

’Shine A Light On Cost’

Kevin McCarthy, president of the Arizona Tax Research Association, said Oct. 19 that Prop. 101 “will have a positive effect of shining a brighter light on what some of these initiatives are costing.”

And he earlier had pointed out what can happen even with a dedicated revenue source if the Legislature cannot match spending to revenue. In an article for the Arizona Daily Star in May, he wrote that while voters did indeed approve a sales tax increase in 2000 to pay for a program of increased spending for schools, the new program’s requirement for annual additional increases will outstrip the tax revenue. “That [K-12] spending, which is over and above the spending provided from the increased sales tax, falls on the general fund,” Mr. McCarthy wrote.

His view is underlined by a report from the Joint Legislative Budget Committee which says the program mandates an annual 2 per cent increase in K-12 funding which is not covered by the additional sales tax revenue and which already has cost the general fund approximately $281 million.

The JLBC also notes that the “Growing Smarter Act” of 1998 diverts $20 million a year from the general fund to the Land Conservation Fund, the “Healthy Arizona Initiative” costs the general fund more than $200 million a year, and the Clean Elections Act costs $8 million. —