With the state’s coffers flush with money, the governor and legislative leaders continue to meet to discuss the budget, though the two sides have made little headway on the major issues.
Governor Napolitano said she and Republican lawmakers “are significantly apart” on education, transportation, public safety, and the Department of Corrections.
Senate President Ken Bennett, R-1, said the discussions have run the gamut.
“We’ve talked about everything from one-time revenues to ongoing revenues, education spending, tax package, transportation spending, border law enforcement,” he said in an April 25 caucus meeting. “We’re talking about everything from our desires to she expresses her desires.”
The state is facing a total General Fund budget of slightly under $10 billion, said Rep. Russell Pearce, R-18, as revenues have continued to come in ahead of expectations. In comparison, the General Fund budget for the current fiscal year, which ends June 30, is about $8.2 billion.
The extra revenue has left the state with about $950 million in surplus money, Mr. Pearce, a House Appropriations Committee chairman, said.
One of the key points in the negotiations between the governor and Republican leaders has been determining how to structure the budget surplus. Essentially, Ms. Napolitano and Democrat lawmakers would like to consider the budget — surplus and all — as one entity, while most Republicans would like the surplus separated out into “boxes” delineating ongoing and one-time revenues.
Sen. Burns: Boxes streamline process
Senate Appropriations Chairman Bob Burns, R-9, said having a box to deal with legislative and gubernatorial initiatives streamlines the budget process.
“Having been here when we had no box…it’s very hard to prevent chaos when we don’t have a box,” he said. “If we want to stay [here] a long time, don’t have a box.”
Mr. Bennett echoed those comments, adding that using boxes prevents the state from committing to spending more money than it is taking in.
“Within the box, you start to have discipline and competition and realism with regard to the dollars requested and the dollars available,” he said.
Ms. Napolitano said spending money on programs that meet the state’s needs, such as expanding the voluntary full-day Kindergarten program, realize a return on investment and don’t plunge the state into a deficit. A tax cut proposal backed by Republicans — $250 million next year and $800 million over three years — would do more harm to the state’s future than anything, she said.
“I’ll tell you what creates a structural deficit — because we’ve run the numbers — is a three-year permanent tax cut,” the governor said. “That thrusts us into permanent deficit. The all-day K we can easily afford, and it builds into our growing economy.”
Besides the tax cuts, Republicans are also proposing about $250 million to expedite freeway construction in Maricopa County and $100 million to beef up border security along the Arizona-Mexico border.
Meanwhile, the governor is looking to increase teacher pay and has a separate border security package.
Mr. Bennett said the two sides will continue to meet, but not necessarily until a deal gets done.
“I think we’ll go on with this negotiation as long as we feel that it’s productive and leading us to a resolution on the budget without compromising our principles,” he said.
Senate reporter Phil Riske contributed to this article.