Unlike the past two years, which have seen the House and Senate collaborate on budget proposals before negotiating the final terms with the governor, this year there are competing $10.6 billion plans from the two chambers.
Also unlike recent years, the governor has already been involved in budget talks and, in fact, helped craft the Senate proposal and has promised to sign it if it passes the Legislature.
Despite that, the House budget is further along in the process, having been approved in committee April 30. The Senate budget was slated for a committee hearing May 2, but a last-minute disagreement over extending a deadline to donate money for private school scholarships and receive a tax credit derailed the hearing and has forced the Senate into a holding pattern.
At press time, Senate leaders had not come to an agreement and had not rescheduled the budget hearing.
The differences in the two budget proposals lie not only in the process they were created — Senate Republicans negotiated a deal with both Democrats and Gov. Janet Napolitano, while House Republicans acted independently and received some Democratic support — but in the spending priorities.
While the House budget includes substantial tax cuts, the Senate eschewed that in favor of increasing teacher pay and funding road construction. Senate President Tim Bee called the proposal “an investment in our future.”
Senate Minority Leader Marsha Arzberger, D-25, said the budget meets the priorities of Democrats, Republicans and the governor.
“It’s not a fat budget, it’s a lean budget,” she said. “It’s a good budget.”
Teacher pay raises
The budget would increase minimum teacher salaries to $33,000 at a cost of $46 million. In her State of the State speech, Napolitano said creating a minimum salary for teachers was a priority of her administration.
In contrast, the House budget only gives $8.7 million for teacher pay raises, but spends about $20 million more on education than the Senate proposal.
The House budget includes $62 million in new tax cuts, including a 2.5-percent corporate income tax cut and allowing income tax deductions for donations made to college savings plans.
The Senate, meanwhile, contains only $7 million in tax cuts for business property tax reductions. House Republicans have criticized the Senate proposal for not including more tax reductions, but Bee said the economy dictated the priorities.
“We have limited resources this year – limited resources for tax cuts and limited resources for spending,” he said.
Farnsworth: No fiscal restraint
Rep. Eddie Farnsworth, R-22, was critical of both budgets and said lawmakers are “spendaholics” and spend too much money on social welfare programs.
“There is no limit to the voracious appetite this Legislature has to spending other people’s money,” he said. “There is no fiscal self-restraint…
“If we were individuals [spending like this], we would be in some kind of rehab.”
Farnsworth said state government is already mandated to spend more than $1 billion automatically each year because of voter-approved initiatives.
“We spend a billion [dollars] and then we decide how we’re going to tack onto that,” he said. “People who run their households like we run government are going bankrupt. People who run businesses like we run government are going bankrupt.”
House and Senate leaders are expected to try to hammer out a compromise between the two budgets in the coming weeks.
Arzberger said lawmakers need to temper their expectations that the Senate budget will waltz through the process in its current form.
“We still have one chamber to get involved,” she said. “I believe the additional issues should be addressed at the time that we complete that final approval…
“Much as we love this budget, we have to be realistic. There is still the House chamber involved.”