Budget negotiations between Republican and Democrat leaders haven’t produced any meaningful agreements on how to best solve a deficit that may soon rise above $1 billion, but the House and Senate Appropriations committees are preparing to vote on a budget anyway.
“That’s my plan,” House Appropriations Committee Chairman Russell Pearce, R-18, said Feb. 6. “I’m hoping (to vote) next week.”
Pearce said he is hoping both the House and Senate committees will vote on a budget the week of Feb. 11, but added the House will act even if the Senate does not.
“I have the votes to put mine out (of committee) and even on the floor,” he said.
Agendas for the House and Senate Appropriations committees were released Feb. 7; the Senate has cancelled its weekly committee, while the House agenda does not include any budget bills. But Pearce said he will amend the House agenda to include budget proposals before the committee meets Feb. 13.
The move comes after nearly a month of unproductive negotiations between legislative leaders, who have met almost daily since the legislative session began. Pearce said the decision to forge ahead on passing a budget proposal from the committees was made because of a lack of progress in the negotiations.
“We’re in a crisis,” he said. “We have a huge hole to fix.”
On the Senate floor Feb. 7, Sen. Bob Burns, a Peoria Republican who chairs the Senate Appropriations Committee, called for a “reality check,” and said lawmakers need to get serious about fixing the 2008 fiscal year’s budget shortfall immediately.
Though it is still being crafted, Pearce said the budget that will go before the committees will include agency cuts, a freeze on filling vacant jobs, suspending all capital projects, dipping into the state’s rainy day fund and fund sweeps, or transferring money to the general fund from smaller funds that have dedicated revenue streams.
He said it will be “quite a bit different” than a budget he and Burns released last month that relied mostly on agency cuts and suspending capital projects to address an estimated $970 million revenue shortfall in the current fiscal year.
The committee’s vote would come on the heels of Republican leaders being briefed on preliminary state revenue numbers for January that show the economy is continuing to worsen, which may cause the deficit estimate to increase.
The January revenue numbers will include sales tax receipts from the busy Christmas shopping season.
State Treasurer Dean Martin said the state has about 28 percent less cash on hand now than it did a year ago, in large part because of lower revenues.
“I was hoping that we would start to see the bottom, but we haven’t,” he said. “It looks like it’s getting worse.”
And Gov. Janet Napolitano, who hasn’t yet entered into direct negotiations with legislative leaders, said her budget staff likely will revise its revenue projections. She defended her proposal to address the current year’s deficit, which relies heavily on borrowing to pay for capital construction projects.
“But again, even if you revise up or down in terms of deficit, the plan I had proposed you can adjust accordingly,” she said, “and meet the requirements that we need to balance the (fiscal year) ‘08 budget, put us into ‘09, not raise taxes, not cut things like education and programs for the vulnerable that we need to continue and then make smart choices.”
A possible revision of the deficit estimate provides even more reason for the Legislature to act quickly on a budget fix for this fiscal year, Pearce said. He and Burns have met with Democrat committee members and hope for their support – but the vote likely will proceed, even if that support is not there.
“I hope we can build consensus. I hope we can work together. But we have to move forward,” Pearce said.
Although House Minority Leader Phil Lopes, D-27, has advocated for more budget work to be done in the Appropriations committees, he would rather finish this year’s budget in the negotiations because that process has already begun.
“I think it confuses members,” he said of the sudden switch Pearce and Burns are proposing. “I think members on both sides are questioning what’s going on here.”
But Lopes conceded the negotiations haven’t made any progress. In order for them to be successful, he said, all of the parties involved need to remove their ideological hang-ups from the equation.
“We need to get to a point where we’re able to at least do some basic analysis,” he said. “That means we need to have our minds open a little bit because there’s a lot of nuance and complexity that doesn’t lend itself to, ‘We can’t do that because it costs too much.’ But if you ask me how, I don’t know.”
Napolitano was critical of lawmakers’ lack of progress thus far in the negotiations, blaming a commitment to political rhetoric among legislative leaders that is preventing meaningful work from being done.
“I think the Legislature doesn’t have the requisite sense on moving forward on ‘08 and getting ‘08 resolved so we can drill down on ‘09,” she said. “I think there’s been an awful lot of posturing, but this is called doing a budget, not campaigning for this fall.”
One thing Lopes is sure won’t result it a solution is meeting just for the sake of meeting.
“I think some people think the longer we meet and the longer we talk about this thing, the more likely we’ll get to a decision,” he said. “I haven’t seen any evidence of that.”
Regardless of how a budget agreement is crafted, House Majority Leader Tom Boone said it will be crucial to include Democrats in the process.
“Because we’re not going to get it done otherwise,” he said.
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