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OSPB says more cuts coming, asks agencies to submit priorities

As Gov. Jan Brewer's office looks toward a second round of cuts for the 2009 budget, the Office of Strategic Planning and Budgeting is asking state agencies to submit lists of new spending priorities.

In a memo sent to agency heads on Feb. 23, OSPB director Eileen Klein said the Governor's Office is looking at a further reduction of about 20 percent from the 2009 budget fix that Brewer signed in late January to help eliminate a $1.6 billion deficit in the fiscal year's budget. The agency heads, Klein said in the memo, must revisit their 2010 budget plans in preparation for additional cuts.

Klein instructed the department heads to prepare lists of proposed budget reductions, prioritized in increments of 5 percent up to 20 percent.

"As the governor has repeatedly stated, ‘Everything is on the table,'" Klein wrote.

Brewer spokesman Paul Senseman said state revenue projections for fiscal 2009 have pushed the deficit even higher than the $1.6 billion shortfall that the Legislature tackled in a special session in January. It now appears revenue will fall short more than $200 million compared to the previous estimate.

Klein told the agency heads that Brewer also wants a factual assessment from all agencies on the impact of the potential budget cuts. Brewer requested that the agencies submit both the lists of proposed cuts and the impact assessments to her office by March 6.

Klein reiterated an oft-repeated assertion by the Brewer administration and Republican legislators that former Gov. Janet Napolitano's budgeting in 2008, and not simply the recession alone, was responsible for Arizona's budget woes.

"Unfortunately, permanent spending commitments based upon faulty or temporary revenues and a bleak economic outlook suggest more difficult times ahead for Arizona," Klein's memo stated.

Another budget revision was already looming, however, as lawmakers admitted making some mistakes during the special session in January. Republicans tried to sweep some funds that could be outside the Legislature's authority, and lawmakers were expecting to revise the fiscal 2009 budget to account for the off-limits funds even prior to the new revenue estimates.

Lawmakers warned: Drug, human-smuggling crimes spilling into AZ

Members of the Senate Judiciary Committee get something of a show-and-tell presentation regarding border violence. The members include (from left) Sens. John Huppenthal, Jonathan Paton, Russell Pearce, Richard Miranda and Meg Burton Cahill. Sen. Chuck Gray attended but is not pictured. (Photo by Bill Coates)

Elements of the Mexican drug and human smuggling trade are spilling into Arizona with alarming frequency, state and federal officials have warned members of a Senate committee.

Last year, raging wars among drug cartels claimed the lives of more than 5,300 people in Mexico, Department of Public Safety Commander Dan Allen told members of the Senate Judiciary Committee. The cartels often fight for control of smuggling corridors and hubs.

And now, Arizona law enforcement officials are increasingly confronting crimes related to Mexico's $132 billion drug-smuggling industry, Allen said while standing in front of a display of firearms favored by the country's five drug cartels.

Last year, law enforcement officials in Phoenix investigated approximately 370 incidents of kidnapping, a number that ranks the state's most populated city second in the world, trailing only Mexico City, he said.

"These trends aren't going down, they are going up," he said on Feb. 23.

An event of particular concern for Arizona law enforcement occurred in April of 2007 when 70 Gulf Cartel members in paramilitary gear stormed a police station in Cananea, Mexico, where they killed 22 people, including five police officers. Within days, about almost half of the station's assigned officers resigned, Allen said.

In a strikingly similar home invasion in Phoenix in 2008, the invaders dressed in full gear and armor to masquerade as a Phoenix Police tactical unit. The suspects also engaged in a military-style strategy to storm the house by dividing into teams; one to lay suppressing fire to freeze the occupants and another to enter the home, Allen said.

A slideshow presentation accompanied the DPS presentation and included disturbing images of executed cartel victims in Mexico, and another man found slain in the deserts of southern Arizona.

The victims were wrapped in duct tape before execution, and Allen showed the committee's lawmakers similar photos of rescued drop-house hostages in Phoenix with their hands and faces bound in the exact fashion.

A portion of the presentation was labeled as "astonishing," by the committee's chairman, Sen. Jonathan Paton, while Sen. Russell Pearce, a Republican from Mesa, used the occasion to castigate Arizona media, which he blamed for minimizing the state's immigration-related dangers.

"I hope this wakes some people up," he said, later accusing former Gov. Janet Napolitano of ignoring illegal-immigrant related violence.

Attorney General Terry Goddard told the committee members that Mexican smugglers often work in tandem with individuals in Phoenix, and he advocated the use of warrants to seize suspicious wire transfers of cash destined for Mexico.

He said court-obtained warrants to allow law enforcement officials access to details of the wire transfers had a dramatic impact on reducing the amount of cash wired to Mexico during the short time they were used in 2006. The practice, though, was suspended by the courts shortly thereafter as a lawsuit filed by Western Union went through a lengthy appeals process. The Arizona Supreme Court recently heard arguments in the case and is expected to issue a decision soon.

Goddard said used-car dealers frequently collude with smugglers, who buy vehicles to assist smuggling operations. Smugglers are known to purposefully default on the car payments, so if seized or recovered, the vehicles are returned to the dealers.

"We found that many coyotes were buying used cars in gross," he said. "They would buy out the lot."

He also touted his office's work to break up syndicates that shipped illegal immigrants across the county and others that set up "straw purchases" of firearms in Arizona that were destined for use by Mexican cartel enforcers.

The committee received presentations from DPS officials, Goddard, Pima County Attorney Barbara LaWall, U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives Agent George Gillett, and Anthony Novitsky, the major crimes chief of the Maricopa County Attorney's Office.

The officials spoke in front of a backdrop of assault weapons, including AR-15 and AK-47 semiautomatic rifles and a light-weight Belgium-made handgun known ominously among smugglers as the "mata policia," or cop-killer, which refers to the pistol's ability to pierce body armor.

But the "elephant in the room," according to Gillett was the Barrett .50 caliber sniper rifle, seized by law enforcement officials in Yuma. Using ammunition bigger than an index figure, the high-powered semiautomatic rifle is commonly used by military forces to penetrate and disable armored vehicles.

It is unclear what effect the border crimes meeting held by the Senate Judiciary Committee will have, but Paton, whose district in Tucson extends to seven miles north of the Arizona-Mexico border, is the prime sponsor of three pieces of immigration-related legislation.

The legislation criminalizes the harboring of illegal immigrants, increases penalties for smugglers that threaten smuggled immigrants with deadly force and expands sex trafficking laws to include coercive techniques such as blackmail, threats and the confiscation or destruction of identification and passports.

A representative with the U.S. Immigration Customs and Enforcement was scheduled to address the committee but did not appear at the meeting, which drew local and national media as well as casual spectators.

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CityNorth saga continues with Supreme Court filing

The saga over a 2007 deal by the city of Phoenix to give a $97.4 million tax rebate to a shopping mall developer was renewed Feb. 23 when attorneys filed more legal arguments with the Arizona Supreme Court.

The court is being asked to review a December Court of Appeals ruling that the tax rebate to help finance the construction of infrastructure of the CityNorth shopping mall violated state constitutional provisions banning the giving of gifts to and creating special laws for individuals and businesses.

The deal between the city and the Thomas J. Klutznick Company was challenged by the Goldwater Institute, which represented six small business owners, including Democrat state Sen. Ken Cheuvront.

The challengers argued the agreement violated the Constitution's gift clause by providing a benefit to the developer that was not afforded to other business owners.

Attorneys for the city responded that the agreement, which helped create parking at the mall, satisfied public-purpose requirements by providing increased tax revenue, job creation and decreased air pollution.

In April of 2008, Maricopa County Superior Court Judge Robert Miles rejected the arguments by Goldwater Institute attorney Clint Bolick and ruled the tax break was rational and satisfied public purpose requirements. Later, a three-judge appellate panel unanimously overruled his decision.

Judge Patrick Irvine wrote in a 41-page appellate opinion that the deal, struck to promote economic growth, was "exactly what the gift clause (of the Arizona Constitution) was intended to prohibit."

In an appeal filed on behalf of the CityNorth project, attorney Lisa Hauser argued the Court of Appeals decision erroneously dismantled an established precedent for testing the legality of public-private partnerships.

The 1984 precedent, established in Wistuber v. Paradise Valley Unified School District, is relied upon by both business and government interests to provide certainty that encourages business growth, wrote Hauser.

The economic downturn also adds urgency to need for a review of the Court of Appeals decision, she said.

"Government desperately needs economic development tools to stimulate revenues," Hauser said. "More than ever, business and government badly need predictability to restore economic health."

The argument is nearly replicated by Timothy Berg, a private attorney hired by Phoenix in 2007 to defend against the Goldwater Institute lawsuit.

Berg states that in the Wistuber case, the Arizona Supreme Court established that it is indeed constitutional to give public funds to private entities if a project advances a public purpose and is supported by "proportionate consideration."

The second Wistuber test is met because the city conditioned the rebate so that it would not spend more public money than it would receive from the development of CityNorth, wrote Berg, advising that the court has refrained from an "overly strict" interpretation of the gift clause.

Bolick said he didn't expect CityNorth to "walk away" from the Court of Appeals opinion and the $97.4 million. But he said the city's decision to re-enter the legal fight came as a "disappointment" because several Phoenix City Council members campaigned against the tax subsidy before casting votes in February to push for a Supreme Court appeal.

Bolick also questioned the city's use and incurred costs of hiring a private attorney while governments, including Phoenix, are grappling with severe budget shortfalls.

"Where they're finding the money in this economy to pay very expensive lawyers to appeal a decision that saves them $97 million is beyond me," he said.

Board votes to close three state parks; fate of eight depends on Legislature

As the Arizona State Parks Board convened to discuss closing 11 parks, board member Larry Landry wanted to make sure the distressed crowd knew he was on their side.

"The last thing any of us want to do is close any park or cut any program or cut any grant," Landry said. "The staff has been open to any idea, big or small."

But, he added, no idea has been big enough to offset the nearly $35 million the Legislature cut from the agency's budget for fiscal 2009.

Because of that, the board elected Feb. 20 to temporarily close Tonto National Bridge State Park near Payson, Jerome State Historic Park in Jerome and Florence's McFarland State Historic Park. They will remain closed through at least June 30.

Board members said the three parks were chosen because they were in disrepair and the time could be used to slowly renovate them.

Members rejected a motion to add Homolovi Ruins State Park near Winslow and Oracle State Park to the closures because representatives said the Hopi Tribe could help staff Homolovi and volunteers were trying to raise money to keep the Oracle park operating.

It held off on other parks while the Legislature considers a bill that would restore money cut from the Arizona State Parks budget. Depending on what the Legislature does, more parks could close in early March, members said.

Ken Travous, executive director of Arizona State Parks, said he expects more park closures.

"If we put off the inevitable, we've staved off the inevitable," he said after the meeting.

In addition, the board authorized the agency to transfer, furlough or lay off personnel, to cut operating costs and to draw money for operations from the Heritage Fund, which uses lottery proceeds to provide grants for parks, trails, historic preservation and wildlife conservation.

Arizona State Parks must cut $27 million by Feb. 28 and another $5 million by June 30, Travous said.

"We've been operating on a house of cards that has had a sledgehammer taken to it," he said.

The measure passed on a 3-1 vote, with Arlan Colton, the only board member opposed, saying he felt the board would likely end up closing the parks anyway.

"The Legislature has put us in an untenable position," he said in an interview. "Do you just bite the bullet or do you just let it keep going on and on and on?"

Still, Susan Secakuku, project manager for the Homolovi Park Project, said she was cautiously optimistic about the chances that her park could remain open.

"We feel wonderful that they took a measured decision regarding Homolovi," she said.

She and Dale Sinquah, chair of the Hopi Tribal Council's land team, told the board the Hopi would offer any help they could to keep open the park, which tribal members consider part of their ancestral homeland.

"These are trying times, and during trying times we need to think of innovative ways to keep things going," Sinquah said.

Meanwhile, representatives of governments and groups that received pledges of Heritage Fund grants objected to the decision to take away their money. Those cuts affected about 120 grants in all.

Dick Powell, mayor pro tempore of Casa Grande, held up a large representation of a check to illustrate his disappointment at losing $277,000 pledged for improvements to a rodeo venue.

"The grant was almost God-sent to us," he said later in a telephone interview. "I understand their situation, but the Heritage Grant is such an important thing to preserve Arizona history."

But board member Larry Landry said there was no other option.

"We can't give what we don't have," he said.

Tubac and Oracle parks escape closure – for now Click here: http://www.azcapitoltimes.com/story.cfm?ID=10517

Flagstaff-area family relieved as Riordan Mansion park gets reprieve Click here: http://www.azcapitoltimes.com/story.cfm?ID=10518

Tubac and Oracle parks escape closure

Tubac Presidio State Historic Park will stay open for now, but Carol Cullen, executive director of the Tubac Chamber of Commerce, knows she faces an uphill battle.

"We survived to live another day, but we're going to face this again soon," Cullen said after the Arizona State Parks Board decided Feb. 20 to close three other parks due to budget cuts.

"We feel like we accomplished what we hoped to accomplish today, and that was to get additional time knowing that it wasn't going to be much time," she said.

The board voted to close Jerome State Historic Park in Jerome, McFarland State Historic Park in Florence and Tonto Natural Bridge State Park near Payson until at least June 30.

Board members said the fate of Tubac Presidio and seven other parks recommended for closure depends in large part on legislation that would restore money cut from the Arizona State Parks budget. If the Legislature fails to approve the bill, H2088, more parks could close in early March, members said.

Cullen traveled to the Valley to address the board along with Susan Walsh, the Tubac chamber's vice chair. They said their group needs more time to raise money through a public-private partnership to help keep open Arizona's oldest state park, which preserves the first European settlement in Arizona and houses the state's first printing press.

"Our town slogan is, ‘Where art and history meet,' and we want it to remain that, not just, ‘The town of art,'" Cullen said after the meeting.

Alan Sokowitz, a Tucson resident who started the Web site www.seeitbeforeitcloses.com to call attention to the proposed closures, told the board it would be premature and shortsighted to close parks. Later, he said Tubac Presidio is closest to his heart because of its proximity to Tucson and its importance to Tubac.

"It would be unthinkable to go to Tubac and find that park shuttered," he said.

Meanwhile, another southern Arizona park dodged a bullet when the board rejected including Oracle State Park with those closed Feb. 20.

Members noted that community leaders were trying to raise money to keep the Oracle park operating.

Cindy Crupicka, the president of Friends of Oracle State Park, said the park is crucial to her community because visitors spend money in restaurants, gas stations and stores.

"The Oracle people need the park to keep their economy going," she said.

Both Crupicka and Sorkowitz said it's important for those who support the parks to let lawmakers know it.

"We are going to be redirecting our efforts to focusing on the Legislature, which I understand is a tough nut to crack," Sorkowitz said. "But if you don't go in there and swing you can't feel as though you've had any part in the solution."

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