The Senate on March 16 passed HCR2001, which if approved by voters in November, eliminates the tobacco tax-funded First Things First and redirects its $325 million to the state’s coffers.
The 17-13 vote was marked by passionate speeches by members of both parties: Democrats likened the action to theft, while Republicans insisted the program was mismanaged.
Legislators had been eyeing the Early Childhood Development and Health Board – known as First Things First – since last year after learning it had stockpiled hundreds of millions of dollars since 2006, when voters approved Proposition 203, the initiative that led to its creation.
“The Legislature did not have the courage to do the right thing and raise revenue to help prevent this kind of action,” said Senate Minority Whip Linda Lopez, a Democrat from Tucson. “The Legislature is stealing the money that the voters of the state of Arizona have said they want provided to young children and their families.”
But Sen. Ron Gould, a Lake Havasu City Republican, said it’s not theft.
“We are giving the voters an opportunity to have a redo on this to see whether they really want to confirm what they did after they have information on how the group has implemented the plan,” Gould said.
HCR2001 was the last piece of a 15-measure budget package that aims to close a $3.4 billion deficit in the current and next fiscal years.
The Senate had postponed voting on HCR2001 on March 11 and March 15 because of missing members.
Sen. Carolyn Allen, a Republican from Scottsdale, was absent on March 11. Then on March 15, Sen. Frank Antenori, a Republican from Tucson, was absent.
Both Allen and Antenori voted for HCR2001 on March 16.
But it turned out the Senate had one more vote than the 16 hands required to pass the bill.
Sen. John Huppenthal, a Republican from Chandler who had indicated he would be opposing the measure, eventually supported it.
Huppenthal had complained he didn’t think the measure, as currently drafted, would pass at the ballot.
“The fact that we are taking every single penny, I have a little bit of problem with that. You had a major initiative there and we are just seeking to nuclear-bomb it,” he earlier told the Arizona Capitol Times.
In explaining his eventual “yes” vote, he said he still has problems with the measure’s language, but he hopes that its passage by the Legislature would spur negotiations between First Things First and policymakers, perhaps leading to a compromise version of HCR2001.
“This is out so First Things First is going to have to come to the table and address the bureaucracy issues, too,” Huppenthal said, referring to complaints by some colleagues that its board created but another layer of government bureaucracy instead of all of the tobacco- tax money going directly to services for children.
“I always was open to the idea that we could do revisions after the fact. I’m trying to get people to start that negotiation,” he added.
Senate President Bob Burns suspected that negotiations might take place. He said the Legislature’s vote on HCR2001 puts lawmakers in a better position if they chose to negotiate with the board, but it’s still up to lawmakers to decide whether to do so or not.
“It could go all the way from First Things First going away completely. The money stream would be the thing that would be negotiated possibly among members,” Burns said. “We could negotiate where the money would end up going and not have the additional bureaucracy that has been created by First Things First. That’s an option.”
The board had offered to loan its money to the state to help balance the budget deficit.
In a statement, the board said the loan offer has been on the table since December. It also emphasized that approval by voters would be needed for its funds to be used to help with the budget crisis as the law that created it prohibits supplanting. That is, the board’s money cannot be used to replace funds that have been cut from state programs.
“Voters created this initiative, they approved it in 2006, and we have every reason to believe that they will uphold their commitment to Arizona’s youngest children in November,” said Steven Lynn, the board’s chairman.
The program is designed to provide early-development and basic health care-screening programs for children under the age of five.
Proposition 203 had established an 80 cents-per-pack tax on cigarettes sold in the state to pay for such programs.
Nadine Mathis Basha, founding chairwoman of First Things First, said the program established 31 partnerships across the state that were set to provide for the needs of children whose parents either couldn’t afford basic health services, or in many cases, couldn’t find them.
Basha said she is hopeful that the Legislature will accept a loan and reconsider its decision. Barring that, however, she said there would be a political campaign to preserve the program.
“Eddie (Basha) and I are absolutely committed to preserving this money,” she told the Arizona Capitol Times.
Sen. Jay Tibshraeny of Chandler was the lone Republican who voted against HCR2001. He did not explain his vote on the floor.
Gould outlined a recurrent complaint among conservative Republicans against First Things First – that it created a bureaucracy and that it accumulated hundreds of millions of dollars and did not spend any of it for children’s programs until a Senate panel began investigating where its money was going. The group was, in fact, following timelines set out by the proposition that created the program.
But Senate Minority Leader Rebecca Rios said the action goes against the voters’ will.
“We are basically saying in I think a somewhat arrogant and offensive manner, ‘Voters, you really didn’t know what you meant. We are going to give you another shot at this because we want the money’.”
Allen, the chairwoman of the Senate Health Accountability and Reform Committee, said she had warned the group about this day.
“Guys, I told you and you did not listen,” she said.
Allen read a letter she wrote last year criticizing the First Things First Board for hesitating to help mitigate what was then a brewing crisis in the child care industry.
Last year, the Legislature cut in half the general fund allocation for the Department of Health Services Division of Licensing Services and gave the agency the authority to increase its licensing fees to make up for the reduction. The resulting proposed license fee increases were going to hit the child care industry hard.
Will Humble, director of the Department of Health Services, had asked help from First Things First, requesting a grant or scholarship from the fund that the board controls. He failed to persuade board members to do so.
Elliott Hibbs, former executive director of First Things First at the time, then explained that that its money should not be diverted away from the purposes for which the program was created. He said state law does not permit the money to be used to supplant state funding.
Allen, in her letter, wrote, “I am shocked and disappointed with First Things First’s refusal to help mitigate skyrocketing child care licensing costs.
“It is disgraceful and shameful that they have been watching this situation unfold, and (they) don’t help. We’re talking about $2 million (to offset the reductions to the Licensing Division). If they have that kind of money and are still willing to sit on their hands and say this is not their role, then what is their role?” she said.
Allen had noted that the board was missing out on an opportunity to act on something that was in line with its mission and was putting its future in jeopardy.
The board, she noted, should be cautious about leaving families and child care centers “out to dry or I could see this going back to the ballot and letting the voters decide.”