Lawmakers take a tumultuous path to a state spending plan

Hank Stephenson//June 24, 2013

Lawmakers take a tumultuous path to a state spending plan

Hank Stephenson//June 24, 2013

As a nearly powerless minority at the state Capitol, Democrats in years past have earned a reputation as watchdogs over the majority, annually denouncing the other side for drafting budgets behind closed doors and bringing the proposals to a vote without adequate time for vetting.

This year, the tables were turned. Five months into the session, conservative Republicans watched helplessly as a coalition of Democrats and moderate Republicans took control of the budget process, including a controversial plan for the expansion of Medicaid. The usual rules were suspended. Chaos reigned.

And when an $8.8 billion fiscal 2014 budget that included Medicaid expansion was finally approved, many Republicans complained bitterly that the democratic process had been hijacked.

One thing was certain: This was no normal way to pass a state spending plan.

Anger, but few surprises
The budget signed by Gov. Jan Brewer amounted to a spending increase of $129 million, or 1.5 percent over the previous year.  It was praised for the additional money it provides for Child Protective Services and the arts in Arizona, among other things. In the end, it wasn’t much different than a budget approved more than a month earlier by the state Senate.

But critics lambasted the spending increase and said there was no time during the chaotic final hours of the session to assess where all the money was going. They criticized Brewer for calling an impromptu special session to settle the budget rather than letting lawmakers handle it themselves. The House and Senate Appropriations committees, which normally spend days or weeks going over budget details, had no role in the final process. And when the coalition refused to engage in floor debate or even answer technical questions about the final plan, the opposition was furious. Hour after hour, Republicans attacked other Republicans as Democrats looked quietly on.

House Minority Leader Chad Campbell, D-Phoenix, one of the most vocal critics of the opaque process by which Republicans have approved budgets in recent years, said nothing in the budget should have surprised any lawmakers. He noted that legislators received Brewer’s budget proposal in January and had been haggling over the details publicly and privately ever since.

Members of the coalition said it was never their intent to steamroll their way through the legislative process. They said the Republican leadership was stalling, hoping to peel off members of the coalition to subvert the will of the majority of both chambers.

“We felt our options had become kind of dead-ended at that point,” Campbell said.

Minor boost in funding
But for all the chaos and rhetoric surrounding the state budget, the final product, with the exception of Medicaid expansion, seems to be something most lawmakers and stakeholders can live with.

Most core government functions saw at least a minor boost in funding for the first time since suffering devastating cuts during the recession years.

Interest groups representing some of the largest spending areas say the budget was commendable, and although it was not perfect, it was better than in past years.

Dana Naimark, president of Children’s Action Alliance, said the budget was the first in years that really addressed the cuts to Child Protective Services, even if funding for the group’s priorities still isn’t at pre-recession levels.

“We were pleased with the level of funding and the interest in really focusing on better results from legislators. We were very pleased with the outcome of the budget as far as CPS and child care… It was a good year for some rebuilding and laying the foundation for better things for kids to come,” she said.

The numbers in the coalition’s budget weren’t all that different from either the Senate-approved budget or the budget being proposed by House Republican leadership.

The Senate approved a spending plan of $8.824 billion, while the House proposed a budget with an $8.778 billion bottom line. Brewer originally asked for $8.907 in spending. The coalition budget spends $8.808 billion for fiscal year 2014.

In other words, the budget is about $30 million more than the lowest spending proposal offered and $99 million less than the largest budget proposal offered.

Nothing illegal
Barry Aarons, a veteran Capitol lobbyist who didn’t lobby either way on Medicaid expansion, called the coalition budget a compromise between what the two chambers and the governor were proposing. But he said the means by which the coalition approved the budget troubled him.

In his more than 30 years at the Capitol, Aarons he has seen it all.

But suspending the rules and bringing an entire budget straight to the floor, and then refusing to answer questions about it, was new even to him.

“I’ve seen (lawmakers) suspend (committee) hearings, I’ve seen bills that were sent directly to Rules and nothing else. I’ve seen a lot of things like that. But I’ve never seen where we’ve suspended rules and sent budget bills directly to the floor,” he said.

Aarons was troubled not only by the rules suspension, but by the coalition’s refusal to answer questions on the floor or engage in debate about the budget.

“When I was growing up in the business, it was considered an insult to refuse to yield to questions,” he said, noting that by refusing to engage in debate, the coalition risked breaking whatever civility was left at the Capitol.

Aarons isn’t alone in saying the process by which the coalition accomplished its goals was damaging to the institution.

Those who voted against the budget and Medicaid expansion say the governor and coalition harmed the legislative process in several ways: by calling a special session to overcome the intentions of leadership, by suspending the rules of the House and Senate so the bills skipped the Appropriations and Rules committees, and by refusing to debate the issue on the floors of each chamber.

House Speaker Andy Tobin, R-Paulden,  and Senate President Andy Biggs, R-Gilbert, agree that this year’s budget process sets a bad precedent that could lead to future legislatures following the same path on a budget or a more mundane issue.

“One of my biggest concerns is that you have an institution that has been actually horribly manipulated,” Biggs said. “We have a member of our caucus who likes to say, ‘Don’t show the monkey how to get the coconut.’ Well now we’ve shown the monkey how to get the coconut. And because of that, you have an opportunity next year to see the same kind of fracture.”

Tobin said the move to call a special session and suspend the rules was drastic and unnecessary, and it sets a bad precedent for the Legislature.

“I don’t waive the rules, I play by the rules… Clearly there was a pathway for this to have occurred without that (special session). I don’t think that’s good for the institution,” he said.

But Paul Bender, a constitutional scholar and Arizona State University professor, noted that in calling a special session and suspending the rules of each chamber, Brewer and the bipartisan coalition of lawmakers were using the powers provided to them in the state Constitution and legislative rulebook.

“Brewer is entitled to call a special session and they voted on (the budget) and the coalition won. So I can understand why the Republicans are mad because the Republican governor defied the majority of her caucus, but there’s nothing illegal in what happened,” Bender said.

Unique circumstances
Members of the coalition supporting the governor say it took a unique set of circumstances, including a near flat-out refusal by legislative leadership to hear the issues, to bring the coalition together and force them to break the gridlock by suspending the rules and moving the budget package forward before the new fiscal year begins on July 1.

The final straw for the coalition members and Brewer came when Tobin announced without notice that the House would not meet on Wednesday, June 12, and would reconvene the following day to take up the budget process again.

But the stress had been building for months, as Republican leaders repeatedly put off a vote on a budget that included Medicaid expansion.

The first movement from legislative leadership on the budget came in March, when the House Appropriations Committee held an informational hearing on Medicaid expansion but did not take a vote.

Then in the middle of May, the Senate moved forward with a budget proposal that did not include Medicaid expansion initially, but after clearing Appropriations and Rules, was amended on the floor to include expansion.

That budget package never got a hearing in the House, though the House Appropriations Committee did hear the portion of the package that contained Medicaid expansion. The committee voted that portion of the budget package down on June 10.

The next day, Brewer called the Legislature in for a special session, and coalition members introduced a whole new budget, which was mostly based on the Senate budget package.

Members of the coalition said the several false starts offered plenty of opportunity to vet the budget and Medicaid expansion. They said further delay would have only hurt the state agencies that need a plan in place before they can set their own budget for the upcoming fiscal year.

Choosing policy over politics
Aarons agreed that anyone could have had plenty of time to learn about all aspects of what was included in the budget. He said the argument made by some conservatives that they didn’t understand what the budget contained was probably disingenuous.

“But I still think there are certain protocols, certain kindnesses and certain collegiality that needs to maintained in or for the place to work effectively, and I think we lost some of that,” Aarons said.

He said it was especially troubling that none of the budget bills went through House caucuses and Medicaid expansion didn’t receive a hearing in the Rules committees, which check if bills are constitutional and in proper form, in either chamber. Although lawmakers often disregard the advice of the Rules attorneys, this time, they didn’t even know their legal opinions.

“It certainly did take away from the inherent transparency of the process. It took away from the opportunity to have debate and discussion, and I don’t want that to set a precedent for members who don’t want to talk about something to use that to say ‘I just don’t want to debate this,’” he said.

But Chris Herstam, a longtime lobbyist and former Republican lawmaker who has served in various capacities under Republican and Democratic governors, said he doesn’t think the same scenario could be duplicated unless the same “bizarre politics” were at play again in a future session.

“This was a one of a kind appropriations process for a one of a kind session,” he said.

Herstam, who lobbied on behalf of Medicaid expansion this year, noted that the legislative session and special session went until mid-June and allowed plenty of opportunity for everyone to weigh in or ask questions about the budget.

“And as for the whining that is taking place as to the lack of debate on the House floor, come on, get real. The public doesn’t follow debates on the House floor. That is for political junkies. Most of the time it is grandstanding to party activists,” he said.

Unlike Aarons, Herstam thinks the process actually benefited from the coalition strong-arming the Republican leadership to pass its agenda through both chambers.

He said by choosing policy over politics, the bipartisan coalition broke the stranglehold that Republican leadership has on the legislative process, and opened the door for Republicans and Democrats to work together on less contentious issues in the future.

“I hope it taught Republican leadership to respect bipartisan wishes a bit more, and if they are more respectful, the need for another unique set of circumstances will not be necessary,” Herstam said.


Budget highlights

On June 17, Gov. Jan Brewer signed the budget that was passed earlier this month by a bipartisan coalition of lawmakers over the objections of Republican legislative leaders.

There was little doubt that Brewer would sign the entire $8.8 billion budget, as she orchestrated its passage through the Legislature in a special session.

Here are highlights of the budget:

• It keeps intact the state’s $450 million rainy day fund.

• General fund spending of $8.8 billion is 3.4 percent more than in fiscal year 2013.

• Budget will be structurally balanced by fiscal year 2016, with a $100 million surplus.

• Medicaid plan extends coverage to 240,000 of Arizona’s working poor and ensures that 63,000 Arizonans don’t lose coverage on January 1, 2014.

• Pays public school inflationary costs of $82 million.

• Adds $3.6 million for school safety.

• Introduces performance funding to the K-12 system.

• Finishes UofA medical school in downtown Phoenix at a cost of $8 million.

• Adds 200 additional CPS caseworkers and support staff.

• Provides an additional $69.1 million for child welfare and protection services.

• Adds $17.1 million for programs to aid developmentally disabled.

— Source:  Governor’s Office.