Losers few after state budget gets approval

Robbie Sherwood
Arizona Republic
June 18, 2006

This state budget was supposed to be easy.

The bad old days of recession and billion-dollar deficits of 2001-04 were a bad memory. A surging economy has driven revenues to a record $1.5 billion surplus.

But election-year posturing and deep divides among Republican legislative leaders and Democrat Gov. Janet Napolitano over virtually every issue with a price tag pushed the state to the brink of a shutdown.

Now it's over. And as painful and drawn out as the budget debate was, it's hard to find any losers.

The House and Senate overwhelmingly approved a $10 billion budget plan shortly after 1 a.m. Saturday that delivered huge investments in education, bioscience research, law enforcement and health care. Lawmakers also secured the largest single-year reduction in taxes in state history.


Want more roads and freeways? Got 'em. Want full-day kindergarten? Got it. Looking for money to help fight meth, diabetes, child abuse, obesity and a host of other social ills? It's there.

With only a handful of bills still alive, plus several potential ballot referendums, lawmakers could wrap up one of the state's longest-ever legislative sessions by the middle of this week. If the Legislature adjourns Wednesday, it will be the 164th day of the session. Here's how the winners and losers in the budget battle break down.

Winners:

Teachers and public schools. Napolitano and fellow Democrats won the perennial battle to expand full-day kindergarten statewide and scored every schoolteacher in the state a pay raise to boot.

Business community. Lawmakers cut taxes for the second straight year and threw down some serious cash, $35 million, to jump-start potentially lucrative bioscience and medical research through the 21st Century Fund. The plan includes a permanent income tax cut that grows to 10 percent and $300 million in two years, as well as a three-year timeout for the state's education property tax.


Senate President Ken Bennett, R-Prescott. He gave up on an artificial rule that required all the necessary 16 Senate votes to pass a budget come from Republicans. Instead, he worked hard to make the best deal possible and in the end was even lobbying reluctant House members to get on board.

The glassy-winged sharpshooter. This dangerous little pest just arrived in southern Arizona and could devastate the state's wine industry. A last-second push for $700,000 so the Department of Agriculture can fight the bugs didn't work out. The wine industry was a big winner this session with a new law allowing direct shipments to consumers, but it won't matter if the sharpshooter gets to the grapes first.

Probably winners, time will tell:

Napolitano. Napolitano got her way on full-day kindergarten and teacher pay and landed $95 million for a raft of other social-service, health-care and economic-development programs. But she had to eat income- and property-tax cuts that were both more than she and her now peeved Democrat base were comfortable with.

House Speaker Jim Weiers, R-Phoenix. Weiers was the last on board with the budget agreement among the House, Senate and Napolitano. And he had the hardest time rounding up support for the plan while quelling potential rebellions from Republican conservatives and moderates on either side. But he eventually delivered at least 31 Republican votes for the key budget bills and likely preserved his job as speaker.

Losers:

Sen. Jack Harper, R-Surprise. Harper led with his chin when he went from fiscal hawk to the pork king when he sold his support for a Senate budget plan for a $17 million road project in his legislative district. Harper had earlier criticized his colleagues for pork spending while holding a live baby pig.

When fellow lawmakers nixed the Jomax Road expansion, dubbed "the Harper Highway," Harper's support for the budget melted away.


House Minority Leader Phil Lopes, D-Tucson. House Democrats were the most upset with Napolitano for giving in to Republicans on a $300 million permanent income-tax cut and a three-year suspension of a state-levied property tax that will cost $200 million a year. While most of the 21 Democrats realized the deal was the best they were going to get, Lopes led a small band of five to six members on the far-left wing of his caucus to vote against nearly all the budget bills.

Too soon to tell:

Shared state revenues. Mayors and other city leaders were hitting the panic button over the income-tax cut because it threatened to reduce shared state revenues for public safety and other services. Cities wanted their 15 percent haul increased so the tax cuts wouldn't hurt their budgets. Instead, lawmakers promised to "hold cities harmless" in two years, when cities collect their share of this year's tax haul. The Senate tax cut includes a clause setting aside $717 million in 2009 so cities won't see a drop in revenue that year. But the "pre-appropriation" can be changed by future Legislatures and doesn't address what happens to shared revenues after 2009.