Leading Republican lawmakers are cheering Wednesday’s passage of a $6.4 billion budget they believe starts to address Arizona’s fiscal problems while reducing the pressure to raise taxes in 2004.
Now, those lawmakers must wait to see if Gov. Janet Napolitano will agree, as she remained mum Thursday on whether she might veto all or part of the package to push for additional spending.
GOP leaders of the Senate and House said the plan already includes more money than they wanted to spend while resolving a predicted $1 billion deficit. But Senate President Ken Bennett, RPrescott, said the outcome of lengthy, tense negotiations means that most state agencies would avoid the types of budget cuts imposed in 2002.
"I think a lot of individuals and families in Arizona understand the concept of having to live on this year what they lived on last year," Bennett said. "I think it’s a very positive accomplishment to give most of the agencies what they received last year, plus growth and inflation in key areas of education and health care."
The adopted plan rejects higher levels of borrowing proposed by Napolitano to support a $6.8 billion budget for the state General Fund. Bennett said Napolitano’s strategy would just keep adding to the revenue deficit, instead of shrinking the gap as the legislative plan intends to do.
"If you don’t cut the deficit, then you are really talking about a tax increase on the citizens of Arizona in the very near future," Bennett said. "The only way you start to get out of a hole is to stop digging."
But House Speaker Jake Flake, R-Snowflake, acknowledged the Legislature still faces another challenge next year, as the predicted deficit at the start of negotiations for fiscal 2004-05 will be at least $380 million.
The House was able to act late Wednesday after Flake and other leaders promised to sponsor a follow-up package of bills that would clean up some language mistakes, but also would include some policy issues excluded from the budget plan.
Napolitano has until Wednesday to use her veto powers on the budget package. She’s likely to decide by Monday, though, because she’s scheduled to travel to a meeting of governors from Western states to make a major speech on forest health.
"Right now, my intent is to act before I go," Napolitano said
Thursday. "We’re in the process of going line by line through what passed, looking at the so-called ‘trailer’ bill to see what was thrown into that. I anticipate we will have it before we leave for Montana."
One of the most vocal critics of the budget plan said the governor probably will have to accept it because the new fiscal year starts in 18 days.
"At the pace at which Republicans work, we couldn’t get it back until December," said Rep. John Loredo of Phoenix, the House Democratic leader.
The fate of the "trailer" bill is much less certain.
Senate Democrats said they aren’t willing to accept some changes, including an additional $4 million budget cut to the state Department of Economic Security and a tax break that would benefit some types of multistate corporations.
"There’s nothing in that trailer that we really, really need," said Sen. Pete Rios, DDudleyville. "So we can just let it go."