PHOENIX – A sharply divided Arizona Senate early Thursday narrowly approved a bipartisan budget plan negotiated by Senate leaders and backed by Democratic Gov. Janet Napolitano as lawmakers struggled to solve the state’s budget crisis.
The next key step in that process could come as early as midday Thursday with formal House votes on a rival plan by House GOP leaders.
Both plans would erase a big revenue shortfall that has some lawmakers worried about a possible partial state government shutdown after the current fiscal year ends next Monday.
The Senate approved the $9.9 billion plan negotiated by the chamber’s top leaders, with the 16-10 vote on the package’s main spending bill (HB2209) being the minimum needed for passage. That was after the leaders spent hours fending off hostile amendments offered by critics who protested time limits on debate.
“I think this disenfranchises me and the people I represent,” said Sen. Ron Gould, a Lake Havasu City Republican who offered more than a dozen unsuccessful amendments to change the plan.
Senate Democrats and four GOP senators supported the plan, while other Republicans opposed it.
Senate President Tim Bee, R-Tucson, said the plan was a compromise whose mix of budget tools was dictated by circumstances, including the fast-approaching end of the current fiscal year.
“We had very, very diverse opinions about how to resolve the budget this year,” Bee said. “This is the best package we were able to pass.”
“There’s no other budget that could get 16 (votes),” said another supporter, Sen. Paula Aboud, D-Tucson.
With the contentious floor session’s start delayed by paperwork until shortly before midnight Wednesday, senators didn’t finish work until 5:30 a.m.
The Senate earlier suspended advance-notice requirements to enable leaders’ bipartisan proposal to be considered later in the day. Hours later, lobbyists and other advocates crowded the Senate lobby as they waited for printed copies of bills.
“This is absurd to run a $10 billion business this way,” said Tim Schmaltz, a lobbyist for a coalition of groups trying to protect social services from cuts.
The Senate leaders’ plan now goes to the House for possible consideration after what was expected to be a close vote on the House Republican leaders’ proposal.
While both plans would erase a revenue shortfall of about $2 billion, or about a fifth of the budget for the fiscal year that starts Tuesday, there were key differences in their respective approaches.
The plan pushed by House Republican leaders would rely on more spending cuts and less borrowing than the Senate version, also backed by House Democrats.
Tacked onto the Senate plan: a Napolitano-backed $1 billion borrowing package for university building projects that would be financed by Arizona Lottery proceeds. Supporters call the package needed to enhance and maintain the universities while detractors said the added debt would put the state in a fiscal hole.
“For fiscal and social conservatives, there is much at stake,” said Sen. Jack Harper, a Surprise Republican who opposed the package.
Most of the cuts in the House Republican leaders’ plan come in lump sum reductions that agencies would decide how to implement. Specific cuts include $25 million for biotech research.
The Senate’s senior budget writer on Wednesday raked the Senate leaders’ plan, saying it sets up the state for devastating spending cuts or burdensome tax increases a year from now.
“We’d be better served if we were to stop up to the plate now and to make much more significant reductions now,” said Senate Appropriations Chairman Bob Burns. He unsuccessfully tried to have the plan titled “the Bankrupt Arizona Act.”
Burns, R-Peoria, at one point halted his committee’s hearing on the Senate leaders’ plan, demanding that supporters explain how the state would cope a year from now with a shortfall of $1 billion or more.
When the hearing resumed, the Legislature’s budget director said the state sales tax would have to increase by a penny on the dollar or the income tax by at least a percentage point to cover a $1 billion shortfall.
Sen. Jorge Garcia, D-Tucson, noted that nobody has proposed a tax increase to cover the coming year’s shortfall and said Napolitano will present lawmakers in January 2009 with a balanced budget proposal.
“We have to work through it,” Garcia said, referring to the state’s fiscal troubles that have been blamed chiefly on tax collections falling below expectations due to the poor economy and on increased state spending.
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