State layoffs, education cuts loom in Arizona budget fix
by The Associated Press on Jan. 31, 2009, under Education, LocalThe Arizona Senate has approved a Republican plan to close the state’s $1.6 billion budget shortfall.
The Senate’s 16-12 vote of the final bill in the six-bill package came at 11:59 p.m. Friday. The House gave preliminary approval to the package early Saturday morning.
Passage by both chambers would send the package to Gov. Jan Brewer.
The package cuts spending midyear, sweep dollars from special-purpose funds and use federal stimulus dollars.
At nearly 16 percent, Arizona’s shortfall in its $9.9 billion budget is the biggest by percentage of any state in the current fiscal year.
The plan’s cuts and sweeps force layoffs and short-term furloughs for state workers, close some state parks, eliminate a welfare program for disabled people waiting for Social Security benefits and require low-income people getting subsidized health care to pay new monthly premiums.
Other cuts would force universities to increase class sizes and shutter some academic units, and K-12 public schools also would have to tighten their belts.
The plan balanced “the needs of Arizona with the current fiscal crisis,” said House Appropriations Chairman, Jon Kavanagh, R-Fountain Hills. “There are painful cuts but none are lethal, so it appears.”
Lawmakers went along with Brewer’s last-minute request for $18 million of changes, dropping some proposed cuts of funding for social programs and health care and replacing them with sweeps of money from an environmental cleanup fund and other pots of money.
In other last-minute moves, lawmakers settled on a nonbinding directive that school districts focus funding cuts on administrative costs and decided to strip the 21st Century Fund, a research grant program, of its $22.5 million funding.
Legislative Democrats argued that the Republicans’ cuts were premature and unnecessary because Arizona will get more than $500 million in stimulus money. Republicans argued that the state can’t wait to stanch spending that it can’t afford.
Key points of the legislative budget-balancing plan:
• Lump-sum cuts and salary reductions for state programs and agencies. To find the personnel savings, agencies have discretion to decide whether to use layoffs, furloughs or vacancy savings.
• University funding. Cut by approximately $140 million. Cut is smaller than an early $243 million set of options that included sweeps from special-purpose funds and larger than $100 million offered by Board of Regents and university presidents.
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Budget plan
Key points of a legislative budget-balancing plan:
- Lump-sum cuts and salary reductions for state programs and agencies. To find the personnel savings, agencies have discretion to decide whether to use layoffs, furloughs or vacancy savings.
- University funding. Cut by approximately $135 million. Cut is smaller than an early $243 million set of options that included sweeps from special-purpose funds and larger than $100 million offered by Board of Regents and university presidents.
- Stimulus money. The package anticipates the state receiving $500 million in federal economic stimulus money, chiefly in increased federal Medicaid reimbursements to the Arizona Health Care Cost Containment System, known as AHCCCS, for health care for the poor.
- Health care. Make AHCCCS enrollees pay new monthly premiums. No change to existing KidsCare program for health care for children or a smaller program for parents, both of which had been proposed for elimination.
- K-12 public schools. Funding to districts and charter schools would be cut by approximately $130 million. Major elements include a $21 million cut of annual funding to districts for computers and other equipment and a $98 million reduction accomplished by not overriding a constitutional spending limit for districts. Neither reductions apply to small-enrollment districts. Districts get new discretion to spend their remaining equipment dollars either for that purpose or regular operations.
- Transfers. Sweep money from special-purpose funds into the General Fund, including $130 million from the budget stabilization fund, which is a rainy day reserve. Other examples: $104 million from a freeway project acceleration fund, $17.5 million from the housing trust fund, $10.1 million from the state lake improvement fund, $20.8 million from the job training fund and $5 million from the arts endowment fund.
- Building projects. Delay and cancel some projects. Examples: Postpone a $10 million expenditure for a southern Arizona veterans home by one year. Withdraw $1.2 million which had been appropriated to renovate the old state health lab. Withdraw $3.2 million which had been appropriated for replacing prison cell doors and locks.
- Miscellaneous. Eliminate the General Assistance welfare program. Authorize the Department of Revenue to establish a temporary tax amnesty program. Increase monthly offender probation fees to $65 from $50. Increase monthly juvenile probation fees for parents to $100 from $50.
SOURCE: Briefing by Arizona House leaders, bill summaries by legislative staff.
