Tucson CitizenTucson Citizen

State budget plan calls for taking money from schools, cities

PHOENIX – Republican legislative leaders’ budget-balancing plan includes “revenue enhancements” sweeping hundreds of millions of dollars from school districts and municipalities into the state general fund.

An outline released late Monday of the “joint draft budget proposal” said it includes sweeping $300 million from school district accounts deemed to have “excess cash balances.” And it would require “rebates” of $210 million of municipal impact fees paid on new development, including new homes.

The Republican legislative leaders also called for using roughly $1 billion of federal stimulus money and a total of $1 billion from new budget cuts and dipping into special-purpose funds.

In struggling for months to come up with a plan to close a 2009-2010 shortfall now projected at roughly $3 billion, the leaders had already presumed repeating some $500 million of budget cuts made in the current fiscal year’s budget.

The shortfall estimate of roughly $3 billion is based on spending of $11 billion. But spending won’t total that much because some spending will be reduced to close the budget gap.

The leaders’ proposed use of the $210 million of municipality impact-fee money was called a “one-time revenue budget option.”

It’s better to use the municipal money than to raise taxes, House Speaker, Kirk Adams, R-Mesa, said in a statement announcing the draft proposal. “These funds exist, in part, because of taxes imposed on citizens.”

Saying it would hurt the economy, Adams and other Republican legislative leaders have rejected Republican Gov. Jan Brewer’s proposal for a temporary tax increase to help balance the budget.

Ken Strobeck, executive director, the League of Arizona Cities and Towns, said the lawmakers’ impact-fee idea would be a “double-loser” because the fees won’t be available to pay for intended infrastructure improvements. Also, some of the money has already been spent and wouldn’t be available to be swept by the state, he said.

Similarly, school groups have said the money proposed to be swept from their “carry forward” accounts already is spoken for in many instances due to contracts or other commitments.

School districts are allowed to carry over into the next fiscal year up to 4 percent of the operating budget.

The outline of the proposal also stated that it includes a smaller lump sum reduction in K-12 school funding and continuation of the KidsCare health care program for children.

House Majority Whip Andy Tobin, R-Paulden, said it includes restoring at least some university funding cuts in order to preserve the state’s eligibility for stimulus funding for education.

The House and Senate Appropriations Committees scheduled a joint special meeting Tuesday afternoon to discuss using the municipal money.

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