New budget proposal surfacing in legislatureby Paul Davenport on May. 19, 2009, under Edge, Local, Special
PHOENIX — Republican legislative leaders have set the stage for Senate committee consideration Wednesday of a new budget proposal that includes privatizing several state prisons to help close a big revenue shortfall.
The Senate on Tuesday suspended rules in order to allow short-notice consideration of the proposal.
Leader said it’s a revised version of a plan endorsed recently by a House committee and is a joint proposal by House and Senate leaders hoping to intensify negotiations with Gov. Jan Brewer.
Senate President Bob Burns, R-Peoria, previously had said he wouldn’t have the Appropriations Committee consider a budget proposal unless he had enough votes in the full chamber to assure passage.
He indicated that’s not the case now.
“I changed my mind based on the fact that time is slipping away from us. I think we have to make some changes in our plans of actions,” Burns said.
Senate Appropriations Chairman Russell Pearce said the privatization proposal calls for transferring operations of several prisons to a private company in exchange for an upfront payment of $100 million to $200 million.
The Mesa Republican said the state would continue oversight of the prisons and save money on operations. State employees working at the prisons could transfer to other state prisons or find work with the new operators, Pearce said.
Pearce said other elements of the plan include cuts in funding for K-12 schools and having the state grab some vehicle license tax revenues now going to local governments. The local governments then would be authorized to use some of their impact-fee money to backfill for the lost money from the vehicle license tax, Pearce said.
Arizona’s tax collections have been hammered by the recession and the collapse of the housing industry, and the state faces a projected $3 billion shortfall in the fiscal year that begins July 1. Depending on what spending cuts are made, the budget could total approximately $10 billion.
Sen. Jay Tibshraeny, R-Chandler, said the impact-fee proposal is fraught with legal and practical problems. Cities and towns are now preparing their budgets and need to know what money they will have, said Tibshraeny, a former mayor of Chandler.