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House leaders propose budget plan

The Associated Press

The Associated Press

PHOENIX – House Republican leaders on Monday proposed to erase a projected $1.9 billion revenue shortfall with spending cuts for state agencies, raids on special-purpose funds and borrowing to pay for building new schools.

There was no immediate indication that other legislative factions or Democratic Gov. Janet Napolitano would accept the House Republicans leaders’ proposal, as high-level strategy meetings continued late in the day.

However, a state government shutdown is not an option, said House Speaker Jim Weiers, R-Phoenix. “I hope that we’re able to get this thing done, not only for our sakes but for the people of Arizona.”

The Republican-led Legislature faces a June 30 deadline to approve a budget for the fiscal year that starts July 1.

Because of continuing slumps in housing and consumer spending, the state’s budget has been hammered by tax collections falling far below levels anticipated as recently as April.

The next budget would normally approach $11 billion. However, the latest agreed-upon estimate for the shortfall is approximately $1.9 billion and legislative budget aides’ calculations point toward one of $2.3 billion.

The biggest elements of the House Republican leaders’ plan include $505 million in lump sum reductions in agencies’ spending, $391 million in transfers from special-purpose funds and $501 million of borrowing for school construction.

Other large elements include using $106 million of highway money to pay for the Highway Patrol – a diversion allowed because it’s a transportation function – and delaying $76 million of K-12 school building repairs. Finally, there would be an $18 million reduction in revenue sharing with local governments.

Weiers didn’t release full details of the proposal, but he said it was responsible because it protects priorities such as spending on K-12 classroom education and keeps borrowing to a minimum to avoid burdening taxpayers with debt.

“We’re making sure that children are protected and public safety is not affected in any way,” Weiers said.

Said House Majority Leader Tom Boone, R-Peoria: “There is no classroom reduction, period, whether it is teacher salaries, whether it is supplies, whether it is instructional aides, whether it’s computers, textbooks, whatever.”

Weiers said whether the agency spending cuts could force layoffs of any state workers would depend on decisions made by managers to implement the lump sum cuts and how fiscal conditions evolve.

Gov. Janet Napolitano’s spokeswoman said Napolitano’s office was still reviewing the House Republican leaders’ proposal but that some elements caused concerns. “There’s not a lot there to like,” said Jeanine L’Ecuyer.

Several Senate leaders declined comment but Senate Majority Whip John Huppenthal, R-Chandler, called it “an excellent budget.”

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