AZ Senate OKs GOP plan to balance budget

PHOENIX (AP) - The Arizona Senate voted along party lines Friday, approving a Republican budget-balancing plan that cuts spending for health care, education and other services to close a shortfall without resorting to additional borrowing.

The Senate action completed legislative action on the 13-bill package negotiated by Republican legislative leaders and Republican Gov. Jan Brewer. The House approved the bills earlier Friday during a five-hour floor session that began at 3 a.m. after paperwork delays.

Brewer is expected to act on the bills this week.

Republican legislators said the plan provides the state with an honest budget that eschews borrowing and gimmicks used along with spending cuts and federal stimulus dollars to help balance recent budgets during the state's ongoing budget crisis.

"We used a bunch of ways to avoid the inevitable ... instead of ripping the Band-Aid off and letting the wound heal," said Sen. Frank Antenori, R-Tucson. "Arizona is going to live within its means and not leverage and borrow and put our kids into debt."

Democrats and advocates for education and social services criticized the budget and the process that led to its approval within a day of its unveiling Thursday afternoon.

"I know it's a balanced budget. But when I look at it, I see that it's been balanced on the backs of children and vulnerable families," said Sen. Leah Landrum Taylor, D-Phoenix.

The plan was the product of weeks of closed-door negotiations between Brewer and Republican legislative leaders who periodically briefed their rank-and-file members while withholding details from the public and Democratic lawmakers.

"The people of Arizona would love to know what the conversations about the budget were," said Senate Minority Leader David Schapira, D-Tempe.

Republican Sen. Ron Gould of Lake Havasu City bristled at the criticism of the budget, which he called "the day of reckoning" for previous overspending. "Vote it. Sit down. Shut up and deal with it," Gould said during voting on the last bill.

Democratic Sen. Steve Gallardo, D-Phoenix, said he wouldn't "shut up" because Republicans didn't consider alternatives to spending cuts.

Under the plan's $500 million of cuts to Arizona's Medicaid program, its enrollment would decrease by nearly 140,000 people within the next year if the state implements sign-up freezes and other changes that Brewer outlined in an application submitted Thursday to federal officials. Brewer previously proposed a 280,000 enrollment reduction that drops people currently enrolled.

Other predicted changes include cancellation of most day care subsidies for low-income Arizonans, higher tuition for university students, larger class sizes in K-12 schools and closing of some state parks.

Democrats also said the budget has at least one gimmick - the shift of some state costs to local governments that might raise property taxes to compensate.

Brewer pronounced the budget a compromise and a win. The education cuts are deeper than those she proposed in January but shallower than a budget plan approved March 17 by the Senate.

"Given the situation we are facing and negotiating with the Legislature, I was successful," Brewer said in an interview Thursday night. "I'm never happy about the cuts to K-12 but it certainly shields our schools from the worst of the cuts."

The Legislature's budget staff listed more than $1.1 billion in spending cuts in the new plan, or roughly $400 million more than Brewer's January proposal and $200 million less than the Senate version.

Spending in the next fiscal year would total $8.3 billion. That's below the current year's $8.5 billion and Brewer's proposed $8.9 billion but above the $8.1 billion approved by the Senate.

The plan's cuts and other steps would close a shortfall of nearly $1.5 billion. That shortfall amount includes $332 million of red ink left over from the current fiscal year. Hammered by the recession in general but also the housing industry's collapse, the state is about to enter its fourth fiscal year in crisis.

The approximately $450 million of education cuts listed by the legislative budget staff would be spread among K-12 schools, community colleges and universities. Those reductions total approximately $130 million above amounts proposed by Brewer in January and about $100 million below the Senate's cuts.

Brewer and her staff said the K-12 education cuts were actually $50 million lower than reported by the budget staff.

The Medicaid cutbacks are expected to be challenged in court.

Critics contend the Medicaid reductions violate a state constitutional protection for voter-approved ballot measures that increased Medicaid eligibility.

Supporters of the plan disagree, saying that the ballot measures don't require that eligibility levels exceed available funding.

The plan also opens the door to restore Medicaid coverage for certain transplants.

It gives Brewer the authority she requested to restore transplant coverage that was ended last year in another budget-balancing plan, resulting in months of controversy.

"I am convinced this will bring the transplants back," said Rep. John Kavanagh, R-Fountain Hills.Democrats expressed doubt, saying the transplant provision isn't binding.

The House defeated Democratic amendments to directly restore coverage, either with state funding or using private donations. "People's lives are at stake," said Rep. Anna Tovar, D-Tolleson.