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Arizona House pushes on $11.8B budget

May 26, 2019

PHOENIX — House Republicans voted early Saturday to approve an $11.8 billion spending plan after also agreeing to $386 million in cuts in state income taxes and fees, largely to offset higher revenues anticipated elsewhere.

The Senate gave its own blessing hours later to some parts of the budget. But the heart of the package — the detailed spending plan and the tax cut package — remained stalled Saturday afternoon as a handful of GOP senators held out their votes over issues including requests for additional funding and changes in how the income tax cuts are allocated.

But the biggest delay is due to a spat over how much time people who were victims of sex assault and abuse as children should have to file suit against their assailants. Arizona currently bars suit after the victim turns 20; holdouts want not just a higher age but also a ``window’’ for those for whom the time limits already have expired to bring new legal actions.

That issue remained unresolved late Saturday.

The party-line vote in the House for the budget came after the majority Republicans rejected a series of requests by Democrats to put more money into what they said are priorities not being property funded. Rejected proposals include:

- Setting aside $261 million in state funds for full-day kindergarten programs;

- Providing $1.2 million for a dozen new counselors to help Arizona veterans get federal benefits;

- Allocating $10 million to cities and towns for census outreach to help ensure that “hard-to-reach’’ residents are counted;

- Setting aside more dollars for the Housing Trust Fund to help provide more affordable housing;

- Giving state employees six weeks of paid leave following the birth or adoption of a child;

- Putting $72.6 million into the budget to give raises to school counselors and social workers who are not getting the 20 percent pay hikes being promises to teachers;

- Adding another $84.4 million to increase the subsidies for child care for the working poor.

Republicans also refused to allow “dreamers’’ who are Arizona residents to attend state universities and community colleges at the same tuition rate as others who live in the state.

That had been the practice of the Arizona Board of Regents and several community college districts until the Arizona Supreme Court ruled last year the practice runs afoul of a 2006 voter-approved law which denies in-state tuition to those “without lawful immigration status.’’ And the justices said those in the Deferred Action for Childhood Arrivals program do not have “lawful immigration status’’ despite the Obama-era executive order allowing them to stay and work here.

GOP lawmakers also refused to put an extra $178,000 into the spending plan even though the chair of the House Appropriations Committee conceded probably would save the state far more than that in the long run. Republicans who opposed the requests argued thee was no more money to spend.

Yet House Speaker Rusty Bowers did find cash for some pet requests by some GOP lawmakers, though he sidestepped a question by Rep. Andres Cano, D-Tucson, of whether that was in a bid to secure their votes for the package. These additions include cash for some graduate medical education programs to help provide doctors in areas of shortage, opening up new trade offices in Israel and Mexico, $750,000 for research into “wearable technology,’’ $250,000 for dust suppression in the Sun Lakes area -- and even $200,000 for a nonprofit theater company in Maricopa County.

“I think Arizonans know what’s going on,’’ Cano said, calling them “back room deals.’’

On the other side of the ledger are cuts in individual state income taxes, largely fueled by increases in the standard deduction, changes in tax brackets and additional credits.

Cano called the move irresponsible what with the financial needs of the state.

“The public is outraged at the sad state of our public schools,’’ he said.

But Rep. Ben Toma, R-Peoria, bristled at referring to the move as a tax cut. He said it is simply offsetting the additional revenues Arizona expects to collect from residents through changes in federal tax law, changes that will increase state income taxes for some.

“Not doing this is a $300-plus million tax increase on the taxpayers of Arizona,’’ he said.

Rep. Randall Friese, D-Tucson, said that presumes that the state will, in fact, collect extra revenues. And he complained that the state was making a permanent cut in its income taxes even though those changes in federal tax law -- the ones are resulting in a windfall of new state revenues -- self-destruct after 2025.

Not all the extra money the state expects to collect is due to the changes in federal tax law.

State lawmakers, taking advantage of a 2018 U.S. Supreme Court decision, have decided to begin levying Arizona’s sales tax on online purchases made by state residents. That change is expected to generate another $85 million a year.

Rep. Joanne Osborne, R-Goodyear, who owns a family-owned jewelry store, said she’s glad the state is taking that step. Osborne said it levels the playing field with brick-and-mortar businesses like hers which have to collect the levy from customers.

But Friese said that’s no reason to cut state income taxes to make up for the new levy, any more than the state should reduce income taxes to account for an increased collection of sales taxes from local retailers.

The Democrat funding proposal that got the most debate came from Rep. Kelli Butler, D-Paradise Valley, who sought to provide funding for dental care for pregnant women who are on the state’s Medicaid program.

“Every single person in this room knows that any infection and disease during pregnancy can be dangerous to a developing baby,’’ she told colleagues. And Butler said there is a “clear relationship’’ between periodontal disease and pre-term and low-weight babies.

Butler said, delivery and first-year health care costs of a healthy baby in the state’s Medicaid program costs the state $5,000, versus $55,000 for a premature baby.

“So this makes sense from a fiscal standpoint and it makes sense from a health standpoint and it makes sense from a moral standpoint,’’ she said.

Rep. Regina Cobb, R-Kingman, who is a dentist, confirmed for colleagues that link between dental disease and pregnancy complications.

But Cobb, who chairs the House Appropriations Committee, said adding that money to the budget is not that simple. She said the funding for this program was not included in the package because the ask came tied to other funding requests that were not considered as important.

“And now we are stuck with the budget that we have right now,’’ she said. “There will be another day for this.’’

That excuse drew a sharp reaction from Rep. Charlene Fernandez, D-Yuma, particularly with Republican lawmakers just the other day voting to add $2.5 million to the budget to give to anti-abortion organizations to provide direct and referral services to pregnant women.

“We talk a lot about being pro life, about being a pro-life state, that we care about children,’’ she said. “Well, at some point you have to put your money where your mouth is.’’