SUM UP
The
adjournment sine die of the third special session of the forty-ninth
legislature on August 25 was not the cessation of labor. Since the Governor
then had ten days (not counting Sunday) to dispose of the budget bills already
sent to her, negotiations among the four caucuses and the Governor continued
over the next week and one half.
There
were a number of matters discussed, but the main object was to find 16 and 31
votes from the entire legislature – not just from the Republican members – to
place a sales tax increase proposal on the ballot in December of this year.
In the
end no deal was achieved and the Governor vetoed S.B. 1025, which included the
repeal of the equalization property tax, and line item vetoed well as some cuts
to K-12 and the Department of Economic Security. She then signed the remaining
bills into law.
No deal
on the sales tax was achieved primarily because the Democrats would not buy in
unless the Republicans gave up on repealing the equalization property tax. They
wouldn’t, so no go.
The
vetoes created some technical problems that Governor Brewer would like fixed by
the end of this month in another special session. But the real issue is the
sales tax increase and what to do next about the State budget morass.
The
budget now in effect is said to be more in balance than the previous one, but
it is still no cigar. With revenues for FY 2010 estimated to be $7.4B
supporting an appropriation of $9.7B there is an obvious problem. Even with
federal stimulus money (which is one-time) there will be a significant shortfall
remaining in the FY 2010 budget. Opinions on exactly how far out of whack the
FY 2010 budget is are all over the place, but $1B is a reasonable number.
Obviously,
Arizona must get more money into the game and we owe Governor Brewer much
gratitude for continuing to fight for a tax increase. We also owe her kudos for
her successful efforts to protect university fund balances, SPEED, our base
budgets to the extent possible, and her award of $154M of Federal Stimulus
money to the universities.
The significant issues for the
universities contained in the budget signed on September 4 are as follows:
* An additional cut of $40M to the university system ($15.8M
UA), taking us down to the federal MOE level.
* A system-wide rollover of $100M from FY 2010 to FY 2011
(effectively an appropriations delay from May and June of 2010 until September
of 2010).
* A system-wide mandate for a uniform accounting system.
* A requirement that the universities report the names and
costs of invited paid speakers to the JLBC not later than March 31, 2010.
* The ending of the authority of the Department of
Administration to offer health insurance to domestic partners and non-full time
students over 23. (We are still talking to DOA about how this will be
implemented for this contract year).
* A reporting requirement that moves toward funding enrollment
growth only for in-state students.
* A one year suspension of the 2:1 match rate for AFAT.
* Provisions affecting the Leveraging Educational Assistance
Program (H.B. 2012).
We may see several more special
sessions before the next regular session in January. At some point I expect
reality to intervene and taxes to be raised. Whether they will be raised enough
is another matter.
Greg Fahey
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