Arizona government in shackles
Voter mandates hamstring Legislature, lock in spending

Robbie Sherwood
The Arizona Republic
Mar. 16, 2003 12:00 AM

It's the heavyweight fight of the decade.

Arizona's representative government stands in one corner, bruised and bleeding red ink.

The growing power of direct democracy stands in the other, ready to deliver a knockout punch on the 2004 ballot.

And a state government with a $1 billion deficit facing potentially drastic cuts to universities and social services for the poor, elderly and disabled is caught in the middle.

Round 1 occurred early this year when lawmakers filed a flurry of bills to make it more difficult for citizens to put measures on the ballot and easier to change the results of previous ballot measures.

"The Legislature is literally boxed in by an initiative process that's been carried to the extreme," said Marty Shultz, a longtime lobbyist for Arizona Public Service Co. who is campaigning to rein in the initiative process. "We have to get our arms around this. When you lock in spending, whether a program deserves it or not, the mistakes of the past get repeated again and again."

Round 2 is expected to begin as soon as advocates of universities, social programs and transportation projects prepare new initiatives that could tighten the shackles on lawmakers and provide millions of dollars for new programs and services.

Sandy Bahr of the Sierra Club, which has backed several initiatives for the environment, said that voters will never give up their power because the Legislature lacks leadership and must be prodded to pay for important voter priorities.

"They are just angry because they can't cut education and health care like they want to," Bahr said. "Yes, money and special interests play a role in initiatives but not any more than they do at the Legislature."

'Hands are tied'

Republican leaders worry that they are being made to look like ogres for proposed budget cuts that could affect university students, children, the mentally disabled, adult education participants, the arts community and thousands of other Arizonans.

But the lawmakers say they have no choice when two-thirds of their $6 billion General Fund is tied down by mandates from voters, courts and the federal government. Most of the $1 billion deficit is tied to voter-mandated increases for public schools and health insurance for the poor.

"Our hands are tied," said House Minority Leader Eddie Farnsworth, R-Mesa. "We have no options to cut outside of our little slice of pie.

"The Legislature is going to become obsolete in five to 10 years. Then we'll just have legislation by wealthy people who have the money to buy their way onto the ballot."

Most states, even those that don't allow initiatives, have about two-thirds of their budget tied up in public schools and federally matched Medicaid health insurance for the poor, according to the National Conference of State Legislatures.

But Arizona is nearly alone with such ironclad restrictions on cutting voter-approved spending or raising new taxes.

The shackles are:

? Proposition 105, passed in 1998 by voters angry at lawmakers for gutting a successful medical marijuana measure and other initiatives. Lawmakers now cannot even make small changes to voter-approved programs, no matter how much they cost or if the state can pay the bills.

? Proposition 108, which voters approved in 1992 and requires a two-thirds majority of the Legislature to raise taxes. Enough lawmakers in the Republican majority have signed "no tax" pledges to make this hurdle impossibly high.

Working in and around the voter-approved shackles are hundreds of millions of dollars in mandates from judges for school construction and improved English instruction and from the federal government (primarily costs to prisons and hospitals linked to illegal immigration).

The showdown between representative government and direct democracy will occur between now and November 2004 when voters either will let lawmakers loose to cut spending or tighten the shackles and throw away the key.

Legislators have introduced more than 30 referendums for the 2004 ballot asking voters to cede their political power by making it more difficult for new initiatives to pass and relaxing the mandates of past ballot propositions.

Various measures

Measures that have passed the House would bring voter-approved programs back to the ballot for another vote every eight years and would shorten the window to collect petition signatures.

Another House measure would require ballot propositions to identify a funding source other than state coffers.

And a Senate measure awaiting a full debate would create a Taxpayer Bill of Rights similar to Colorado's, which limits the growth in state spending to inflation and population growth.

The Arizona resolution also contains a clause that would suspend Proposition 105's voter protection for programs such as health care and education should state revenues dip.

Advocates for universities and children's health care, whose budgets don't enjoy voter protection, also could run ballot initiatives of their own.

Protection from cuts for those budgets would leave lawmakers with decision-making authority over only 20 percent of the General Fund, or $1.2 billion. And half of that would be dedicated to the prison system, which is considered off-limits for political reasons.

Much of the rest would be tied up in employee salaries.

"I don't think the average well-meaning Arizonan understands the legal bind that the Legislature is in," said Stan Barnes, a former lawmaker turned lobbyist who campaigned heavily against Proposition 105. "Every answer that the Legislature comes up with to solve their problem has a legal roadblock that has been placed in their way. The only reason we're not in a pure fiscal crisis right now is that there is still some time to deal with it, but that time is running out fast."

Proponents of the Voter Protection Act have no sympathy for lawmakers, saying they created their own mess by defying the will of the public. Sam Vagenas, who worked with University of Phoenix founder John Sperling to put medical marijuana and Proposition 105 on the ballot, said that his backers will further punish lawmakers if their reform measures make it onto the ballot, especially the one to re-examine initiatives every eight years.

'Circumvent the will'

"It's obvious they are trying to circumvent the will of the people," Vagenas said. "We'll come up with a new Voter Protection Act that will prohibit the Legislature from ever referring another measure to the ballot again. They've pointed the gun right at us, and we're pointing it back."

A knockout punch could come before the 2004 election if lawmakers decide to let voters determine this year whether they want to cut services or raise taxes. Oregon voters recently rejected just such a measure, forcing lawmakers there to make the tough budget decisions on their own. Among other things, they cut short the school year by six weeks and laid off 600 teachers. Gov. Janet Napolitano backs none of the initiative-reform measures and wants no talk of a tax increase until her Citizens Fiscal Review Commission finishes its review of the state tax code in October. But if that commission recommends a tax increase, it likely will fail to garner the two-thirds legislative majority it needs.

If a major tax reform package gets onto the 2004 ballot, Napolitano will have to throw all of her weight behind it for it to succeed, said Rob Melnick of the Morrison Institute for Public Policy at Arizona State University.

"If she loses that, she loses her credibility," Melnick said. "It's a huge risk."

Initiatives and referendums are phenomena mostly of the Western states, reflecting populist and independent spirits.

But the influence of big-spending mass media campaigns and the ease of paying for signatures to place measures on the ballot have put the system out of balance, Melnick said.

It's not that the number of ballot propositions that have increased, it's their hold over state government.

"So, you've $5 million to burn? How would you like to hamstring the Legislature?" Melnick said. "It's a scary thought.

"We had better start getting smart about this because if you have enough money you can pretty much pass anything."

Joining Arizona in the struggle about budget restraints are California with a $35 billion deficit and more than two-thirds of its budget going to voter-mandated spending, as well as Colorado, Oregon and Florida.

'Constricting effect'
Colorado lawmakers such as Senate Majority Leader Norma Anderson desperately are looking for ways around their voter-approved mandates like the Taxpayer Bill of Rights.

It kept spending low for a decade. A July 2002 Wall Street Journal editorial praised the law for keeping Colorado government within its means during the boom 1990s. But critics say that the measure's limitation on spending increases will make it impossible to build government services back to their pre-recession level, even if good times return. Meanwhile, mandated education spending continues to grow as the population grows, ratcheting down the Legislature's slice of discretionary income.

"It has a constricting effect," said Anderson, a Republican. "In four years, all our government will be gone except for schools."

Anderson said Arizona would be wise not to follow Colorado's lead.

And California, where the initiative trend started 24 years ago, is facing the biggest budget hangover in the nation with 72 percent of its revenue devoted to mandated programs, said Jean Ross of the non-profit California Budget Project.

"California is not a model you want to emulate," she said. "What you end up with is an inability to govern."

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