Lawmakers top Hull on tax cuts, school spending
By Howard Fischer
CAPITOL MEDIA SERVICES

PHOENIX - Legislative leaders have an optimistic view of the state economy and propose a budget with slightly larger tax cuts and substantially more spending for education than Gov. Jane Hull proposes.

The legislative budget for the next two years would total $14.3 billion, vs. $13.8 billion in the governor's recommendation. That amounts to boosting state spending by about 7.1 percent a year for the next two years.

On the income side, lawmakers want to cut taxes by $45 million over the next two years; Hull's budget is built on a $40 million tax cut.

Neither plan is specific about who gets the tax benefits. Hull has said she wants it earmarked for business; Sen. Ruth Solo-mon, D-Tucson, who chairs the Senate Appropriations Committee, said her colleagues want to adjust laws so that families with earnings of less than $30,000 pay no state income taxes.

Under the legislative plan, the biggest spending boost would go to increasing basic state aid to education due to enrollment growth and inflation. And that amount - nearly $300 million above current levels by the second year of the two-year budget being considered - doesn't include more than $450 million that will be collected each year from voter approval in November of a sales tax increase for education.

Lawmakers also want to put about $50 million more into increasing mental health services than the governor does.

The legislative budget also includes a 5 percent pay increase for state employees over each of the next two years, with a minimum of $3,000 for those at the bottom of the pay scale. That is slightly more than what the governor proposes.

State universities also fare better under the legislative recommendation. That is no surprise: The lawmakers who chair the House and Senate appropriations committees represent the communities where Arizona State University and the University of Arizona, respectively, are located.

Lawmakers say they can accomplish all this because their budget staffers are far more optimistic about the economy than the governor's aides are. And that's not just a matter of trying to predict what will happen years from now.

Richard Stavneak, staff director of the Joint Legislative Budget Committee, presumes state revenues will be 8.3 percent higher this year than last year; Tom Betlach, head of the governor's Office of Strategic Planning and Budgeting, presumes a 7 percent growth.

For next year, the differences are even more striking: Stavneak figures 8.1 percent growth; the governor's budget is based on a 6.5 percent increase.

All that means lawmakers believe they have more to divide up than the governor. That, in turn, translates into more money for priority areas, like university funding.

Solomon said the extra spending is necessary, particularly if the state hopes to achieve its goal of becoming a mecca for high-tech industry.

"The universities have suffered in the last few years," Solomon said.

"The turnover of tenured staff is enormous," she said. Solomon said Arizona will lose more qualified teachers unless lawmakers "give them incentives to stay in the state."

Rep. Laura Knaparek, R-Tempe, Solomon's House counterpart, said it's about time for the state to pay more attention to its higher education system.

About the only place where lawmakers are more conservative is in providing new Highway Patrol officers. Hull wants to add 116 over the two years; the legislative budget suggests 88.

Solomon said that is based on a formula of the number of new miles of highway added.

How budget proposals compare
Key differences between budgets proposed by the governor and the Legislature: (Figures are for fiscal year 2003, the second year of the two-year budget.)

Agency or issue Governor's Legislative
recommendation recommendation
University of Arizona $278.7 million $285.3 million
UA Health Sciences Center $57.5 million $58.3 million
Arizona State University $281.6 million $283.5 million
(main campus)
ASU East $10.9 million $11.6 million
ASU West $39.1 million $39.4 million
Northern Arizona University $113.6 million $115.4 million
Community colleges $142.9 million $145.1 million
Department of Corrections $592.1 million $588.1 million
Department of Health Services $323.8 million $355.9 million
Additional aid to K-12 $271.6 million $294.4 million
education*
Total general fund budget $7.2 billion* $7.3 billion*
* Does not include more than $350 million a year in sales tax revenue approved by voters.