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Arizona Budget Crisis: Legislators Lock Out Governor; Governor Torpedoes Budget

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PHOENIX, AZ -- (Wednesday, July 1, 2009) Arizona Governor Jan Brewer vetoed major portions of the budget Wednesday afternoon after the State Congress adjourned sine die (permanently for fiscal '09). Brewer has called legislators back for a special session scheduled for after the Fourth of July weekend to complete the partial '10 budget.

Most Arizonans thought a budget deal would be easy this year because Republicans control the legislature, the judiciary, and the governor's office. But Tuesday, as the 2009 fiscal year ended at midnight, and the 2010 fiscal year began, Senate Republicans turned off, then removed the digital wall clock from the Senate chambers and continued wrangling over the budget as if July 1 (and the new fiscal year) had never arrived.

Republican leaders of the Arizona House and Senate support deep cuts in education, public safety, services for the disabled, services for abused children, and other critical programs, which has many of them at odds with each other and with the Republican governor. Governor Brewer supports an increase in sales tax, putting her at odds with the libertarian-leaning Republican leaders of the Arizona House and Senate. Brewer has promised to veto any budget that does not refer a sales tax increase to the voters for referendum. Senator Ron Gould (R) characterized the intra-party warfare over taxes as "a battle for the heart and soul of the Republican Party."

Democrats, on the other hand, were consistently left out of substantive budget negotiations over the last six months, with the exception of a 2 hour window Tuesday when Governor Brewer called upon Democratic legislators one-by-one in a last ditch effort to garner enough support for her sales tax plan. Arizona Democrats oppose an increase in sales tax, calling it a regressive tax that it disproportionately affects low-income and middle-class taxpayers.

Although working against the clock to prevent a government shut down on Tuesday, the Republican-led legislature spent a good deal of time on bills unrelated to the budget. For example, they passed legislation to legalize sparklers, privatize prisons (including death row), and legalize guns in bars. They also debated a bill related to scrap metal.

Outside the legislative chambers, as the clock struck 12 midnight, Arizona government agencies were taking steps to shut down operations. Arizona is one of a handful of states whose government cannot operate without spending authorization (without a budget passed by the legislature). At 5:30 AM, Governor Brewer's office posted a message on the Arizona Department of Administration website promising to act to continue state operations and instructing all state employees to report to work as scheduled.

Around 6:00 AM, the legislature began transmitting bills to Brewer, including eight trailer bills meant to take effect only if the original budget bill, SB 1188, takes effect. Then, amid fears that Brewer would line-item veto the bills before the legislature could adjourn sine die (permanently for fiscal '09), Republican Senate leadership ordered security to lock the Senate building. Senate Majority Counsel Greg Jernigan (R) explained, "We prefer not to get veto letters this morning." Too late. The governor's Deputy Chief of Staff Richard Bark was spotted in the building as the doors were being locked. Republicans quickly voted against the Clean Elections bill and finally adjourned at 7:32 AM, seven hours into the new fiscal year.

Brewer vetoed all eight trailer bills and line-item vetoed many of the budget cuts in SB 1188, saying,

I received early this morning a fatally flawed legislative budget. The legislative budget ignores my consistently expressed goals and instead incorporates devastating cuts to education, public safety, and our state's most vital health services for the frail. In particular, this package of bills is shortsighted, in that it sets up an enormous revenue shortfall that will severely harm our State's future. Therefore, I have carefully and selectively chosen to line-item veto portions of the legislation which allows me to add back funds for vital services and public safety so those critical programs are unaffected. Additionally, due to my actions today, state government services will continue to function. Improvements in education funding, however, will require significantly more legislative work.

By issuing only a partial veto and allowing the rest of the budget to stand, Brewer accomplished two things. First, she averted a government shutdown (for now). State operations and services will continue to function (temporarily). Second, she puts pressure on the legislature to look at revenue-enhancement strategies (i.e., her sales tax proposal) because, without the cuts that were vetoed, the state budget deficit will get larger every day that the legislature waits to act.

Many Arizonans are expressing anger and disbelief that Arizona is still without a budget when Republicans control the Senate, House, judiciary, and the governor's office. Arizona Republican Party Chair Randy Pullen released a statement Wednesday afternoon blaming Democrats for the budget failure, "Democrat legislators have become obstructionist, failing to engage in the legislative process....Democrats ignored the Governor's call when only a few votes would have been necessary to finish the process and provide Arizona with a timely, balanced, and responsible budget."

Although locked out of the budget process for months, Democrats held budget hearings across the state and developed comprehensive budget proposals, of which some have even received accolades from conservative think tank Goldwater Institute. Assistant Majority Leader Kyrsten Sinema responded, "We did everything humanly possible during the last six months and up until the last minute to work with Gov. Brewer and Republican lawmakers to pass a better, bipartsan budget to create a stronger Arizona, but they refused and here we are. As Democrats, we are happy to see the Governor finally acknowledge that a bipartisan budget is the best solution to protect education and middle-class families."

House Democratic Whip Chad Campbell said pointedly that Republicans "refused bipartisanship." Even Republican legislators are speaking out against their own party regarding the budget impasse, saying that Republican leadership should have worked out their differences. Senator Carolyn Allen (R) told the Arizona Republic, "People out there on the street are going to think we're exactly what we've proven to be, and that's inept."

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