Republicans want budget bill passed this week

Republicans continued pushing toward passage of their budget-balancing plan Thursday, despite complaints from Democrats that they were ram-rodding the process too fast.

Committees were working on the plan to erase a $1.6 billion this fiscal year through a series of cuts among various state agencies and $142 million from the state university system, which had launched a campaign to condemn the cuts.

Rep. David Lujan, D-Phoenix, charged that the Republicans' plan had unnecessary cuts in light of the $1 billion the state expects to get in federal stimulus money.

But, State Treasurer Dean Martin, a Republican, said lawmakers need to act as soon as possible.

"Literally, every day that they waited to have a special session on the budget cost $6 million a day in additional cuts," Martin said. "When you're spending $28 million a day and only making $22 million a day, that adds up real fast."

While Arizona will receive a billion dollars in federal stimulus money, "most of it has heavy strings attached" and only about $500 million can be used to balance the budget, Martin said.

Lujan disagreed.

"We're urging the Republican leadership in the House and Senate, and the governor's office, to reconsider this because we don't need to be making these types of cuts at this time because of the money we're getting from the federal stimulus package," said Lujan.

"When you're talking about funding cuts of this magnitude, it is going to negatively affect Arizona for generations to come," Lujan added.

The Republican-controlled Legislature was summoned into special session late Wednesday night by Gov. Jan Brewer. She called the session after learning Republicans had enough votes to pass a budget plan that includes a $142 million reduction in the university systems budget. The state is looking at a $1.6 billion budget deficit this fiscal year.

The Republican plan is based on an expecttion of $500 million in federal stimulus money, but Lujan said the actual amount is closer to $1 billion.

With Democrats in the minority in the House and Senate, and with Republican Brewer in the governor's office, "It's going to be up to the governor and the leadership in the House on the Republican side to realize that in Arizona we do not need to make these cuts right now with the federal stimulus money coming in."

Wednesday's special session convened, hours after chanting university students gathered at the Capitol to protest contemplated midyear state spending cuts.

The GOP package centers on midyear spending cuts. It also includes sweeping dollars from special-purpose funds and spending $500 million of federal stimulus money.

With the recession and the housing industry's collapse, the state faces a projected shortfall of nearly $1.6 billion in its current $9.9 billion budget. A shortfall twice as big is expected in the 2009-10 budget that lawmakers have yet to write.

Proposed spending cuts would be spread throughout state agencies, as well as universities, community colleges and K-12 public schools.

"Even though its difficult, it's workable for those affected areas of the budget,'' House Speaker Kirk Adams, R-Mesa, told reporters.

Key departures from earlier proposals include a revised funding cut for K-12 public schools retention of the KidsCare health-insurance program for children.

Funding for K-12 schools would be cut by approximately $130 million. The big parts include a $21 million cut of funding for computers and other equipment and a $98 million reduction accomplished by not overriding a constitutional spending limit for schools, Adams said.

However, schools would get new discretion to spend their remaining equipment funding either for that purpose or regular operations, he said.

Meanwhile, university funding would be reduced by $142 million, more than a recent House proposal but less than $243 million of cuts and sweeps included on an initial list of options.

The package still includes lump-sum cuts and salary reductions for most agencies and programs, but managers will decide whether to use layoffs, Adams said.

``That's a decision that local management gets to make,'' he said. ``We tried to restore as much flexibility as possible to every area of the budget.''

Initial legislative consideration of the package could take place as early as Thursday morning, when the House Appropriations scheduled a meeting. Leaders hope to finish action by this weekend.

Holding a concurrent special session would allow any changes enacted in state law to take effect earlier than if they were passed during the regular session now in its third week.

More than 1,000 students, many chanting and carrying signs equating budget cuts with killing higher education, rallied first at nearly Wesley Bolin Memorial Plaza and later on the plaza between the House and Senate buildings.

One chant- ``hey, hey, ho, ho, these budget cuts have got to go''- echoed off the fronts of nearby state buildings.

Students said they feared that budget cuts would eliminate some classes outright, increase the size of others and result in the firing of faculty members- all of which makes it harder for students to graduate.

``People will be losing their majors,'' said Fernando Calderon, a University of Arizona computer science freshman from Sierra Vista.

University presidents and the president of the state Board of Regents said the university system could swallow $100 million of cuts but still be forced to lay off employees, shutter some academic units and increase class sizes. Deeper cuts sought by some lawmakers would turn the nationally recognized, research-grade institutions into regional-caliber schools, the presidents warned.

The universities announced they were forming a task force of economists to suggest ways for the state to regain prosperity.

``We have to find other ways to do this or we will weaken this state,'' said Northern Arizona University President John Haeger.

The state has already used up most of the relatively pain-free ways to ease budget pains, so lawmakers are now considering proposals that center on spending cuts but also includes sweeps of money from special-purpose funds and use of federal stimulus money.

Democratic legislators have pushed to reduce spending cuts by instead deferring some payments into the next fiscal year, a proposal of former Democratic Gov. Janet Napolitano. Republicans have balked, citing projections that the state's fiscal troubles are expected to last several years.

There's been no serious consideration of tax increases, though there is simmering debate over whether the state should repeal a suspended property tax that would otherwise take effect again automatically this year, netting the state $250 million in annual revenue.

(Copyright 2008 Bonneville International Corporation. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. AP contributed to this report.)