Tuesday, March 3, 2009

Senate Democratic Budget Strategies

Senator Jorge Luis Garcia, D-27
Democratic Leader

Arizona Senate Democrats announced budget strategies for FY 2010 totaling $3.5 billion. We have heard from numerous constituents at budget hearings we held around the state and from thousands who have come to the Capitol. The clear message is that they want to know other strategies aside from more draconian cuts and tax increases proposed by the Republican Majority.

Strategies include, $500 million from securitization (Lottery or Prisons), $100 million in agency fund transfers, $247 million from statewide equalization rate, $22 million from Department of Corrections home arrest, $75 million in university rollover, $167 million in DES, AHCCCS, RBHA provider payment deferrals and $55 million in TPT Estimated Payment Threshold. The strategies also include $168 million in suspension of individual tax credits, $81 million in corporate tax credits, $580 million in ongoing savings from FY 2008-2009 and $1.4 billion from the federal stimulus.

The list of strategies is just that. It is a list of other opportunities that exist.

For clarification, tax credits are existing state dollars, not additional tax liability. The state allows people to direct part of their tax dollars to special interests of their choosing through tax credits, many of which were approved when state revenues were plentiful.

In 2006, in exchange for implementing all-day kindergarten, Governor Napolitano agreed to reduce personal income tax by 10 percent, implement corporate tuition tax credits and a three-year suspension of the state equalization rate. The three years are up and the corporate welfare clients want to continue the handout. On a $200,000 home, this rate is only roughly $68 per year. In a recent hearing, APS agreed that their reduction for the Palo Verde plan is $3.2 million. The APS total benefit is estimated at $7 million.

If we are to remain a state that wants businesses to come here and stay here, we must not decimate our state. What business is going to want to relocate to a state with an education system that is funded next to last in the 50 states? What business wants to relocate to a state that breaks contracts with businesses as was done in the FY 2009 budget? I cannot name one.

When it comes to making the tough decisions, I would rather the universities to restore the AIMS scholarships and not cap enrollment rather than continue a multimillion dollar giveaway to APS and others. Senate Democrats make education a priority in Arizona.

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