Governor Hopefuls Search for Budget Fix

Posted on September 04, 2002 | Type: In the News
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The two leading candidates for governor have found common ground. Both agree with Gov. Jane Hull's latest directive to address the state's budget crisis.

Republican Matt Salmon and Democrat Janet Napolitano are the only candidates who fully support 10 percent cuts at nearly every state agency to reduce a projected $400 million budget deficit this year.

Other Democrats say the state already has cut too deeply and has threatened the future of education and health care programs. Other Republicans say the cuts should be more strategic by taking additional money from less critical programs.

Hull estimates the 10 percent cuts should reduce the deficit by $150 million to $180 million. There is little political will at the state Capitol to take further action before a new governor takes office in January. State officials and candidates agree, though, that a delay of three or four months reduces the number of options available to erase a deficit and to meet constitutional requirements to balance the budget.

Salmon said Hull's order is an important first step toward permanent changes that would consolidate some state programs and eliminate others.

"There are no easy answers, but we have got to reduce spending," said Salmon, a former U.S. congressman. "We don't have the time to be foolish now. We don't have the time or money."

Hull and lawmakers could find additional savings this year from a list of $233 million in cuts suggested by the Goldwater Institute, Salmon said, although he did not offer support to any specific proposals. An institute study released in May proposes eliminating the Commerce Department, privatizing several agencies, including the state prison system and the Arizona Historical Society, and cuts of more than $100 million to the three state universities.

Unlike Salmon, Napolitano has said she would consider eliminating sales tax exemptions or taxing some services to provide additional funding.

"But the budget crisis is now," Napolitano said. "There is no way to increase revenue in time to solve this."

Napolitano said Arizona could raise as much as $200 million by demanding the federal government pay its fair share to cover Medicare and Medicaid patients, as well as additional state costs associated with illegal immigration.

The other Democratic candidates said the suggestions offered by Hull, Napolitano and Salmon are too timid because state officials are predicting a $1 billion deficit for the next fiscal year, which starts July 1, 2003. In general, Alfredo Gutierrez, Mike Newcomb and Mark Osterloh argue the Legislature should swiftly remove sales tax exemptions and, if necessary, raise current tax rates.

"They've got to be big, and they've got to be dramatic," said Gutierrez, a former state senator. "And you've got to do it as quickly as possible."

Republicans Carol Springer and Betsey Bayless said the governor must accept political reality and focus instead on tightening belts.

"Even if (lawmakers) come back as a lame-duck Legislature after the Nov. 5 general election, I don't think they will be prepared mentally to attack some structural changes," said Springer, the state treasurer. "And I don't blame them. Why would they want to reinvent the wheel while they are walking out the door?"

But Bayless and Springer also questioned further across-the-board cuts, saying individual programs and expenses must be targeted.

"There comes a time when you have to decide what you should cut back and what you should not do anymore," said Bayless, the secretary of state.

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