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Arizona House plans budget debate as Senate looks for votes

Republican Rep. Regina Cobb, chair of the Arizona House Appropriations Committee, listens as a Democratic lawmaker complains about provisions of the GOP-negotiated state budget plan during a Wednesday, May 22, 2019, committee hearing in Phoenix. The House panel dominated by Republicans was moving quickly to approve the package negotiated with GOP Gov. Doug Ducey and prepare for a vote by the full House later this week. (AP Photo/Bob Christie)

PHOENIX — The state budget proposal negotiated by Arizona Gov. Doug Ducey and top Republican lawmakers would charge Flagstaff for raising its minimum wage higher than the state's and create an anti-abortion hotline.

Those are among hundreds of items in the $11.8 billion budget that lawmakers began debating publicly Wednesday ahead of votes that could come later this week.

The GOP budget proposal would allow the state to charge more to Flagstaff and any other city or county that raises its minimum wage higher than the state's, ensuring the state doesn't pay more for its workers' higher wages.

Ken Strobeck, head of the Arizona League of Cities, said he expects lawmakers will limit the impact only to developmental disability providers.

It is not immediately clear what the provision could cost Flagstaff, but according to Flagstaff city budget documents, the city is expected to receive about $15 million from state shared sales and income tax revenues.

Much of that money goes to the city’s general fund. The general fund goes to pay for everything from public services like the police and fire department to programs providing down payment assistance. The general fund also provides much of the discretionary funds that the Flagstaff City Council can use each year.

If the legislature does limit the proposal to affect the monies for developmental disability providers, that could take a substantial chunk out of those funds.

During the city’s last budget retreat, Monica Attridge, CEO of the Hozhoni Foundation, which provides services to those with developmental disabilities, said for Flagstaff providers, there is a $3.3 million annual difference between the city’s minimum wage and the states.

And the GOP budget proposal could mean that $3.3 million would be charged out of the shared revenues the city receives from the state.

Senate President Karen Fann said although she personally dislikes the higher Flagstaff wages, the provision was not meant to punish the city. Instead, it's meant to ensure that all providers who receive higher state reimbursements because of rising wages get a fair amount of extra cash.

"A lot of the other municipalities are saying 'why are they getting a larger proportionate share of this money just because they passed their own higher minimum wage?' " Fann said.

But that’s not how many in Flagstaff see it, including Vice-Mayor Adam Shimoni.

“The proposal is worded like it is not specific to Flagstaff, but it is obvious they are making an example of us,” Shimoni said in an interview with the Daily Sun.

Flagstaff Mayor Coral Evans said it is still unclear if the proposal would only apply to developmental disability providers or if it could include other state contractors in Flagstaff.

“The ramifications of this proposal could be much broader than we realize,” Evans said.

But even as legislative committees began daylong hearings to discuss and likely advance the spending plan, Senate leaders struggled for another day to build support. Five GOP senators told The Associated Press this week that they will not vote for the budget plan as it was negotiated for various reasons.

One of those senators agreed to support the budget on Wednesday afternoon. Sen. Michelle Ugenti-Rita announced in an appropriations committee hearing that she had a deal with the governor and GOP legislative leaders to repeal a new $32 vehicle license fee in two years instead of five. That fee was designed to fund the highway patrol and end a budget gimmick that took road maintenance funding to pay for highway policing.

It was sold to lawmakers last year as an $18 fee but ended up being $32 when it was finalized by the Department of Transportation. That incensed many lawmakers.

Details made available Tuesday night revealed a number of budget surprises not mentioned in earlier briefings.

Those include $2.5 million in each of the next three years for a helpline that seeks to steer pregnant women away from abortions.

Cathi Herrod, president of the anti-abortion group Center for Arizona Policy, said the help line is designed to reach pregnant women to inform them about available services.

"This is modeled after a program from Texas that has been successful in reaching women to provide them with alternatives to abortion," Herrod said. "Arizona is a pro-life state. Women are bombarded with messages about whether or not to have an abortion. This is about providing life-saving alternatives to abortion for women who are interested."

Earlier this year, Herrod convinced lawmakers not to reinstate funding for a 211 hotline that provides referrals to health and social services because a handful of callers sought information about abortion.

Jodi Liggett, director of Planned Parenthood Advocates of Arizona, called the provision an "extremist tactic" that interferes with the right to make private decisions about health care.

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"This is an attempt to deny women and families nonjudgmental care," Liggett said in a statement.

The GOP budget plan would boost Arizona's rainy day fund to $1 billion, give raises to state law-enforcement and corrections officers, and deliver the next phase of teacher raises Ducey and lawmakers promised last year. It also would cut income taxes and fees by $386 million, to offset higher state revenue expected from a 2017 federal law, taxing online sales by out-of-state retailers and phasing out a new vehicle license fee.

Several GOP senators were concerned that the $325 million in tax cuts in the bill are spread among all taxpayers and not just those hit with higher taxes because of the elimination of deductions.

Sen. Heather Carter said she was also concerned about putting in place what amounts to permanent tax policy on a guess because various entities have different estimates.

"I was really hoping we could put something forward that would be measured, perhaps a pilot program with some sort of an assessment, a sunset, and then a more robust conversation a year down the line once we know what these numbers are," Carter said. She opposed the budget bills.

As the House Appropriations Committee debated the budget, Democrats objected to the tax provisions and tried unsuccessfully to attach some of their priorities, including more money for school districts and highway construction.

"I see it as an incredible missed opportunity" to consult Democrats and produce a bipartisan budget, said Democratic Rep. Aaron Lieberman, who noted that Democrats picked up seats in the Legislature and Congress in 2018. "Look at what the voters told us last election."

Democrats pushed an additional $100 million for infrastructure projects, $233 million to fully restore cuts to a specific K-12 school, $84 million for child care subsidies and $20 million for a housing fund that increases low-income homebuilding. All were rejected.

None of the Democratic proposals were adopted, as is common with budget deals. Republican Rep. Bret Roberts said moving the pieces around at this stage will just lead to cuts elsewhere.

"I keep hearing this phrase 'we can do more, we can do more,' " Roberts said. "But at the same time, every time we want to single out and do more for this section of the budget that means we're pulling away from another section of the budget. We need to take that into consideration."

Republicans hold just a 31-29 majority in the House, and a 17-13 majority in the Senate.

Additional reporting was provided by Adrian Skabelund with the Arizona Daily Sun.   

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