Legislature OKs Republicans' budget
Associated Press
Mar. 18, 2005 08:40 AM

The Republican-led Legislature early Friday approved an $8.2 billion state budget that includes a new school-choice initiative and business tax cuts which supporters say will help economic development.

The Senate finished action on the budget at 12:52 a.m., passing the main appropriation bill (SB1408) on a party-line vote. The House followed, approving the last budget bill at 4:14 a.m.

According to legislative staff figures, the approved 2005-2006 budget's proposed spending is approximately 6 percent higher than spending from the current fiscal year, which ends June 30.

Unlike the last two years when Republicans splintered and some joined Democrats on decisive budget issues, GOP lawmakers demonstrated unity in approving the budget.

However, the budget's fate is uncertain because many provisions run counter to budget priorities of Democratic Gov. Janet Napolitano. She vetoed numerous elements of the budget approved two years ago but erased only two provisions in a compromise package she helped negotiate last year.

Republicans said their 2005-2006 budget responsibly keeps the state within its fiscal means while providing tax relief and more money for education, health care and other priorities.

Senate President Ken Bennett, R-Prescott, said he wants to meet with Napolitano to try to sell her on the budget but also to consider ways to work out any differences.

"Some have assumed that we have passed a budget that will automatically be vetoed," Bennett said. "I hope that is not the case. I don't believe that is the case."

Senate Minority Leader Linda Aguirre, D-Phoenix, flatly predicted Napolitano would veto the budget, setting the stage for bipartisan talks.

"They claimed to be able to get a budget out in 65 days," Aguirre said. "They got it but it's not going to get signed so it's worthless."

The budget includes a new corporate income tax credit for companies which make donations to organizations for private school scholarships. The state already has a similar tax break for individuals' donations.

Tax cuts given preliminary approval by the Senate included one to reduce property taxes on commercial property. Another phased-in reduction would provide income-tax savings for manufacturers and other companies which do business in multiple states.

The Senate rejected Democratic amendments to increase funding for all-day kindergarten, add dollars for instruction of English-learning students, restore funding for the Navajo Nation's community college and start building a University of Arizona branch medical school campus in Phoenix.

Democratic amendments for more spending on social services - including child care subsidies for low-income families and continued General Assistance welfare funding for disabled adults - also failed.

The all-day kindergarten expansion, the child care subsidies and the medical school branch campus are budget priorities of Napolitano.

"There's a lot not to like in what we've seen so far," Napolitano spokeswoman Jeanine L'Ecuyer said Thursday when asked whether the governor would veto the budget.

During a Thursday evening floor session in the Senate, Republicans Toni Hellon of Tucson and Carolyn Allen of Scottsdale sided with Democrats in unsuccessfully seeking more money for all-day kindergarten.

Allen and Hellon also sided with Democrats in voting against the bill (HB2379) for the new tax credit for corporate donations for private school tuition.

Earlier Thursday, Senate Republicans set aside a late-emerging proposal promoted as an alternative to Napolitano's call for more state funding for all-day kindergarten.

The alternative would use a new tax credit to encourage corporate donations to pay for new all-day cash grants for kindergartners attending either public or private schools.

The bill would keep the initial $25 million funding approved last year for all-day kindergarten for approximately 10,000 students in districts with the highest percentages of low-income families.

The budget doesn't include money that Napolitano wants for the second year of the five-year phase-in.