Governor, GOP differ over spending
The Arizona Republic
Jan. 18, 2006
Robbie Sherwood and Chip Scutari

Gov. Janet Napolitano unveiled a $10.1 billion state budget Tuesday designed to fix what's broken in Arizona: the education system, immigration, the health care system, social services for families and state employees' pay.

In doing so, the governor ignited a debate with Republican leaders over what to do with the state's overflowing supply of money. She would prefer to spend more of it. They would prefer to give more of it back to taxpayers.

The budget surplus has risen to about $1 billion, providing what could be a one-time opportunity to remedy ills that have plunged Arizona to the bottom of rankings in education, state-employee salaries and other areas.

"We have to do more than penny ante stuff, or we won't get where we want to go," Napolitano said in presenting her 2006-07 budget, which would increase spending by 20 percent.

Republican leaders quickly responded that her approach is not what Arizonans want and that the surplus offers a welcome opportunity for cuts in corporate and income taxes.

"The bottom line is that the governor said she was interested in fiscal accountability," said House Speaker Jim Weiers, referring to Napolitano's State of the State speech last week. "But what she said isn't what we're getting. She's talking about a 20 percent increase in spending.

"The governor obviously does not believe that people know how to spend their money better than we do. I think they know how to spend it better."

Weiers and other Republican leaders have proposed at least $250 million in tax relief, including cuts in corporate and income taxes.

Napolitano has proposed $100 million in cuts, targeted toward specific goals such as encouraging the use of fuel-efficient vehicles and encouraging small businesses to offer health insurance to their employees.

Sen. Linda Aguirre, a Phoenix Democrat, said Napolitano is "delivering on all her promises."

"The taxpayer out there is going to be real happy with this tax package," Aguirre said. "Education is a big-time winner in this budget. That means a lot for Arizona."

The governor's budget is the starting point for a process that will continue for the next several months.

The Legislature ultimately has the authority to develop and approve the state budget, subject to Napolitano's veto power.

Top priority: Education
The top spending priority in Napolitano's budget is education. She made the most aggressive pitch to increase education spending of her tenure Tuesday with a plan that would spend an additional $105.4 million to put voluntary full-day kindergarten in every Arizona elementary school.

It would also give every public schoolteacher in the state a raise and put money in classrooms to help immigrant students learn English.

Napolitano also asked lawmakers for an extra $250 million for schools in general. Nearly half the state budget goes to K-12 schools, but Arizona still ranks near the national bottom in terms of investment in education.

"It's time we take some bites out of that education budget," Napolitano said. "We can do it."

Republicans also say they plan to spend significantly more on education, but it's unlikely they'll go for such a big increase for all-day kindergarten or to teach

Immigrant students deficient in English skills.
Napolitano also proposed spending increases of $100 million to beef up law enforcement on the border and $215 million to increase state employees' salaries by 7.5 percent.

She said her spending wish list is a relatively small part of the budget. Only 7.7 percent of the budget increase is related to the expansion of existing programs, new initiatives or state employee pay raises.

But Republican legislative leaders said the governor is spending at least $500 million more than they can stomach. GOP leaders said they calculated more than $200 million in borrowing in Napolitano's budget, but most of that money goes to building classrooms for full-day kindergarten over the next 15 years.

Business leaders respond
Business leaders were bullish on Napolitano's tax lures for high-tech jobs but reserved on her other ideas.

"This sounds like great news," John Kaites, who lobbies on behalf of the Arizona Technology Council, said of the governor's proposed $45 million in tax credits for ventures that promote high-wage jobs. "She's been extraordinarily supportive of these issues."

"We tend to favor, as a board, more across-the-board tax cuts," said Farrell Quinlan, the chamber's vice president of communications and federal affairs.

"That being said, we are in favor of research and development tax credits."

Border security debate
Napolitano turned heads last week with her tough talk about border security. Now it's time to see if her plans to increase local police budgets along the border and purchase high-tech surveillance equipment will find favor with Republicans who regard her as weak on the issue.

Advocates on both side of the border debate still aren't sure what to make of Napolitano's new stance. While Napolitano's border plan seems to signal her heightened focus on illegal immigration, Richard Humphries isn't sure. The resident of Elfrida, about 30 miles north of Douglas, and adviser to the Minutemen anti-illegal immigration group is waiting to see whether Napolitano's pronouncements amount to more than election-year rhetoric.

"It all depends on what actually happens," Humphries said. "I'm just holding my breath to see what she's going to do. This may just be more political pandering."

Elias Bermudez said he wishes the governor would focus on efforts to allow more people to come to this country legally to work, rather than attempting to lock down the border.

"If we continue to throw money at the border, it's going to be a waste of our resources. It is just not going to solve the problem," said Bermudez, who leads a radio talk show on immigration issues and helped organize last week's rally that saw thousands descend on the Capitol during the State of the State address.

"I would love to see that money going to education, going to teacher pay, going to school programs."

Republic reporters Matthew Benson and Mary Jo Pitzl contributed to this article.