Times are good, but heavy lifting ahead
Arizona Republic
Jan. 8, 2006

Arizona is a land of milk and honey this year. The state budget is overflowing, with an expected surplus of $850 million as the Legislature heads into its 2006 session.

What a turnaround. Just a couple of years ago, the budget overflow was red ink.

Now is the time to catch up with growth, straighten out the books, add to the "rainy day" fund, bolster education, support economic development and make state salaries more competitive.

On the controversy meter, those goals should rank right next to motherhood and apple pie. But the details of how to balance and achieve them are sure to be contentious when the Legislature opens Monday.

Especially because last year's session came to such a sour finish, with legislative leaders accusing Gov. Janet Napolitano of reneging on a deal.
There's enough leftover vinegar to curdle a tanker of milk.

Some lawmakers will certainly be tempted to settle scores and pass legislation designed to put the governor on the spot. We hope they'll resist. This fast-growing state, which added three-quarters of a million people in the past five years, has pressing needs that require the Legislature's full attention.

Among the most important issues to address are:

Budget cleanup. When Arizona was struggling with massive shortfalls in the early 2000s, lawmakers swept money out of funds dedicated to important needs, including highway construction, water-quality monitoring and job training. More of those dollars should be returned.

Education. Legislators started the ball rolling toward better education when they approved initial funding to bring all-day kindergarten to the state's poorest schools. They should continue to expand the program to more schools, as Arizonans want. In an Arizona Republic Poll last week, two out of three voters favored increased funding for all-day kindergarten.
Lawmakers should consider additional support for schools and universities:
72 percent of those polled said the state spends too little on public education.

English-language instruction. The gorilla on the dais is the federal court order to address the needs of students who must learn English before they can learn anything else. Lawmakers have just 15 days after the session begins to come up with adequate funding for English-language programs. After that, the state faces court-imposed fines, starting at $500,000 a day and rising to $2 million if it fails to act by the end of the session. This is a contentious issue, with some lawmakers still smarting from the governor's veto of an inadequate bill last session. But the governor and legislative leaders have been meeting. If everyone keeps focused on the goal, Arizona can beat the deadline.

Growth. Development is a free-for-all in some of the unincorporated parts of Arizona because of loose rules on lot splitting. Impromptu subdivisions spring up with a host of problems that residents then expect counties to fix, from flooding to substandard roads to inadequate emergency access. The Legislature should give counties more authority to rein in lot splits.

Identity theft. With Arizona ranked No. 1 in the nation for identity theft, here's a good place for lawmakers to get tough on crime. Attorney General Terry Goddard has a list of proposals, including consumer notification whenever information is stolen, requirements to protect sensitive personal information and the option for consumers to freeze their credit if they believe their identity has been stolen.

Immigration. Illegal immigration is the top concern for voters, according to polls. In an election year, some lawmakers are eager to go after it with state money and state law. The proposals so far include extending the vehicle barrier that protects a small section of the border and installing high-tech cameras made by a Scottsdale company, equipment that could run $60 million, plus the cost of round-the-clock staffing. Let's not forget:
Immigration and border control are federal jobs. Arizona shouldn't have to divert precious state resources into subsidizing the feds. We must continue demanding that the U.S. government step up to the plate, including reimbursing border communities that bear a disproportionate burden of federal failures of immigration policy.

Medical school. The University of Arizona's planned medical school in Phoenix will be a winner all around: boosting the state's supply of doctors, forming part of a dynamic campus that will eventually include nursing and pharmacy, attracting research investment and connecting with the region's growing bioscience industry. Arizonans throughout the state will benefit both medically and economically if the Legislature continues investing in this farsighted project.

Meth abuse. Last year, the Legislature watered down attempts to restrict access to the cold medications that can be used to make methamphetamine. So cities stepped in, adopting local requirements to put Sudafed and similar products behind the pharmacy counter. Lawmakers should take up the issue again, adopting strict, uniform rules. Although most meth in Arizona comes from Mexico, state restrictions will still dent the supply. Plus, they'll reduce the plague of meth labs, which are mini-toxic-waste sites and a danger to children.

Rainy day fund. While the sun shines, let's get ready for the next storm by socking a substantial amount into the rainy day fund, which now has about $160 million.

Raises for state employees. Arizona employees are paid far less than those in neighboring states, 25 percent less than Nevada, for instance, and many local governments. So we're basically a farm team, losing our best workers to other places. With turnover at nearly 18 percent, the state has to spend $50 million a year on training and recruitment. Everyone agrees a pay raise is critical. But how high? Legislative leaders are talking 5 percent, but a partisan salary committee has recommended 7.5 percent. Each percent increase will cost the state $20 million.

State archives. Now that an ill-considered plan to change the location has been nixed, lawmakers need to budget the second half of the $30 million tab for constructing a state-of-the-art building for Arizona's irreplaceable records and photographs.

Taxpayer bill of rights. This deceptively named notion, which limits spending to inflation and population growth, is really a set of financial handcuffs that would give the state no flexibility to adapt to future needs, even when the revenues are available. The measure caused such havoc in Colorado that voters suspended it. And Arizona has a constitutional spending
limit: no more than 7.41 percent of state personal income.

Tax relief. As sure as Valley temperatures top 100 in June, a big pot of state revenues brings calls to cut taxes. Arizona's booming economy shows that our taxes are hardly a drag on growth, but the tax structure certainly needs tuning up. A good overhaul would lower some rates and raise others, a prospect as likely right now as snow in June. Otherwise, rushing into large tax reductions in a flush year is a prescription for trouble in lean years.
One option: Return some of the surplus as one-time rebates so that we're not locked into big tax cuts.

Water supplies. Dry wells and giant fissures are warnings that water supplies are finite in rural Arizona. At the very least, the Legislature should give rural counties and cities the authority to link development to water availability. Lawmakers should also require potential homebuyers to be notified if an area has been determined to have inadequate water.

Flush economic times give Arizona extra breathing room. It's a good thing. The Legislature has plenty of weighty issues and a lot of heavy lifting ahead.