Ariz. lawmakers’ budget work goes down to the wire

PHOENIX — Arizona’s budget battle is going down to the wire, with an intraparty struggle between the Republican governor and the GOP-led Legislature creating the possibility of a state government shutdown starting Wednesday.

Lawmakers struggling to end their annual session were debating what mix of spending cuts and other measures, such as Gov. Jan Brewer’s proposal for a sale-tax increase, they should use to close the $3.2 billion shortfall in a state budget that would normally range up to $10 billion.

Like many states grappling with budget shortfalls amid the recession, a collapsed housing market and rising unemployment, Arizona has no mechanism in place to cope with the lack of a budget when the new fiscal year starts. It hasn’t happened before.

More than 20 states have provisions that direct government to shut down without a budget, according to the National Conference of State Legislatures.

About a dozen states use continuing resolutions to keep spending temporarily, and about a dozen states have other procedures that allow for continuous payment of funds for agencies and services without a budget, the NCSL said.

Since 2002, at least 14 states have started a fiscal year without an approved budget; five of them experienced a partial government shutdown, said Todd Haggerty, an NCSL research analyst. He said at least 20 states have considered tax hikes of one sort or another.

In Arizona, it wasn’t clear what would happen if lawmakers and the governor are unable to reach an agreement, though one legislator was drafting a bill to give Brewer temporary spending powers.

Lawmakers on Monday resumed consideration of a proposed last-minute compromise with Brewer, but many Republican lawmakers were resisting Brewer’s proposed sales tax increase to help close the shortfall.

Instead, some powerful GOP legislators were pushing for tax cuts — to the unease of colleagues. And there’s continuing debate over spending cuts and proposed raids on money usually shared with local government.

Consideration of the package was bumpy by the start on Monday. The first committee slated to consider elements of the package rejected the main spending bill on a 4-4 tie and then recessed to regroup.

Nine hours later, Senate President Bob Burns reassigned the bills to another committee considered more likely to approve them. The second committee then approved the package late Monday night, setting the stage for consideration by the full Senate on Tuesday.

Brewer has said a shutdown would be a “disaster” but her administration hasn’t spelled out what services could continue. Meanwhile, key lawmakers were drafting emergency legislation to temporarily continue at least services deemed essential.

Brewer surprised lawmakers by calling for the sales tax increase in March, saying the anticipated $1 billion in annual revenue from that plus spending cuts and federal stimulus dollars would keep the state in the black without damaging essential services.

Republican lawmakers have said significant cuts must be made because the state’s budget troubles will continue for several years. And they said the last thing the ailing economy needs is a tax increase.

The Legislature on June 4 passed a budget that didn’t include the sales tax increase, but lawmakers feared a veto and didn’t send the bills to Brewer. The state Supreme Court refused to order lawmakers to send her the bills last week, as she’d asked.

Possibilities to avoid a shutdown include passage of temporary spending authority to keep all or parts of state government going while work continues on approving a budget. And Brewer could approve the June 4 budget bills.

In documents inspected by The Associated Press under a public records request, state agencies said lack of a budget would leave a stripped-down state government that would send thousands of employees home, including half the Highway Patrol staff.

Brewer spokesman Paul Senseman called the plans preliminary, but he declined to specify what government agencies would continue other than state prisons and constitutionally mandated functions.

Senate Appropriations Chairman Russell Pearce, a Republican who is drafting an emergency spending authority bill, said it’s clear that Brewer needs legislative authority of one sort of another to keep government going.

The possibility of a state shutdown is causing concern among some groups.

Dane Naimark, president of the Children’s Action Alliance, said a shutdown would interrupt child care subsidies for low-income families and that people calling child-protection workers to report abuse and neglect would instead hear a recording telling them to call police.

“A shutdown would cause a lot of pain and chaos,” Naimark said.

Associated Press writer Jonathan J. Cooper contributed to this report.