Arizona lawmakers approve Republican budget plan

PHOENIX - Arizona legislators approved a budget Tuesday that includes new spending sought by Gov. Jan Brewer for education and other services while replenishing a reserve account that Republican legislators sought in anticipation of renewed budget trouble.

The Senate and House approved the 10-bill package late Tuesday. The bills go to Brewer next.

Supporters said the plan negotiated by top legislative leaders and the Republican governor both tackles immediate priorities and puts the state on solid footing for the next several years.

"This is a safe budget, and that's the key word. The people want safety," said Rep. John Kavanagh, R-Fountain Hills.

The budget includes $217 million of increased spending for mental health care, prison staffing construction, elementary school reading instruction and other programs.

That's less than Brewer proposed but more than Republican lawmakers had in a legislative proposal that was extensively changed Tuesday to become the negotiated compromise.

Democratic legislators said the nearly $8.6 billion budget is shortsighted in stashing $450 million in the rainy-day fund while schools and other services need increased funding and approximately 100,000 children from low-income families remain on a waiting list for a health care program.

The Republicans' priorities are misplaced, said Sen. David Schapira.

"We decided to make funding prisons a higher priority than funding health care for kids who through no choice of their own have no access to health insurance," he said.

The debate over spending reflects that Arizona now has a budget surplus. That's a sharp contrast from recent years in which shortfalls prompted lawmakers to resort to spending cuts, borrowing and accounting gimmicks to keep the state in the black during the immediate aftermath of the Great Recession. Voters also approved a temporary sales tax increase in 2010. The rainy day fund was drained early on.

"We got our house back in order, and it wasn't easy," said Rep. Debbie Lesko, R-Glendale.

With the economy and the state's finances both recovering, Brewer argued that the state can afford some immediate spending increases.

However, many Republican legislators had argued for holding the line on spending. They said the state needs to take care to avoid future budget troubles in the face of the 2013 end of a temporary sales tax and new burdens from the federal health care overhaul's Medicaid expansion and from federal budget cuts.

"If we spend this money, we put Arizona on a footing of sand," said Sen. Ron Gould, R-Lake Havasu City, regarding the $450 million.

Democrats said the budget doesn't do enough to add jobs and address important priorities, and they offered numerous unsuccessful amendments to add money for adult education, parks, school equipment and other services.

Democrats also failed in attempts to derail the plan's diversion of $50 million from Arizona's share of a nationwide mortgage foreclosure settlement.

The House and Senate on Tuesday rejected Democratic amendments to block the Republican plan to use part of the state's $97 million settlement fund to help balance the budget.

The $97 million fund, including the $50 million going into the budget, is separate from a much bigger pot of settlement money intended to go to individual homeowners.

Democrats said the $50 million should be used for settlement-related purposes such as legal aid, financial counseling and outreach.

Republicans said it's legal and proper under the settlement terms for the state to use some of its settlement money to help cope with the fiscal effects of the mortgage foreclosure crisis.

"We're suffering. We have less income," Kavanagh said of the state's finances.