IN SICKNESS
The legislative session doesn’t start for another month, but Gov. Jan Brewer and GOP lawmakers are already giving us some ideas about their priorities.
Those priorities don’t appear to include restoring funding for transplant services for low-income Arizonans, although some lawmakers—such as Rep. John Kavanagh—are saying they’d be willing to revisit that particular problem, as Democrats continue to push the issue, and the national media keeps picking up stories about BrewerCare.
Brewer and Republican leaders seem determined to knock more people off the health-care rolls to help balance the state budget, which has an expected shortfall of more than $800 million in the current fiscal year, and somewhere around $1.4 billion in the next fiscal year, which begins July 1. There are two obstacles to that plan to strip low-income Arizonans of their health-care coverage:
1. Voters are the ones who extended health-care insurance to anyone under the federal poverty line, so the current AHCCCS eligibility standards are protected. Any effort to reduce eligibility will result in a court fight.
2. The federal health-care reform package, passed earlier this year by Democrats, prohibits states from lowering eligibility standards, which means that the state stands to lose all of its federal health-care funding—more than $7 billion—if lawmakers monkey with AHCCCS.
Brewer is now talking about a special election to ask voters to lower eligibility standards, possibly to one-third of the federal poverty line. That’s a big roll of the dice; as we saw last month, voters weren’t even willing to give up funding to buy open space, so we’re not sure they’re willing to strip health insurance for people who earn below the federal poverty level.
On the second point, there’s talk about asking the federal government to give the state a waiver, and there’s talk about outright challenging the feds to take away health-care funds. Will that work? Guess we’ll have to wait and see, but it’s a game of chicken that could prove devastating to Arizona hospitals and doctors—which doesn’t bode well for anyone, even people who aren’t dependent on government-subsidized health care.
BUILDING A BIGGER DEFICIT
The health-care debate is sure to be front and center in any proposal to balance the state budget, but GOP lawmakers are also working on an economic-recovery plan.
And how does a Republican spur the economy? Why, with tax cuts, of course—despite all of the evidence that shows that tax cuts do not pay for themselves through increased economic activity.
But lawmakers are not letting the little fact that tax cuts will widen Arizona’s Grand Canyon of a deficit stand in their way.
Gov. Jan Brewer showed her hand last week by proposing a variety of corporate tax breaks designed to lure more businesses to Arizona.
Meanwhile, GOP Senate leaders are proposing a property-tax cut for businesses, even if it ends up raising taxes for homeowners. (We touched on this last week, but just to reiterate: Right now, businesses pay more than twice the taxes on their properties that homeowners pay. The logic behind that has to do with the fact that commercial properties are used to generate profits, while homes are primarily designed to shelter people.)
Those different proposals have put Brewer and the lawmakers at odds—and while Republicans have just enough votes to override a gubernatorial veto, it would require the entire caucus to stick together. Brewer’s team has already been working to try to keep that from happening, but it’s sure to create moments of drama in the months to come.
Brewer’s tax-cut plans are a little less damaging to the state, but both have the same problem: The state is facing huge deficits now and into the future, so reducing revenues will only make that problem worse.
The Republicans kinda acknowledge that there’s a problem, in that they say that they want the tax cuts to take effect years from now. Brewer, in particular, says she doesn’t want her proposed corporate tax cuts to kick in until after the one-cent sales tax goes away in two years.
Of course, when the one-cent sales tax goes away, the state will have another billion-dollar shortfall, so it’s not like it’ll be easier to afford a tax cut then, either.
Here’s an idea: Why don’t we stick with our current taxes and see whether the economy recovers? And if we can afford tax cuts in a few years, why not allow the lawmakers who are in office at that point to decide the best way to finance the state, rather than tying their hands?
SPEAKING OF THE STATE’S FINANCES ...
We saw some good news in the most recent report from the Joint Legislative Budget Committee: In October 2010, the state brought in more money than it did in October 2009.
That’s the first time that the state has seen sales-tax revenues improve on a year-to-year basis since December 2007.
So, hey: We really may have hit the bottom!
But here’s the bad news: The state still isn’t collecting as much money as economists predicted when the budget was put together. Through the first four months of the fiscal year, the state was $41.2 million below the forecast.
WHAT WE’VE GOT HERE IS A FAILURE TO COMMUNICATE
The Tucson City Council tried to hash out their differences with state lawmakers last week—but the whole thing turned into a fiasco.
First of all, only one Republican lawmaker showed up at the confab: Rep. Vic Williams, who was under the impression that it was an informal chance to chat, not a full-on formal meeting.
Williams tells The Skinny that he didn’t take kindly to the suggestion that the Arizona Legislature is to blame for the city’s problems, given that the City Council has made its share of boneheaded spending decisions in recent years. And he says that, like it or not, the city is likely to see more cuts in funding in the upcoming year.
”We just can no longer afford the level of government we’ve had in the last 10 years,” Williams says.
LET’S NOT BE TOO TOUGH ON ANYONE
Congressman Raúl Grijalva was one of two Democrats in the Arizona congressional delegation to vote against censuring Congressman Charlie Rangel of New York. Rangel was facing a number of ethics charges related to his failure to pay income taxes and some fast-and-loose fundraising strategies.
Grijalva spokesman Adam Sarvana tells The Skinny via e-mail that Grijalva voted against censure because he thought it went too far, especially when compared to a similar case involving former House Speaker Newt Gingrich back in the ‘90s.
”Gingrich was reprimanded (not censured) when he was fined $300,000 for multiple rules infractions regarding his use of congressional staff time and material for campaigning,” Sarvana wrote. “Censure has only been handed down a few times, and then for things like affairs with interns. The Ethics Committee lawyer who investigated Rangel told the committee he didn’t believe Rangel ever intentionally profited from illegal activity, so my boss felt a reprimand was the most appropriate response.”
Congresswoman Gabrielle Giffords, the Democrat who represents Southern Arizona’s District 8, voted in favor of the censure.
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