It's hardly a modest wish list. Napolitano wants to juggle the books to spend more on education, highways and health-care coverage for kids while preserving more of the vanishing landscape and finding ways to preserve water and air quality.
But to make it happen, Napolitano will have to tame the GOP caucus, which plans to perform its own dog-and-pony show.
Still, Napolitano is cracking her whip over a Legislature that may prove to be slightly more moderate than the last one. The acrimonious 2006 session got off to a rough start, with the GOP leadership complaining Napolitano had betrayed them over a budget deal the previous year, and dragged on until June, when a new budget deal was finally drafted.
Republicans still control the Legislature; the Senate's split between 17 Republicans and 13 Democrats, while the House has 33 Republicans and 27 Democrats. But in the November election, Democrats gained one seat in the Senate and six in the House of Representatives, which means that squishy Republicans such as Pima County's Pete Hershberger and Jennifer Burns are in a position to block some legislation--or at least extract concessions in return for their votes.
Rep. Jim Weiers of Phoenix has managed to hold on to his post as speaker of the House (and has dismissed the idea that Napolitano has some sort of public support just because she captured more than 62 percent of the vote in November). But with last year's Senate president, Ken Bennett, forced out by term limits, there's new leadership in the upper chamber: Republican Tim Bee of Tucson won the post of Senate president in the wake of the November election.
Bee's not the only Southern Arizonan in a leadership position. The Senate's minority leader is Democrat Marsha Arzberger of District 25, which includes Marana, Willcox and parts of Sierra Vista, while the House minority leader is Phil Lopes of Tucson's District 27.
When you include Tucsonan Jan Lesher, who was just promoted from running Napolitano's Tucson office to head of the Arizona Department of Commerce, and Si Schorr, who is set to become vice chair of the State Transportation Board, it appears that there could be considerable opportunities for Southern Arizona on the horizon.
TREASURY DEPARTMENTLast year, despite--or perhaps because of--all the battles between Napolitano and the GOP caucus, lawmakers got a lot done: They extended all-day kindergarten, created the state's first--albeit modest--voucher program to let public dollars fund private schools, cut the state's income and property taxes, set aside $300 million to accelerate highway construction, extended the life of Tucson's Rio Nuevo project and gave raises to state employees.
Few observers are expecting that kind of action this year, for one simple reason: money. Thanks to a booming economy in the last fiscal year, the state brought in more than $612 million above the original forecast for the fiscal year.
While the staff of the Joint Legislative Budget Committee is still doing financial acrobatics, everyone agrees that the days of 20 percent growth in tax revenues are over for the foreseeable future. The most recent JLBC report showed that through the first five months of the fiscal year, the state is about $87 million ahead of projections, but the cash flow in several months has fallen short of estimates--including the most recent month, November, which came in $10.6 million below expectations.
Meanwhile, JLBC director Richard Stavneak has warned that lawmakers have already made big commitments for the '08 budget, including a 5 percent cut in income taxes and full implementation of all-day kindergarten.
Add to that the formula-driven growth of education and health care, as well the continuing needs of the prison system, and you end up with a simple bottom line: There's not much money left over for expanding programs or creating new ones.
As part of last year's budget deal, lawmakers made a permanent 5 percent cut in income taxes in 2006, with a plan for another 5 percent cut in income taxes this year. They also eliminated a state property tax that supported education programs, but only for three years.
Bee says Republicans want to make that property-tax cut permanent, but Lopes says Democrats will fight that proposal, warning that if the economy sours, "We could be in a world of hurt."
GROWING CONCERNSo what is on the agenda? The sound and fury over illegal immigration that dominated last year's session isn't going away, according to lawmakers from both parties, but the details of any legislation remain sketchy. Bee says he wants to review what the federal government has done in the last year so that action at the state level will supplement rather than duplicate the feds. Both Republicans and Democrats are talking about sanctions for employers who knowingly hire illegal immigrants.
Lopes says Democrats want to introduce a resolution supporting federal legislation for a guest-worker program similar to the Kennedy-McCain immigration-reform package, while House Republicans may take another look at spending money on technology, such as a radar system on the border.
Lopes says Democrats will also attempt to reform a law passed two years ago that allowed the state to prosecute coyotes who smuggle illegal immigrants into the country. Maricopa County Attorney Andrew Thomas has been using the bill to bring conspiracy charges against illegal immigrants themselves.
Despite its impact on the state, immigration is really a sideshow act, because most of the real action has to happen at the federal level.
Arizona's rampant development is shaping up to be the main event at the Capitol this year. With Arizona now the fastest-growing state in the country, development is at the root of many of the problems facing the state--overcrowded streets, overcrowded classrooms, a vanishing desert, dwindling water supplies and other challenges to maintaining a decent quality of life.
Because it affects nearly everyone in the state, transportation is at the top of the list of issues to tackle. In her State of the State speech, Napolitano called for a cut in the "time tax we pay every time we sit stuck in traffic that should be moving."
Napolitano called on lawmakers to change state law to allow the state to bond for 30 years instead of 20, which she said would free up $400 million to accelerate highway construction.
But Republicans are loathe to borrow money for any purposes, preferring a pay-as-you-go strategy. Sen. Bob Burns, a Phoenix Republican, has already sponsored a bill to pull $450 million from the state's recently filled rainy-day fund to accelerate highway construction, much to the dismay of Sierra Club lobbyist Sandy Bahr, who reckons that more roads mean more cars and more pollution.
Other ideas on the table: Rep. Tom Prezelski is sponsoring legislation that would link the state's gas tax to the rate of inflation, though even he's skeptical that Republicans will support the bill. Lopes says House Democrats want more funding, not only for wider highways, but also rail service between Tucson and Phoenix--an idea that came up in Napolitano's State of the State speech on Monday, Jan. 8.
Napolitano also called for better water conservation and planning, as well as efforts to protect air quality, and called on lawmakers to take another stab at state trust land reform, which failed at the ballot box last November.
"We must also protect our access to open space, particularly in our urban counties," Napolitano said. "Without state trust land reform, our ability to protect these lands for their conservation values may be in question."
Lopes says Democrats plan to focus on incentive programs for alternative energy, such as solar and wind power.
CLASS ACTIn her Monday speech, Napolitano said all public school teachers in Arizona should make at least $33,000 a year and suggested that experienced teachers deserved raises beyond that. She said they also needed new training programs to "successfully create a cutting-edge learning environment for their pupils."
Napolitano also called on lawmakers to increase the high school dropout age from 16 to 18 and require four years of high school math instead of two years, as well as three years of science to "change our learning environment to match 21st-century needs."
But she's already running into opposition with that plan. GOP State Superintendent of Public Instruction Tom Horne, for example, argues that not every student needs four years of math. He warns that increasing the math requirement will lead to more dropouts.
Horne has a few ideas of his own: He wants lawmakers to increase funding for charter schools, saying they don't have as much funding as their traditional public-school counterparts.
But don't look for an expansion of the state's new voucher program. Bee says the state needs to see how last year's program works out--and whether it survives a legal challenge--before extending it.
Lopes says the Democrats support Napolitano's call to boost teacher salaries and mandate smaller class sizes, which means creating more classroom space--which means more school construction.
Bee says the state needs to take a new look at how school construction is funded, saying that the costs are growing so quickly that between the time the school construction is approved and the building gets underway, shortfalls are developing.
Besides K-12, there's the issue of higher education. With the ongoing tuition increases at the state universities, Napolitano wants to increase the availability of financial aid.
"Graduation from high school is no longer good enough," she said. "Students need training beyond that, be it technical education, community college or university study."
Bee says that another challenge is extending the universities to new, high-growth areas of the state.
COVER MELopes says Democrats want to make it easier for small businesses to get health insurance through a state program called Healthcare Group of Arizona, which helps businesses provide health insurance to their employees. Right now, businesses and individuals can't buy into Healthcare Group unless they haven't had insurance for at least six months. The Democrats want to eliminate that waiting period.
But Republicans say that would create too much competition for private insurance companies--and the insurance companies are certain to be lobbying that same point.
Napolitano wants an expansion of state-subsidized health insurance for every person under the age of 19 living in households earning less than $60,000.
"Only five states have a higher rate of children without health insurance," Napolitano said. "We owe it to our children to do better--we owe it to their future."
She also called on lawmakers to repeal a law preventing schools from letting up to 100,000 students statewide know that they are eligible for coverage through KidsCare or the Arizona Health Care Cost Containment System.
"I call on you to repeal the gag rule," Napolitano said. "Let teachers talk to parents, so that our children can get the health care they deserve."