Budget Update: Five-Way Budget Talks Fall Apart

Posted by AzBlueMeanie:

Monday went from bad to worse at the state capitol. First the bad. The Arizona Capitol Times blog reported Five-party talks in peril:

Rep. Kyrsten Sinema spoke to our reporter at the conclusion of today’s five-party talks. “I’m not sure there’s going to be any more of those meetings,” she said. She identified the repeal of the equalization tax as the biggest obstacle. She said Republicans “won’t budge” on reinstating the tax, so the Dems asked the GOP to come up with other sources of $250 million to restore cuts to education and social programs. They refused, she said. The Dems agreed to the sales tax referral, all the BRB provisions and cuts deeper than what they wanted and asked only for K-12 funding, no prop tax repeal and a rebate to help the poor absorb the tax increase.

“We’ve moved a ton – even more than we thought our caucus would, she said, adding that the package they were willing to accept would likely not get the support of their entire caucus “because it’s too conservative.” But, she said she got the impression that Republicans didn’t want to lose a single vote. “That’s not bargaining. That’s ridiculous,” she said.

Meanwhile, another source said that many Dems now believe that Brewer will sign the budget and blame the deep cuts on the Dems’ unwillingness to support the sales tax referral that would have restored some of those cuts.

Now the worse. In a later report, "Democratic leader: Five-party talks fall apart" (subscription required), the Arizona Capitol Times reported:

Last-ditch budget negotiations between Republicans and Democrats appear to have fallen apart, which makes it unlikely Gov. Jan Brewer will see her sales-tax-increase proposal on a ballot any time soon.The governor was unable to win the support of enough Republican lawmakers to pass the measure, which would have allowed voters to weigh in on a three-year sales tax hike. After weeks of unsuccessful wrangling, Brewer turned to the Democrats.

She and Republican lawmakers met with minority party leaders in an attempt to curry favor for the proposal. But those talks have not led to an agreement, and Democratic leaders are saying one may not be in the offing.

“I’m not sure there’s going to be any more of those meetings,” House Assistant Minority Leader Kyrsten Sinema said after today’s (Aug. 31) meeting ended.

* * *

The biggest obstacle to a deal appears to be the equalization property tax: Republicans insist that the statewide property tax, which has been suspended since 2006, be permanently repealed, while Democrats argue that the $250 million it would generate is essential for education and social programs.

Sinema said Democrats were prepared to accept the sales tax ballot referral, “deep cuts” to state spending and a variety of policy changes if the Republicans would have found $250 million elsewhere in the budget to restore the cuts to education and social services.

“We’ve moved a ton – even more than we thought our caucus could,” she said.

Brewer spokesman Paul Senseman said it is still possible that holdout Republicans will change their votes and support the tax increase measure.

And pigs could fly if they had wings, but it ain't gonna happen.

Let's review: On June 4 the GOP-controlled legislature passed a GOP-only budget not to the Accidental Governor's liking, but refused to transmit the budget to the Governor. She filed a special action in the Arizona Supreme Court and won a split decision. The GOP-controlled legislature approved nearly the identical GOP-only budget on July 1 and transmitted it to the Accidental Governor. She promptly vetoed it as "fatally flawed" and ordered the Legislature back into Special Session.

The GOP insane clown posse leadership head faked Democratic leaders with faux promises of bipartisan budget negotiations, while working a back room deal with the Accidental Governor for a GOP-only "Sham-Wow!" budget deal. Only the GOP insane clown posse couldn't count votes even within its own caucus so the "Sham-Wow!" budget deal died for lack of 16 votes in the Senate in the eighth week of the Special Session. The GOP insane clown posse finally just gave up, and sent the Accidental Governor the identical budget from July 1 that she had vetoed as "fatally flawed," and adjourned sine die.

After a little more than 10 days of five-way budget negotiations with Democrats for the first time in this process (something which should have begun back in February when Jan Brewer first became the Accidental Governor), the parties apparently are at an impasse, with the same "fatally flawed" GOP-only budget that had been passed on June 4 and July 1.

Oh, and the Joint Legislative Budget Committee reports that sales tax and income tax revenues are lagging well below earlier projections, so this GOP-only budget is still not balanced as required by the Arizona Constitution. As budget stays unresolved, report shows state revenues down, recession lingering (Arizona has a budget approved for the new fiscal year, which began July 1, but it has a projected shortfall of approximately $3.2 billion due to vetoes by Gov. Jan Brewer and subsequent action by lawmakers to provide school funding. The state finished the last fiscal year [FY 2009] on June 30 with a shortfall approaching $500 million.)

This is without comparison the most dysfunctional state government Arizona has ever had. The blame lies squarely with ideological extremist "no tax" pledge Grover Norquist Republicans. But the Accidental Governor will blame the Democrats to whom she barely spoke for her being forced to sign this "fatally flawed" GOP-only budget? How f#?ked up is that? (She has until Saturday, September 5 to sign).

Signing this GOP-only budget will only allow the state to make arrangements to borrow additional money to cover the continuing deficit. I have been told that there are discussions for a series of special sessions this fall to deal with particular budget items — almost certainly more cuts to programs since additional revenue is a non-starter within the GOP caucus.

If you think this has been a wild ride boys and girls, you ain't seen nothing yet. The FY 2011 budget negotiations get underway in January, during a highly charged election year. Fasten your seat belts.