State Budget “Collateral Damage”

Posted by AzBlueMeanie:

When the Accidental Governor vetoed the package of budget bills on July 1, her intent was to create "collateral damage" to state agencies (and GOP policies embedded into budget bills) to force compromise on a budget more to her liking. No urgency at Capitol as budget woes loom

What is some of this "collateral damage" that must be dealt with quickly?

If lawmakers want to prevent a property-tax increase, they have until mid-August to act.

That is the deadline for county treasurers to calculate tax bills before mailing them to property owners by Oct. 1.

If those bills were sent today, they would include the education equalization tax, which is back on the books after a three-year suspension. The tax would mean $58 more for the owner of a home assessed at $176,200, the median value in Maricopa County, according to an analysis The Arizona Republic did earlier this year.

The bigger impact would be on businesses; the state's largest business properties have saved about $140,000 a year each, the analysis found.

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The governor's veto stamp created other problems that could make it difficult, if not impossible, for state agencies to operate after a few months.

"They were caught up in collateral damage," Senseman said, adding that the governor was aware of the consequences when she vetoed 14 bills on July 2. They include:

• The Arizona Corporation Commission will lose the ability to let businesses incorporate in this state after Sept. 30. The commission's corporation division will run out of money by that date without a new budget.

"That's not good policy when the state is facing the worst recession since the Depression," commission Chairman Kris Mayes said. "We just can't not be there when people want to form a new business in Arizona."

Not only would it send an unfriendly signal to business, Mayes said, Arizona also would lose revenue those businesses would bring in.

The same clock is ticking on funding the commission's securities division, which enforces civil securities fraud in Arizona.

• The state Parks Department lost $6.6 million in operating authority when the vetoes hit. On top of a combined $50 million in recent cuts, the state parks have little left to run on, said Jay Ziemann, the agency's legislative liaison.

"We've got dribs and drabs," he said, noting a $1.9 million loan will help, as well as leftover money from last year's budget.

"This month, we're going to be OK," he said. "But shortly after, we're going to need our operating budget."

• The state Registrar of Contractors office lost the ability to raise more money for its homeowner recovery fund. With a reduced staff, the state's ability to process claims from homeowners who say they were ripped off by licensed contractors is limited, said Tyler Palmer, the agency's budget analyst and legislative liaison.

The veto leaves the agency with $400,000 to carry it through the next 12 months, a 60 percent drop from normal funding levels.

The state education equalization property tax is not that critical. The Legislature could always vote to extend the suspension period rather than outright repeal of the tax. It would have the same effect, and the Accidental Governor would likely feel compelled to compromise. The Legislature would then attempt repeal the tax in the next session.

The funding for state agencies will become critical for a number of state agencies shortly, more than those briefly referenced in this article. When government agencies begin shutting down, that is when the public begins to take notice.