Published Online: July 7, 2009

Ariz. Legislators Restore Vetoed School Funding

The Arizona Legislature met in special session Monday, with lawmakers quickly approving bills to restore vetoed funding for K-12 public schools and keep the state eligible for billions of dollars of federal stimulus funding.

The centerpiece of the four-bill package approved unanimously Monday appropriated nearly $3.3 billion of school funding, about $500 million more than in a budget provision Gov. Jan Brewer had vetoed.

While Democratic Rep. Kyrsten Sinema of Phoenix said the legislative action ensures that school funding "is not left in limbo," Republican Sen. John Huppenthal of Chandler warned that the state's continuing budget troubles mean the new school funding is merely an "empty promise."

"The cash isn't there to back it up," Huppenthal added.

Brewer, a Republican whose vetoes precipitated the legislative response, said she'll sign the bills negotiated by Republican and Democratic leaders and said they bode well for the further action needed to balance the budget.

"I think it is the beginning of people hopefully taking their political banner and working together to do what's right for Arizona," Brewer said.

Brewer vetoed the school funding and other key parts of the budget, calling them inadequate, just hours after the Legislature approved it Wednesday.

While objecting to some budget provisions, Brewer also particularly wanted lawmakers to send her proposed sales-tax increase to voters. Most lawmakers balked at the possibility of a tax increase which Brewer contends is needed to help preserve important state services in the face of budget shortfalls.

Despite the veto of K-12 education funding, school districts weren't yet in a funding pinch. That's because the system on Wednesday received a $600 million appropriation that was delayed from the last fiscal year to help balance that budget. However, charter schools aren't included in that $600 million payment and now must await a regularly scheduled July 15 payment that Brewer's veto would block.

The four bills approved Monday didn't touch the sales-tax issue but lawmakers acknowledged they still face what could be weeks of further negotiations to settle remaining budget differences among themselves and with Brewer.

"This is a stopgap measure here," said Senate Appropriations Chairman Russell Pearce, R-Mesa.

Indeed, the budget remains out of balance by $2.1 billion, said Richard Stavneak, the Legislature's budget director.

At the start of the special session, Stavneak said during a briefing of lawmakers that Brewer's line-item vetoes of portions of the budget's main spending bill and vetoes of entire companion bills apparently meant the state was not in compliance with federal requirements for stimulus funding.

Without any money appropriated for K-12 schools, the state wasn't maintaining its spending at the level required by the stimulus program, putting $1 billion of "stabilization funding" for education and general government in jeopardy, Stavneak said.

An additional $1.3 billion of stimulus funding for health care for the poor was at risk because Brewer vetoed a budget bill that had provisions needed to hold down counties' costs, Stavneak said.

"I don't know that the governor's office fully understood what they were doing with these vetoes but if they did it was entirely reckless," said House Speaker Kirk Adams, R-Mesa. "It imperils all of the stimulus money."

The bills approved Monday tackled the stimulus concerns by appropriating K-12 school funding and approving anew the provisions to hold down counties' costs for health care.

However, lawmakers did not address other vetoes that moved the state away from a balanced budget.

Those included vetoed bills or provisions that eliminated $775 million of spending cuts throughout parts of state government and erased $1.3 billion of other budget-balancing steps, including $735 million of borrowing through refinancing prisons and other state facilities.

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