Amid heated debate over budget cuts in the state Legislature, House Democrats introduced a set of budget options Thursday. They say these options will help balance the state budget without making the massive cuts to higher education proposed earlier this month.
The Democrats’ proposal calls for $7 million in cuts to higher education in the 2009 fiscal year, a sharp contrast to the $175 million proposed by the Joint Legislative Budget Committee earlier this month.
Rep. Chad Campbell, D-Phoenix, said the new proposal includes a measure called tobacco securitization, in which the state would borrow money from an outside source to help cover the budget shortfall and use tobacco tax revenues to pay it back.
“We’re taking a one-time cash infusion based on projected tobacco revenues,” Campbell said. “It’s not a loan per se, because you’re just taking an advance one-time payment of money that you’re getting in.”
Campbell said the proposal would help keep the budget cuts at a minimum, including the proposed $480 million in university funding that legislators could be cut over the next two years.
“In all likelihood, we’ll have to make cuts to all parts of the budget, to some degree,” Campbell said. “Our options would drastically reduce those cuts.”
Rep. David Schapira, D-Tempe, acknowledged that the plan assumes an economic recovery in the next three or four years.
“If the economy does not recover in the next few years, we will have to make even more drastic cuts,” Schapira said.
Rep. John Kavanagh, R-Fountain Hills, described the measure as “pushing the problem down the road,” and said it would force the state to use tobacco revenues, normally used for state programs, to pay off debt.
“They’re basically going to sell future tobacco tax and lottery revenues for cash,” Kavanagh said. “It’s mortgaging the future to pay for the present.”
Kavanagh said the details of such an arrangement could not be carved out in time to fix the 2009 budget.
“There’s no specifics as to what mechanisms [to use], who would do it,” Kavanagh said. “We really have to get a fix for the ’09 budget through by mid-February … [The Democrats’ proposal is] just not something that can be done quickly.”
Campbell said the Legislature would sacrifice future economic development and growth by making massive funding cuts to education.
“The fundamental [question] is, ‘Are we willing to sacrifice education to make short-term cuts?’” Campbell said. “The goal of the Democrats is to make sure Arizona not only survives this downturn but making sure Arizona is still a strong and competitive state in a year or two.”
Virgil Renzulli, a spokesman for the University, offered no comment on the proposals.
Reach the reporter at derek.quizon@asu.edu.
