GOP legislative leaders, Ducey reach deal on budget proposal

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PHOENIX (AP) - Republican leaders in the Legislature and Gov. Doug Ducey have hammered out an agreement on a budget plan that cuts more money from universities but gives more to K-12 schools than the governor initially proposed.

The deal announced Wednesday also eliminates the only major revenue increase in Ducey's proposal after it faced stiff opposition from conservative GOP legislative leaders.

House Speaker David Gowan and Senate President Andy Biggs negotiated the changes to Ducey's budget proposal for the fiscal year that starts July 1. The major changes were confirmed by Biggs and other Senate leaders and House press officer Stephanie Grisham.

The agreement is significant because both the Senate and House leadership are on board with the governor - a change from recent years that delayed action on the budget.

The governor's initial plan slashed $75 million from state university funding, but pressure was mounting from some in the Legislature for cuts larger than his 10 percent.

The deal puts the university cuts at just over $100 million - larger than the governor's proposal but less than feared by university backers, said Senate Majority Leader Steve Yarbrough. The Chandler Republican also provided outlines of the rest of the proposal.

Amid skepticism from other lawmakers, Yarbrough and Biggs said they hoped to win passage of the proposal this week.

"What we're trying to do is make sure that all issues have been narrowed, completed and resolved as much as possible, and then we would try to move it as quickly as we could," Biggs said, adding that he expects the Legislature to work on Friday and possibly Saturday to enact the budget.

Opposition to quick passage is likely to come from within Biggs' own party, however.

"I just don't see it moving that quickly," said Rep. Bob Robson, R-Chandler. "Members have to have an opportunity to touch it and feel it, so to speak, to own it."

Robson was among a group of moderate lawmakers who delayed last year's budget proposal from moving because they wanted to see changes.

Several House Republicans said they were not prepared to vote for the plan, including freshman Rep. Noel Campbell, R-Prescott.

"I understand the strategy, which is strike while the iron's hot, get it over the hump," Campbell said. "But there are so many things that need to have a slowdown."

Campbell said counties "are getting screwed" in the budget proposal and he wanted to see more revenue in the budget to help prevent those cuts.

Community colleges in Pima, Pinal and Maricopa counties would lose all state funding instead of the half that Ducey proposed, about $20 million instead of $10 million.

The university and community college cuts will likely lead to increases in tuition, fees or property taxes, one Democratic lawmaker said, leaving Ducey's "no new taxes" plan intact - at least at the state level.

"The governor may have said there's not going to be a tax increase, but taxes will be increased," said Rep. Mark Cardenas, D-Phoenix. "It's a matter of who's going to do it. Right now it's going to have to be a property tax done by the community colleges or an increase in tuition and fees. So it's either a tax increase on students or a tax increase on property."

Sen. John Kavanagh, R-Fountain Hills, said the negotiated budget includes a total of $102 million more for K-12 education, up from the $11 million net increase Ducey proposed before.

Ducey originally proposed increasing K-12 classroom funding by $134 million while forcing schools to cut non-classroom spending by $123 million.

Both the new and initial budgets fail to fund schools at a court-ordered level - which would have boosted 2016 spending by $336 million. Lawyers for the Legislature and schools who sued after previous budget cuts are negotiating to resolve the case.

And Democrats said Republicans were playing games by including required "baseline" budget increases to account for student growth as new money to boost their overall bottom line.

"To say (that it's) $102 million over the baseline you have to say that the baseline is new money, which it's not," said Sen. Steve Farley, D-Tucson. "It's actually a $74 million cut over what they are supposed to be getting."

Changes also have been made to Ducey's proposal to add 3,000 private prison beds over the next three years. The emerging plan reduces that number to 1,000 beds to be phased in in 2017 with another 1,000 optional in 2018. In the meantime, counties would be allowed to bid to provide additional beds.

Also cut from Ducey's original proposal is an increase in the state vehicle license fee that was expected to raise $30 million to fund the highway patrol. That faced stiff opposition from conservatives who oppose any tax increases.

The governor's proposal included overall general fund spending for the 2016 budget year of $9.1 billion, a decrease from last year's nearly $9.3 billion plan.

Senate appropriations committee chairman Don Shooter said he expects the funding plan to move swiftly through the Legislature.

"I'm sure there will be adjustments, but we think we have the votes to get this done," Shooter said. "It's our intention to proceed as quickly as possible to get this to the governor's desk."

Ducey spokesman Daniel Scapinato confirmed the agreement.

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