ARIZONA HOUSE OF REPRESENTATIVES
Forty-seventh Legislature – Second Regular Session
Minutes of Meeting
House Hearing Room 1 -- 1:30 p.m.
Chairman Pearce called the meeting to order at 1:50 p.m. and attendance was noted by the secretary.
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Ms. Aguirre A |
Mr. Farnsworth |
Mr. Tom |
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Mr. Biggs |
Mrs. Gorman |
Mr. Weiers JP |
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Mr. Boone |
Mrs. Groe |
Mrs. Mason, Vice-Chairman |
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Mrs. Burges |
Mrs. Knaperek |
Mr. Pearce, Chairman |
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Ms. Cajero Bedford |
Mr. Lujan |
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Mr. Brown
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H.B. 2100 – DP (13-1-0-1) H.B. 2129 – HELD
H.B. 2190 – DP (9-4-0-2) H.B. 2360 – DPA (14-0-0-1)
H.B. 2371 – DPA (13-1-0-1) H.C.R. 2007 – DP (8-4-0-3)
H.C.R. 2021 – HELD H.C.R. 2022 – DP (7-5-1-2)
H.C.R. 2037 -- HELD
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Garrett Workman, Majority Intern
Representative Steve Tully, Sponsor of H.B. 2371
John Driggs, Public Member, Arizona Historical Advisory Commission
Mike Huckins, Majority Research Analyst
Barb Dickerson, Lobbyist, Restaurant and Hospitality Association
Rene Guillen, Majority Assistant Research Analyst
Kevin McCarthy, President, Arizona Tax Research Association (ATRA)
Lorenzo Martinez, Senior Fiscal Analyst, Joint Legislative Budget Committee
Kevin Bates, Fiscal Analyst, Joint Legislative Budget Committee
Kimberly Cordes-Sween, Fiscal Analyst, Joint Legislative Budget Committee
Doris Schriro, Director, Arizona Department of Corrections
Tixoc Munoz, Correctional Officer, Lewis Complex
(Names of persons who did not speak, pages 4, 5, 6, 7, 9, 10, 11 and 12)
CONSIDERATION OF BILLS
H.B. 2129, game and fish; enforcement; penalties – HELD
H.C.R. 2021, truth in budgeting and accounting – HELD
H.C.R. 2037, emergency management; border wall; appropriation – HELD
Chairman Pearce announced that H.B. 2129, H.C.R. 2021, and H.C.R. 2037 will be held.
ADOPTION OF BUDGETS
Vice-Chairman Mason moved that the JLBC recommendation for the Arizona Community Colleges in FY 2007, including footnotes, format, performance measures, and statutory changes, if applicable, be included in the proposed budget legislation with the following changes:
· Add $3 million from the General Fund in FY 2007 to Pinal Community College District’s capital outlay state aid, and add the following footnote: “Of the $3,789,800 Pinal Community College receives in Capital Outlay State Aid, $2 million shall be used for the construction of the regional officers training center, and $1 million shall be used for the firefighters training facility at Central Arizona College.”
The motion carried.
Vice-Chairman Mason moved that the JLBC recommendation of the Board of Medical Student Loans in FY 2007, including footnotes, performance measures, and statutory changes, if applicable, be included in the proposed budget legislation with the following changes:
· Add $296,600 from the Medical Student Loan Fund in FY 2007.
The motion carried.
Vice-Chairman Mason moved that the JLBC recommendation of the Department of Juvenile Corrections in FY 2007, including footnotes, format, performance measures, and statutory changes, if applicable, be included in the proposed budget legislation with the following changes:
· Reduce ($493,000) and (13) FTE positions from the General Fund and add $100,000 and 3 FTE positions from the Criminal Justice Enhancement Fund in FY 2007 to reduce the increase in funded beds. The appropriation shall permit the department to increase its bed capacity from 623 in FY 2006 to 655 in FY 2007, the level recommended by the Executive. The original JLBC baseline would have funded 671 beds.
· It is the intent of the Committee that the department request a risk management loss control grant from the Arizona Department of Administration to bring a well at the Adobe Mountain School into compliance with new federal arsenic regulations.
· It is the intent of the Committee to reconsider the Department of Juvenile Corrections salary adjustments upon finalization of the Department of Corrections salary adjustments.
The motion carried.
Vice-Chairman Mason moved that the JLBC recommendation for the Department of Public Safety (DPS) in FY 2007, including footnotes, format, performance measures, and statutory changes, if applicable, be included in the proposed budget legislation with the following changes as stated on the two-page document (Attachment 1). The motion carried.
CONSIDERATION OF BILLS (CONTINUED)
H.B. 2371, Arizona centennial; funds; appropriation – DO PASS AMENDED
Vice-Chairman Mason moved that H.B. 2371 do pass.
Vice-Chairman Mason moved that the three-page proposed Mason amendment to H.B. 2371 dated 02/06/2006 2:07 PM (Attachment 2) be adopted.
Garrett Workman, Majority Intern, explained that H.B. 2371 appropriates an unspecified sum from the General Fund in FY 2006-2007 to the Arizona Historical Advisory Commission for a statewide plan, activities, and projects relating to the Arizona Centennial Celebration, and requires the director of the Arizona Historical Advisory Commission to accept and spend these monies (Summary, Attachment 3). The proposed amendment contains the following provisions:
Representative Steve Tully, Sponsor, said this issue was brought to him by Mr. Driggs who is on the Centennial Commission, which was set up several years ago to plan for the Arizona Centennial Celebration, which is rapidly nearing. The Commission is to identify projects to celebrate the centennial, but cannot do much without money. The specified amount will be filled in, which would be matched by private donations to fund projects authorized by the Commission.
John Driggs, Public Member,
Arizona Historical Advisory Commission, spoke in favor of
H.B. 2371. He related that the Commission has been meeting for several months
and is in the process of developing a statewide plan. The bill setting up the
Commission last year did not appropriate staff or money. The charge of the Commission
is to advise the Legislature on historic matters related to the centennial,
develop an education program for elementary students on state history, and recommend
legacy events and legacy projects to commemorate the Centennial, which he takes
as to develop permanent long-standing projects that commemorate the centennial to
showcase Arizona as an economic development powerhouse with a tremendous
history. The Commission can recommend projects, but resources are needed, so
this bill would appropriate a set amount of money. There is a match
requirement that is somewhat different than most. Whatever the Legislature
appropriates would be held and could not be used until matching funds are
provided from other sources (private corporations, foundations, local
governments, or grants from the federal government, Indian tribes, or
universities). The bill also provides that as the matching funds accumulate,
the funds can be used to plan legacy projects.
Mr. Driggs related to Mr. Farnsworth
that as dynamic as Arizona is, and since it is the last of the
48 adjacent states to host a centennial, it should be the biggest and the best;
therefore,
$10 million would be a good amount to appropriate.
When Mr. Biggs questioned the language on the Summary stating that the monies shall be deposited in an Arizona Centennial Account in the State Treasurer’s Office by a statewide nonprofit community foundation that has endowments of more than $400 million, Mr. Tully pointed out that the language is deleted with the proposed amendment, and the money will be held by the State Treasurer.
Question was called on the motion that the three-page proposed Mason amendment to H.B. 2371 dated 02/06/2006 2:07 PM (Attachment 2) be adopted. The motion carried.
Vice-Chairman Mason moved that H.B. 2371 as amended do pass. The motion carried by a roll call vote of 13-1-0-1 (Attachment 4).
Names of persons in favor of H.B. 2371 who did not speak:
Russell Smoldon, Lobbyist, Salt River Project
Steve Gervais, Senior Government Affairs Representative, Pinnacle West/Arizona Public Service Company
Name of person neutral on H.B. 2371 who did not speak:
Gladysann Wells, Director/State Librarian, State Library
H.B. 2360, tax exemption; food; school districts – DO PASS AMENDED
Vice-Chairman Mason moved that H.B. 2360 do pass.
Mike Huckins, Majority Research Analyst, explained that H.B. 2360 provides a Transaction Privilege Tax (TPT) exemption for the sale of foods to school districts under the restaurant classification (Summary, Attachment 5).
Mrs. Knaperek asked the average
savings for school districts if the bill goes into effect.
Mr. Huckins responded that he does not know, but it is a common practice to
have this exemption. A few years ago, the Arizona Department of Revenue (DOR)
said it is not clearly defined in statute that foods prepared outside the
school that are delivered and consumed at the school are not exempt, so this
bill would clear up the confusion.
Mr. Huckins advised Mr. Biggs that the maximum fiscal impact on back taxes would be $100,000, but going forward he does not know how much DOR has collected to date.
Mr. Farnsworth related to Mr. Boone that he does not believe the TPT exemption would apply to charter schools because the bill refers to school districts.
Mr. Boone moved that H.B. 2360 be amended as follows:
Page 2, lines 9 and 11, after “DISTRICT” insert “OR CHARTER SCHOOL”
Page 6, line 26, after “DISTRICT” insert “OR CHARTER SCHOOL”
The motion carried.
Barb Dickerson, Lobbyist, Restaurant and Hospitality Association, spoke in favor of H.B. 2360. She said this is an equity issue. Cold foods can be purchased by a school district tax free, but hot foods cannot. Restaurants have been caught in the middle because many school districts tell the restaurants that the food is tax exempt, so the retroactive session law is to resolve that inequity. She clarified that the purpose of the Ways & Means amendment was to include use taxes under the $100,000 cap, so TPT and use tax refunds would be covered. She indicated to Mr. Boone that she endorses the verbal amendment.
Vice-Chairman Mason recognized persons in favor of H.B. 2360 who did speak:
Charles Essigs, Assistant Superintendent, Arizona Association of School Business Officials
Michael Preston Green, Attorney, Arizona Restaurant and Hospitality Association
Vice-Chairman Mason moved that H.B. 2360 as amended do pass. The motion carried by a roll call vote of 14-0-0-1 (Attachment 6).
H.B. 2100, personalized veteran special license plates – DO PASS
Vice-Chairman Mason moved that H.B. 2100 do pass.
Rene Guillen, Majority Assistant Research Analyst, explained that H.B. 2100 allows a request for a veteran special plate to be combined with a request for a personalized special plate and establishes a $50 initial fee for the plate combination and a $25 annual renewal fee (Summary, Attachment 7).
Mr. Guillen advised Mrs. Groe that the Joint Legislative Budget Committee (JLBC) issued a fiscal note estimating that this bill would decrease the State Highway Fund by $17,100 beginning in FY 2007, mostly due to the reduction of the $25 fee. Currently, veteran special license plates and personalized license plates each cost $25. This bill allows an individual to combine the two with a $50 one-time fee and $25 thereafter, which would be the reduction. There is also a comment in the fiscal note that local governments would receive an annual decrease of $16,700 in Highway User Revenue Fund (HURF) distributions. Currently, of the $25 for the special veteran license plate, $17 goes to the Veterans’ Donation Fund, which would remain the same (Fiscal Note, Attachment 8).
Vice-Chair Mason recognized persons in favor of H.B. 2100 who did not speak:
Gary Noviello, Assistant Director, Arizona Department of Veterans’ Services (ADVS), representing self
Mike Klier, Assistant Deputy Director of Operations, ADVS
Patrick Chorpenning, Director, ADVS
Michael Fugate, Administrator, State Approving Agency, ADVS
Frederick Ferguson, Deputy Director, Legion of Valor
Michelle Cummins, Human Resource Manager, ADVS
Gabriel Forsberg, Program & Project Specialist, ADVS
Webb Ellis, Chairman, Unified Arizona Veterans; Arizona Veterans Services Advisory Commission
Luella Emmons, Assistant Deputy Director, ADVS
Question was called on the motion that H.B. 2100 do pass. The motion carried by a roll call vote of 13-1-0-1 (Attachment 9).
H.B. 2190, federal funds; program review – DO PASS
Vice-Chairman Mason moved that H.B. 2190 do pass.
Mike Huckins, Majority Research Analyst, explained that H.B. 2190 requires state agencies to notify the Joint Legislative Budget Committee (JLBC) when applying for federal funds and requires JLBC to review all requests of federal funds for new programs and projects along with future funding of the proposed programs and projects (Summary, Attachment 10).
Vice-Chairman Mason recognized persons in favor of H.B. 2190 who did not speak:
Scott Peterson, Vice President of Public Affairs, Arizona Chamber of Commerce and Industry
Steve Voeller, President, Arizona Free Enterprise Club
Vice-Chairman Mason recognized a person opposed to H.B. 2190 who did not speak:
Kristen Boilini, Lobbyist, Arizona Community Colleges Association
Mr. Biggs, Sponsor, said this notice is already going to the Arizona Department of Administration, so an additional copy would be provided to JLBC. About one-third of the budget consists of federal funds, and in all but five states the Legislatures exercises control over federal funds. He is not asking for control of the federal funds, but would like to at least know what they are.
Question was called on the motion that H.B. 2190 do pass. The motion carried by a roll call vote of 9-4-0-2 (Attachment 11).
H.C.R. 2007, supplemental appropriations; two-thirds vote
Vice-Chairman Mason moved that H.C.R. 2007 do pass.
Mike Huckins, Majority Research Analyst, explained that H.C.R. 2007 requires, upon voter approval, a two-thirds vote of the Legislature to approve supplemental appropriation bills (Summary, Attachment 12).
Mr. Biggs, Sponsor, stated that this is the result of the Working Group from the Joint Appropriations Committee. Last year, over $110 million was spent in supplemental appropriations. The two-thirds vote is consistent with Proposition 108 so supplemental appropriations are not cavalierly provided.
Vice-Chairman Mason recognized persons in favor of H.C.R. 2007 who did not speak:
Scott Peterson, Vice President of Public Affairs, Arizona Chamber of Commerce and Industry
Jennifer Daily, Lobbyist, Arizona Education Association
Janice Palmer, Governmental Relations Analyst, Arizona School Boards Association
Question was called on the motion that H.C.R. 2007 do pass. The motion carried by a roll call vote of 8-4-0-3 (Attachment 13).
H.C.R. 2022, taxpayer bill of rights – DO PASS
Vice-Chairman Mason moved that H.C.R. 2022 do pass.
Rene Guillen, Majority Assistant Research Analyst, explained that H.C.R. 2022, upon voter approval, specifies methods for determining maximum limits on state revenues and expenditures for FY 2008 and each year thereafter (Summary, Attachment 14).
Chairman Pearce stated that this bill passed out of the Committee five times, so testimony will be limited.
Kevin McCarthy, President, Arizona Tax Research Association (ATRA), opposed H.C.R. 2022. He stated that he sympathizes with the underlying intent of the bill, but ATRA consistently tried to make the point to the Legislature and citizens that a flexible budget process at the state level is best. ATRA consistently opposed all initiatives that placed handcuffs on the Legislature, some of which the Legislature imposed, but all of which have complicated and borderline destroyed the state budget process. This bill would be the final nail in eliminating any flexibility to change with the state’s priorities and budget demands over time, and it is simply bad policy. The flexibility to be able to make spending decisions every year should be maintained.
He recommended a statutory limit whereby JLBC would bring a spending limit to the Legislature each year that, if exceeded, would increase spending over population and inflation, with a simple majority vote required to exceed that statutory limit, so there would be flexibility to do so, if necessary. ATRA would have suggested that the Legislature exceed that limit last year to go to cash financing for school construction. The budget increase was about 14 percent last year, but he counted it as about 10 percent because it was a good idea to go from debt financing the School Facilities Board to cash financing. Doing that would have been problematic if this requirement had been in the constitution. The statutory limit would provide the flexibility to be able to make those sorts of decisions if it made sense to increase spending over the statutory level.
Chairman Pearce, Sponsor, stated that some of the problem is not lack of revenue, but overspending. The problem with the Taxpayer Bill of Rights (TABOR) in Colorado is that it was successful, and a lot of money was spent recently to suspend it for five years, which barely passed by 52 percent. This bill includes what was a successful program, but exempts Vehicle License Tax (VLT) and Highway User Revenue Fund (HURF) revenues.
He noted that Arizona has formulas in place to fund schools and public safety. With this bill, the Budget Stabilization Fund (BSF) cannot be used for increased spending, but simply to fund programs the Legislature believes is important if a downturn in the economy occurs. In addition, by a simple two-thirds vote, the Legislature could override the TABOR limits on spending that increase inflation and population. Also, there are other safeguards for the public, for example, in the initiative process that could override the TABOR limit. In Colorado, TABOR worked well, but the spenders did not like the fact that there were handcuffs on spending. He agreed that spending cannot be controlled when there are irresponsible handcuffs, so the intent is to place reasonable handcuffs that control spending. Most of the problems today are automatic formulas that increase spending. This year alone, if the Legislature did absolutely nothing and funded everything that was funded last year, with the exception of what is driven by formula, voter initiatives, and the entitlement programs, an additional $600 million will be spent before there is even a chance to set a priority and decide what is important to the state, and things change from year to year. He believes the Legislature needs the proper handcuffs, and this bill is a great compromise.
Ms. Cajero Bedford disagreed, noting that she understands TABOR was not successful in Colorado. The Governor promoted TABOR, then had to do an about face and tell people it was a mistake and should be undone.
Chairman Pearce responded that at the time TABOR was passed, the Governor, a Democrat and good friend, said the problem was that it worked better than expected and did exactly what the voters anticipated, but it was frustrating to those who thought the ability to grow government was limited.
Mr. McCarthy stated that he is not sure how applicable the Colorado experience is to Arizona. How TABOR played out there would probably be different than this TABOR in terms of impact. If this passes and goes on the ballot and he was working for the state, he could spend above that limit. There is a way to get around the limit. There are multiple relationships with the state, school districts, and counties that allow the state to spend any amount regardless, which is why at the end of the day, what is most important to ATRA is to have people elected to the Legislature or any other public office who are fiscally responsible and will not spend more than should be spent.
He said notwithstanding the current handcuffs, it has been frustrating in years when there was a budget deficit that ATRA could not get the Legislature to agree that it does not have some of the handcuffs that are perceived. The Legislature is compelled to give schools population and inflation growth every year for the entire formula, which does not have to be done. Despite every effort to convince the Legislature that it did not have to go into debt to fund that, many lawmakers were comforted by the fact that there was a fake set of handcuffs, which eliminated the ability to be able to make a tough decision to cut budgets to fund other programs that did not have mandated spending. People need to be elected who will make tough budget decisions.
Chairman Pearce submitted that forcing the Legislature to live within the budget and set priorities is good. The state is experiencing a year of plenty, and it is much more difficult to get a budget out when there is money to spend than when there is not enough money and the Legislature can say no. He understands both sides of this issue, but believes this is a good start with responsible government.
Mr. Lujan asked why VLT and HURF are excluded. Chairman Pearce responded that many things are done to accelerate the freeways, and HURF is taken out because it is not General Fund dollars and it is set up in a formula so it grows faster than inflation by the fact that the newer cars come in on the VLT and the older cars fall out, so there is a huge front end gain when new cars come in and a small $25 VLT for cars that fall out. Because of the makeup, it accelerates through, and again, because it is not General Fund dollars, it is proper to exclude.
Mr. Lujan asked what programs the bill attempts to limit in growth, perhaps education or prisons. Chairman Pearce answered that the intent is to try to set priorities and limit the spending appetite of many people. Education has a formula based on Average Daily Membership (ADM), so it is not at risk. The Arizona Department of Corrections (ADC) is set by a formula, which protects public safety. The bill puts a guardrail around the BSF to make sure the fund will be used only for supplemental purposes when revenues are down and not for growing government, and increases the percentage going to the BSF. Education is probably better protected under this program than it is today because of the way the formula works.
Question was called on the motion that H.C.R. 2022 do pass. The motion carried by a roll call vote of 7-5-1-2 (Attachment 15).
Names of persons opposed to H.C.R. 2022 who did not speak:
Dan Schweiker, Co-CEO, Arizonans Against A Bad Idea
Frank Scarpati, CEO, Community Bridges; representing self
Kay Martin, Chaplain, representing self
Kathy Boyle, Executive Director, Arizona Community Colleges Association
Mike Vespoli, Director of Community Affairs, UFCW Local 99
Mercy Regan, Arizona Interfaith Network
Susan Wilkins, representing self
Kristen Boilini, Lobbyist, Arizona Community Colleges Association
Cynthia Leigh Lewis, ASU Graduate Intern; Protecting Arizona’s Family Coalition
Susan Culp, Assistant Director, Arizona League of Conservation Voters
Suzanne Schunk, Director, Family Support Services; National Association of Social Workers, Arizona Chapter
Scott Peterson, Vice President of Public Affairs, Arizona Chamber of Commerce and Industry
Dinora Reyes, representing self
Pat Matthews, representing self
Gabe Zimmerman, representing self
Christy Farley, Executive Director, Northern Arizona University
Jennifer Daily, Lobbyist, Arizona Education Association
Gerald Flannery, Deputy Manager, Coconino County
Pat Vanmaanen, Health Consultant, Arizona Public Health Association; representing self
Michael Hunter, Assistant Executive Director for Government Affairs, Arizona Board of Regents
Molly McGovern, Organizer, Arizona Interfaith Network
Amy Besing, Legislative Liaison/Parent, Scottsdale Parent Council
Marian Lupu, Executive Director, Pima Council on Aging
Marge Mead, American Association of University Women-Arizona
Matthew Ortega, Assistant Executive Director for Public Affairs, Maricopa Community Colleges
Barbara Meaney, Lobbyist, Vanguard Health Systems
Gini McGirr, President, League of Women Voters of Arizona
David Landrith, Vice President of Policy & Political Affairs, Arizona Medical Association
Tim Hill, Lobbyist, representing self
Rebekah Friend, Lobbyist, Arizona AFL-CIO
David Wells, Faculty, ASU; Board Member, Arizona Citizen Action; representing self
Janice Palmer, Governmental Relations Analyst, Arizona School Boards Association
Barbara Burkholder, Legislative Co-Chair; representing self
Cynthia Zwick, Executive Director, Arizona Community Action Association
Sandy Bahr, Conservation Director, Sierra Club – Grand Canyon Chapter
Stephanie Prybyl, Intergovernmental Affairs Manager, City of Avondale
Tara Plese, Arizona Association of Community Health Centers
Amber Wakeman, Government Relations, City of Tempe
Timothy Schmaltz, Coordinator, Protecting Arizona’s Family Coalition
Dick White, Co-Chair, East Valley Interfaith; Arizona Interfaith Network
Laurie Lange, Vice President Public Affairs, Arizona Hospital and Healthcare Association
Bridget Manock, Government Relations Director, City of Scottsdale
Deanna Patnode, representing self
L. Trimble, Executive Director, Mental Health Association of Arizona
Margaret Snider, Arizona Interfaith Network
Georgia Duncan, Arizona Interfaith Network
Martha Taylor, Arizona Interfaith Network
Sherman Stephens, Arizona Interfaith Network
Greg Fahey, Associate Vice President, University of Arizona
John Zemblidge, Arizona Interfaith Network; representing self
Allison Nagle, Arizona Interfaith Network
Sandra Talamantes, Arizona Interfaith Network
Ian Danley, Arizona Interfaith Network
Sara Brandt, Arizona Interfaith Network
Brenda Ringwald, Arizona Interfaith Network
Bonnie Danowski, Valley Interfaith Project, Franciscan Renewal Center; Arizona Interfaith Network
Chad Campbell, Program Director, Arizona Advocacy Network; Arizonans Against A Bad Idea
Nicole Stickler, Executive Director, Arizona Association of Counties, Inc.
Charlene Ledet, Special Assistant, State Relations, University of Arizona
Carol Kamin, Executive Director, Children’s Action Alliance
Sarah Rimbey, Teacher, Arizona Interfaith Network
Nichole Villegas, Arizona Interfaith Network
Dalila Sanders, Arizona Interfaith Network
Robert Mings, East Valley Interfaith
Kathryn Kahle, Planning & Projects Coordinator, Arizona Coalition to End Homelessness
Tom Remes, Intergovernmental Liaison, City of Phoenix
Emily Nock, Arizona Coalition to End Homelessness
Emilie Isaacs, Vice President Public Affairs, Tempe Chamber of Commerce
Kevin Adam, Legislative Coordinator, League of Cities and Towns
Jerry Boehm, Director of Operations, Arizona Council of Human Service Providers
Laurie Smith, representing self
Kathy Hobbs, Director of Government Relations, Sojourner Center
Thomas Donovan, Valley Interfaith Project
Angel Rodriquez, Co-Director, AFSCME Council 97
Ana Arvayo-Batres, Arizona Interfaith Network
Beth Lewallen, County Supervisors Association
Eric Emmert, East Valley Chambers of Commerce Alliance
Brett Jones, Director of Government Affairs, Arizona Contractors Association
Lydia Guzman, Outreach Director, Clean Elections Institute; Coalition for Latino Political Action
Timothy Dunst, representing self
Larry Lucero, Manager Governmental Affairs, Tucson Electric Power Company
Sigrid Whitman, Community Activist, AARP
Susan Secrest, Community Advocate, representing self
Bonnie Ford, Community Advocate, representing self
Georgina Takemoto, Superintendent, Phoenix Elementary School District, representing self
Mary Murphy, Community Activist, AASRA
Mitzi Epstein, Parent, Tempe Union High School District; Kyrene District; representing self
Linda Brown, representing self
Lynda Reithmann, Campaign Consultant, Arizona Against A Bad Idea
Ilene Dode, CEO, representing self
Scott Smith, Director, State & Local Relations, Arizona State University
Karen Novachek, Director, Lutheran Advocacy Ministry in Arizona
Michael Gordy, Teacher, representing self
Pamela Hennessy, English Teacher, representing self
Ed Hermes, Student Regent, Arizona Board of Regents; representing self
Shannon Harper, Government Affairs Director, American Heart Association
Lupe Solis, Associate Director Advocacy, AARP
Dan Sagramoso, Arizona Interfaith Network
Rhonda Martin, representing self
Ritch Steven, Arizona State President, AARP
John M. Skarhus, representing self
Kristy Speer, Teacher, representing self
Susana Marquez, representing self
Connie Phillips, Executive Director, Sojourner Center
Dr. Elizabeth Ortiz De Valdez, representing self
Bruce Liggett, Executive Director, Arizona Child Care Association
Vice-Chairman Mason assumed the Chair.
PRESENTATION
Arizona Department of Corrections (ADC)
Lorenzo Martinez, Senior Fiscal Analyst, Joint Legislative Budget Committee, stated that the JLBC baseline adds $35 million to the General Fund to the ADC budget for bed and population issues in FY 2007 and 3,000 private beds in FY 2008 (Attachment 16, Page 2).
Kevin Bates, Fiscal Analyst, Joint Legislative Budget Committee, reviewed the JLBC and Executive recommendations for ADC bed and security issues and the Executive recommendation for officer pay (Attachment 16, Pages 3 to 7).
Kimberly Cordes-Sween, Fiscal Analyst, Joint Legislative Budget Committee, reviewed the Executive recommendation for health care costs and the status of the Maricopa Health Care Contract (Attachment 16, Pages 8 and 9).
Mr. Bates indicated to Mr. Weiers
that ADC anticipates the pay plan would bring the vacancy rate down to 10
percent. Mr. Martinez elaborated that in the calculations provided, ADC
assumed that as a placeholder 10 percent of positions would not be filled, and
as a result, any resulting vacancy savings would be applied to paying overtime.
The total base amount is
$278 million, so 10 percent would be $27 million available for overtime now. If
the vacancy rate is more than 10 percent or less than 10 percent, it would vary
the amount. ADC was not asked if overtime is paid at time-and-a-half, whether the
dollar for dollar savings would cover time-and-a-half. ADC was asked whether
there would be any future cost relative to the pay plan, and the response was
that if the pay plan is funded, ADC would make it work.
Mr. Weiers asked the typical overtime for an employee. Mr. Martinez said he would have to defer to ADC. Under ADC’s current budget for FY 2006, there is a special line item broken out for overtime with approximately $18 million. ADC stated that because of the inability to fill all of the positions, the overtime requirement will be about $37 million, so ADC is requesting permission to transfer funds within the budget to supplement the $18 million that has been specified for overtime in order to accommodate the $37 million estimated cost.
Mr. Martinez stated that one of the enhanced legislative oversight issues included in the JLBC recommendation is to change the budget structure for ADC. He reviewed the proposed budget structure, which adds more budget lines, including lines for each prison facility. The proposed budget structure would facilitate identifying potential cost areas where there could be shortfalls, facilitate complex-by-complex comparisons, and enhance flexibility for clarifying the legislative intent with regard to funding. He reviewed the JLBC – Executive Comparison of General Fund Increases for Prison Beds and Other Issues, noting that the JLBC baseline adds $35 million to ADC’s budget compared to the Executive proposal of $122 million, the majority of which is related to officer pay increase, health care costs, and the addition of 900 provisional beds. He noted that ADC Total Funds in FY 2002-FY 2007 is included in the handout (Attachment 16, Pages 10 to 14).
Mrs. Groe stated that in last
year’s budget, a request was made that ADC provide information on how much different
programs cost and wondered if the information was passed on to JLBC.
Mr. Martinez responded that last year’s budget required ADC to submit
information in a format not dissimilar to the budget proposal and ADC provided
some information, which raised issues relative to how funding is allocated
among the various lines; however, it was not very clear. That is why he hopes
from now going forward it will be possible to identify those areas and obtain
the information that is needed, so as the years go by, there will be some
historical record.
Doris Schriro, Director, Arizona Department of Corrections, stated that there are presently 33,545 confined prisoners and an additional 6,553 felons completing sentences under community supervision. The ADC workforce is responsible for managing the state’s felon population, and three-quarters of the excellent corrections professionals, men and women, who serve in the Correctional Officer (CO) Series are dedicated to their care, custody, and control. Bill Greeney from the Governor’s Office of Strategic Planning and Budgeting provided a summary of ADC concerns (Attachment 17). She will talk about the most pressing and urgent of ADC needs, which is the competitive pay plan for Correctional Officers Series staff, which would begin this spring, with the Legislature’s approval.
Referring to a handout, she
related that ADC is losing officers that are necessary to manage the prisoner
population (Attachment 18). In the last year, the vacancy rate increased an
additional 8.7 percent and picked up 4.6 percent just since July when the
$1,410 increase kicked in, which was the best that could be done at the time,
but demonstrates how that relatively small amount did nothing to stem the
tide. Even applying the state employee plan to the current salaries (applying
the 2.5 percent first) the increase in all of the CO Series staff is still
considerably below competitors in Arizona communities, and the disparities are
great and even greater in some other positions. She noted that CO vacancies
continue to increase as salaries fall further below market. Since the $1,410
increase was received months ago, in November 2005,
Pima County announced a 16 percent increase effective April 2006, and Maricopa
County announced the intention to increase wages as well. As vacancies
increase, not only are the positions not being filled, but there is also
additional demand by competitors. BOP Prisons in Tucson is specifically
targeting to hire 200 of ADC staff for expansion, and Pinal County
is expressly targeting ADC staff.
Ms. Schriro said the operational impact of losing so many people and being unable to fill vacancies as quickly as in the past is that the average tenure of security series staff is continuing to drop, which is worrisome when prisoners have more experience jailing than the employees. In the last year, it took two weeks longer to find a suitable replacement for an employee. Coupling the 13 weeks when a position remains vacant with the state-required 10 weeks of POST certified training, every vacancy is equal to 23 weeks, which is nearly a half year, and where there are critical positions and functions to be filled, overtime and time-and-a-half is relied on to cover those spots. The more the shrinking workforce is asked to work overtime hours, which in the last pay period was an average of 17 hours, the employees are more inclined than ever to resign, even with cash overtime, because of family commitments and other obligations at home and in the community. Also, people can only work so many hours before they just cannot do it anymore.
Ms. Schriro said reliance on overtime utilization has continued to grow; in fact, during FY 2005, it increased 148 percent. There is an impact on taxpayers as well. In 2005, nearly $19 million was spent in overtime, coupled with $10 million, which is what was required to recruit and put newly hired staff through the training academy. This year the forecast is much direr because of the terrific spike in vacancies now at 21.5 percent, so it is anticipated that $37 million will be spent in overtime and about $8.5 million on recruitment and retention.
She said ADC has exercised all of
its authority to take steps to mitigate the impact of lack of a competitive pay
plan, such as voluntary overtime, relocating vacancies to facilities historically
underfunded, civilianizing some Arizona Correctional Industries functions, cash
overtime,
12-hour shifts, civilianizing some CO functions, and expanding the van pool.
There is nothing else that can be done, so she is asking the Legislature for
serious consideration of a special pay package to bring Corrections Series
staff to market rate to begin on May 1, 2006, which would be in addition to the
state employee increase effective March 11, 2006.
Ms. Schriro related to Mrs. Groe that the only money spent in 2006 for overtime was identified in the line item for overtime, which is why ADC wrote to JLBC in December 2005 requesting permission to move money from vacancy savings into that line item to continue the commitment to staff to pay cash overtime as long as possible. JLBC is not meeting until the end of February, and she will be unable to pay cash overtime earlier than that, so she turned to the Governor’s Office who talked to the Arizona Department of Administration (ADOA), which will provide other monies so cash overtime does not have to be discontinued until JLBC can make its determination. The more monies are put in more lines for more functions the more will be known about ADC, but much is likely to stop in the meantime.
Mrs. Groe asked if ADC’s suggested pay plan would eliminate the need for future overtime and compensatory time in the coming years. Ms. Schriro replied that she believes ADC’s reliance on overtime would continue to decrease assuming that the salary plan request is approved and begins at the time requested. ADC has over 1,300 vacancies today, and she anticipates working diligently to fill those vacancies within a year, but through 2007 there will still be reliance on comp time or overtime, although less than in prior years.
Mr. Lujan indicated that the Governor’s budget includes $5.2 million for repair of doors and locks for the prisons, but JLBC does not, which is a concern. Ms. Schriro stated that some items that directly benefit ADC are included in ADOA’s budget, and money for locks is included in that sum. Several years ago, ADC received money to repair and replace locks throughout the agency, but when 9/11 hit, the money was swept back before most of it was spent. A certain amount of preventative maintenance and ongoing repairs need to be made. The Governor included monies envisioning that comparable sums would be requested this year and the next four years over which period of time all locks could be replaced or repaired.
Tixoc Munoz, Correctional Officer, Lewis Complex, asked the Committee to seriously consider the proposed pay plan, which is very important to COs. Like the legislators raise their hand and swear to protect the public, COs do the same thing. Every time a CO resigns, the other officers have to cover 88 hours for that officer, which means it is impossible to spend time at home. The most important thing about the pay plan is it would retain COs with experience who have the ability to “read” inmates intending to damage buildings, people, or visitors and can prevent someone from getting hurt. An experienced officer will decrease lawsuits against the state because of the ability to communicate and make an inmate understand that violence is not the way to go.
He stated that people say they are leaving for a better job, but there is not a better job than a CO. It is a very noble job. Even with the best law enforcement officers on the street, without COs to keep individuals who break the law behind bars, money would be wasted because people would be escaping like in 2004 when an officer was taken hostage, which was someone without experience. Supporting this pay package will send a message to 4,880 COs that the Legislature cares about what the officers do and the working conditions.
Ms. Aguirre said the pride he takes in his job is evident and thanked him.
Vice-Chairman Mason said she also appreciates his passion. He stands before the Committee as a very good example of his colleagues. She thanked him for his service and work.
Without objection, the meeting adjourned at 3:53 p.m.
________________________________
Linda Taylor, Committee Secretary
February 20, 2006
(Original minutes, attachments, and tape are on file in the Office of the Chief Clerk.)
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COMMITTEE ON APPROPRIATIONS (P)
15
February 8, 2006
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