3/15/2010 1:20:00 PM Governor's Chief of Staff: AZ budget woes are déjà vu Eileen Klein speaks to Cattle Growers at annual meeting
David Shafer of the Yavapai Cattle Growers Association gives Arizona Governor's Chief of Staff, Eileen Klein, a gift to take back to Gov. Jan Brewer and one for herself from the organization after her speech Saturday night.
Heidi Dahms Foster/Courtesy photo
Governor Jan Brewer's Chief of Staff, Eileen Klein, speaks to the Yavapai Cattle Growers Association at its annual banquet Saturday night at the Prescott Resort. Klein spoke in place of Brewer, who had the flu.
Heidi Dahms Foster/Courtesy photo
Governor Jan Brewer was unable to attend the Yavapai Cattle Grower's annual meeting and dinner Saturday night because a bout of flu sidelined her. However, her chief of staff, Eileen Klein, brought the governor's message about the state's budget and the need for a temporary tax hike to the more than 200 people in attendance.
Klein's speech focused on the budget that state lawmakers approved last week, cutting $1.1 billion in spending, but removing some low-income health care coverage for children and adults and further squeezing money that might keep state parks running.
Klein told the group that Brewer is a "consistent truth teller" who is navigating "some of the toughest times our state has ever faced."
In talking about the proposed sales tax hike that Brewer has espoused from nearly the beginning of the budget crisis, Klein related how former President Ronald Reagan raised taxes to bring California out of a budget crisis in the 1960s.
She said when Reagan took office as Governor of California in 1966, he discovered the state's budget was "house of cards, a Ponzi scheme really, and it was designed to let politicians take credit for spending now and force others to worry about how to pay those bills later.
"Vast amounts of debt and accounting gimmicks coupled with the huge expansion of permanent spending and government programs had left California and its new governor with a financial crisis and a state budget near collapse. Sound familiar?" she asked.
Klein said that when Brewer took office a little over a year ago, Arizona also was on the brink of fiscal collapse.
She said the former administration under Gov. Janet Napolitano allowed the government to grow as large as possible without regard to how the state would pay the bills.
"'Wrong' was allowing the state budget deficit to occur in the first place, and then allow it to reoccur successfully to the tune of $3 billion. So we set about to make things right," Klein said.
Making things right, she said, included "telling the truth, even when it exacts a political cost," reducing spending by $1 billion in the first weeks of Gov. Brewer's term, and a new budget this past week that reduces state spending by more than $2 billion.
"We have set the state budget on a path of restructuring, back to a size that it truly can afford," she said. Klein acknowledged that the path isn't pretty.
"We've streamlined agencies, shrinking the state work force by more than 10 percent. We've reduced health care and our Medicaid system by 25 percent. It eliminates coverage for 310,000 adults. We eliminated the KidsCare program that provides health care coverage for about 47,000 children. We've reduced services - a very difficult decision for the governor - to 17,000 seriously mentally ill adults and children, and we've eliminated cash assistance for about 10,000 families," she said.
The budget also puts caps on day care assistance and eliminates services for more than 10,000 low-income children, and reduces state employee pay by 5 percent. She said the Governor's Office is painfully aware that it cannot "cut its way to prosperity." She added that state revenues are still falling short, and said more decisions to cut are ahead.
However, she said, attracting jobs to Arizona to aid its economic recovery will require an educated workforce and adequate public safety. She added that state agencies that govern land, water and agriculture have been cut to the point that reducing them further would compromise the safety of the state's food supply and the ability to ensure a long-term supply of water.
"The hard truth is that the depth of this problem is so severe that we cannot solve it with cuts alone. The damage done would be far too great," Klein said in introducing Brewer's proposal to raise state sales taxes on a temporary basis.
Klein said Brewer has never raised taxes in her 28-year public service career, but is "doing the hard thing."
"We won the right for the voters to decide to raise the state sales tax by 1 percent over the next three years," she said of the measure that will go before voters on May 18.
Proposition 100 will keep spending for Arizona's K-12 education system at reasonable levels and support colleges and universities, support law enforcement, and help Arizona's poorest families, she added.
"Without the revenue we'll have to cut another $1 billion to keep the state budget under control," Klein said. "Without it, education funding, which is already at 2006 levels, will be set back by 10 years."
The tax will automatically repeal in three years, "but it will get us through until revenues recover. We didn't create the situation, but we intend to resolve it," she said.
Klein tempered her speech with the upbeat news of new solar energy jobs coming to Arizona, saying the state is poised to become one of the top solar clusters in the world.
Creating jobs is the No. 1 issue in the state and across the country, she said. The state is redesigning its commerce department to attract jobs and continuing a moratorium on regulations that choke businesses, among other efforts.
The audience gave Klein a standing ovation at the end of her remarks, and the cattlemen then auctioned off a number of western art pieces and other items to support scholarships for local youths.