Stateline Story

Summary of the Arizona State of the State Address

In her Jan. 11 state of the state address that Democrats said sounded more like a campaign speech, first-term Republican Gov. Jan Brewer blamed the state's dire fiscal woes on Washington and former governor Janet Napolitano (D), now head of the U.S. Department of Homeland Security.
"Wrong is the five high-rolling years before I took office when the system was designed and operated to grow government as large as possible. Wrong is a state budget deficit of nearly $5 billion across two fiscal years. Wrong, is a federal whose unfunded mandates and sweetheart deals steal Arizona's freedom and threaten to bankrupt our state," she told the Republican-majority Legislature.
Brewer vowed to cut spending by $1 billion, trim state jobs another 10 percent, raise new revenues and roll back Medicaid, the federal-state health care program for the poor. The governor, who is facing a crowded primary election in August,  promised to provide details of a plan that she said would include restrictions on future government spending in a report to be delivered Jan. 15. 
Brewer criticized the federal government for what she called "oppressive health-care mandates, job-killing environmental restrictions, and continual refusal to pay for costs associated with illegal immigration." On immigration, Brewer was referring to having to  temporarily imprison immigrants caught at the border, a burden she said was not the state's responsibility.
While Brewer offered no details on revenue-raising strategies, she previously has promoted a temporary sales-tax hike and a sale-and-leaseback proposal for state buildings that has garnered national attention. Under the plan, which would raise as much as $732 million in much-needed cash, investors would purchase shares in $5,000 increments and would earn 4 to 5 percent interest over a 20-year leaseback period, after which the state would take back ownership of the buildings.
To roll back Medicaid, voters would have to repeal a successful 2000 ballot initiative that expanded the program, nearly doubling the state's health-care costs, Brewer said.
Emphasizing the need to shrink state government, Brewer promised to create the Commission on Privatization and Efficiency to identify state services and agencies for elimination, consolidation, streamlining or outsourcing.