Wednesday, June 3, 2009

Supreme court to hear budget cut challenge

Supreme Court to hear budget cut challenge
By Howard Fischer
Capitol Media Services

The Arizona Supreme Court turned aside two requests Monday by state agencies to block the Legislature from cutting their funds but agreed to hear arguments on a third.

Without comment, the justices rejected efforts by organizations that provide care to the developmentally disabled to force the Department of Economic Security to restore funds for services to the developmentally disabled.

In a separate order Monday, the justices refused to consider claims by the Industrial Commission of Arizona that the Legislature illegally took some funds from the agency to balance the state budget.

The rulings are most immediate a victory for the state which, for the time being, doesn't have to spend any more money.

But the high court did agree to hear arguments at the end of this month on a claim by First Things First that it was illegal for lawmakers to take more than $7 million from the account of that program approved two years ago by voters.

All three lawsuits are a direct outgrowth of a move by lawmakers in January to deal with a $1.6 billion deficit.

Legislators sought to balance the budget in part by "sweeping'' money from special accounts held by various state agencies. All totaled, lawmakers took more than $500 million.

That included $7 million in interest accumulated by First Things First, a program approved by voters in 2006 to add an 80-cents-a-pack tax on cigarettes to fund programs for early childhood development. By law, the tax proceeds are off limits. But legislators insisted they could take the interest that was earned off the money.

The high court agreed Monday to consider arguments that the raid was illegal.

The justices, however, refused to consider a similar claim by the Industrial Commission that taking $4.7 million from its special accounts was illegal.

In a petition to the Supreme Court, attorneys for the commission said the funds constitutionally can be used only to benefit injured workers, their employers and the companies that provide workers' compensation insurance, "not the general public.'' They also said the sweep amounted to "an unconstitutional taking of private property ... without just compensation.''

But attorneys for the state said there was nothing special about the commission's funds, allowing lawmakers to tap the cash when needed.

In Monday's action, the Supreme Court simply refused to hear the arguments.

That, however, does not end the matter. The commission is still free to file a regular lawsuit in Maricopa County Superior Court and try to make its case there.

The third lawsuit stems from the order by lawmakers in January that DES reduce its spending by about $150 million. That agency, in turn, cut payments to individuals and others that provide services to the developmentally disabled by 10 percent.

DES also eliminated services for people who are moderately developmentally disabled who, with support, can work in the private sector. Also cut was funding for early intervention services for 2,000 children, from birth through age 3, who are at risk for becoming developmentally disabled.

A trial judge blocked the move in March, ruling DES had acted illegally, blocking the cuts.

But the Arizona Court of Appeals last month said the evidence showed the agency had done nothing illegal and allowed DES to proceed with the reductions. Monday's Supreme Court decision upholds that ruling.

From here.

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