New plan gives all employees $1,450 increase; governor expected to approve raises this week

PHOENIX - State legislative leaders reached a compromise yesterday morning that could give all employees a $1,450 raise and draw the battle of employee pay raises and the state budget to an end.

Gov. Jane Dee Hull is expected to sign the budget later this week, once delivered tomorrow to her office. House of Representatives Speaker Jim Weiers halted the budget approved Friday from reaching Hull.

That budget would have staggered raises for University of Arizona employees based on varying income levels.

The governor is expected to veto the first budget at the same time she signs the revised one, said Democratic Sen. Ruth Solomon, senate appropriations committee chairwoman. While saying Hull favors the compromise, spokeswoman Francie Noyes did not affirm the governor will veto the bill.

"This is much closer to what the governor proposed herself a couple of months ago," Noyes said. "It still gives the employees a raise without such a cost to the state."

The raises, a $70 million package, are reduced from the original plan intended to increase salaries $1,500 or 5 percent, "whichever was greaterù on April 1. Under the compromise, salary increases will take effect June 8, Solomon said.

Some Legislators were displeased with the budget as it stood Friday because it left the House and Senate divided on the issue. That may have given Hull more power to line-item veto some of the raises, Republican Rep. Jeff Flake said.

"The legislature is making the law so the governor won't be able to," Flake said. "It's a more harmonious relationship (within the legislature), and that's where I hope we're at."

The budget was approved Friday after a break-down in communication between House and Senate leaders; Hull had suggested she would use a line-item veto to eliminate all raises except the $1,500 raises for employees earning less than $30,000.

Lawmakers were eager to compromise yesterday morning, Solomon said, to prevent a legal battle between state employees and the governor. A debate had developed between Hull and members of the Senate as to whether the original raises would have been reinstated by a veto.

The latest budget compromise is an attempt to clear the air before tougher negotiations on the 2003 budget, where Legislators are estimating the state will be $1 billion short in revenues to meet state expenses.

The raises are symbolic for higher-paid employees and a necessity for lower-paid employees struggling to make ends meet and pay higher healthcare premiums this year, Solomon said.

"Not one other state is giving employee raises this year," Solomon said.

"They can't afford them; we can't afford them. The only reason we're doing them is to keep public employees here in Arizona," she added.

UA lobbyist Greg Fahey said the university is planning to take cuts amounting to as much as 5 percent next year with the belief that all state allocations eliminated the past seven months will be recouped in 2004.

Some in the Legislature now contend, however, that the deficit may not be shrinking. "It's bad, and it's going to be worse next year, and it's not going to be any better in 2004," Solomon said.