by Casey Newton - Oct. 16, 2009 12:00 PM The Arizona Republic

State agencies heads say they would have to cut programs, lay off employees and reduce services in budget scenarios released Friday.

The scenarios were submitted last week to Gov. Jan Brewer, who asked state agencies to submit proposals on how they would reduce their budgets by an additional 15 percent. The state faces a $1.5 billion deficit in the current fiscal year and expects a shortfall next year that could be twice as large.

Brewer has said the reports are not plans or proposals. She directed agencies to prepare the reports to show how services could be affected if lawmakers insist on a cuts-only approach to closing the projected shortfall for the current fiscal year.

The proposals are in the outline stage, and so far they are not actively being considered by the governor or the Legislature. But the bleak picture painted by many agencies in their proposals could serve as political leverage for Brewer, who is seeking to refer to the ballot a measure to temporarily increase sales taxes by one cent.

Brewer's budget director, Eileen Klein, told agency directors that it wasn't realistic to expect that the necessary savings could be found in “across-the-budget reductions” because of cuts previously made. That meant agencies would have to prioritize services “based on what is most essential and what the voters or courts have mandated,” Klein told directors in a Sept. 18 letter.

Some of the scenarios include:

Department of Corrections

Thousands of violent offenders will see early release if state agencies are required to reduce their budgets by an additional 15 percent, according to the Arizona Department of Corrections.

The reduction would force the department to reduce its budget by $153 million, an outcome that would lead to:

• Early release of 13,000 prisoners.

• Reducing the mandatory time served for the most serious felonies to 50 percent.

• Closing Arizona State Prison Complex-Douglas, as well as prisons in Globe, Fort Grant and St. Johns.

• Layoffs of 1,500 employees.

Charles Ryan, director of the department, expressed deep reservations about implementing the cuts.

“Rewriting the criminal code and releasing thousands of prisoners is neither realistic nor in the best interest of public safety,” Ryan wrote in his letter. “Releasing thousands of prisoners because of the budget deficit will place the public at risk and is akin to turning our back on the law-abiding citizens of Arizona.”

Arizona Health Care Cost Containment System

More than 46,000 children would lose health insurance coverage if AHCCCS were forced to reduce its budget by 15 percent. The department would achieve most of those cuts — about $47 million — by eliminating its KidsCare program, which currently covers 46,957 children of low-income families in the state.

According to the department's letter the governor, Arizona had the fifth-highest rate of uninsured children in the nation for 2008.

If the KidsCare program were eliminated, AHCCCS officials estimated that Arizona would move to the third-highest rate in the nation and would have more than 18 percent of children under age 18 uninsured.

The letter also cited studies by the Kaiser Family Foundation indicating that uninsured children lead to lower school attendance, less success in school and reduced cognitive development.

Department of Public Safety

A 15 percent reduction would lead to $40.8 million in cuts and the loss of as many as 570 law enforcement jobs — the equivalent of the entire Tempe Police Department.

At a minimum, a 15 percent reduction would leave the department's staffing at 1999 levels. Arizona's population has grown 39 percent since then.

“The enclosed reduction options would be devastating to the department, to public safety, and to our employees,” DPS Director Roger Vanderpool wrote in a letter to the governor.

The Fraternal Order of Police chapter that represents DPS officers said public safety would be harmed significantly were the cuts implemented. Response times could suffer, officials said, particularly in rural Arizona.

“Can you imagine being a citizen calling 911 for help, and being told the closest officer we can get to you is an hour away?” said John Ortolano, president FOP's Grand Canyon State Lodge. “I can't imagine being someone on the other end of the phone. Their jaw would hit the floor.”

Ortolano said the reductions, when combined with existing vacancies, would leave DPS without roughly one-third of the 775 officers who patrol state highways.

Department of Environmental Quality

Harmful pollutants in the state's air and water systems could go unmonitored, according to the Arizona Department of Environmental Quality. The department would be forced to cut its budget by $13 million, and director Benjamin Grumbles warned of the following possible consequences of staff reductions:

• Fewer or delayed air-quality data analysis, risking “untimely discovery of unhealthful levels of air pollution."

•With the loss of an engineering specialist, the increased likelihood of public exposure to asbestos building materials.

•With reduced inspections staff, increased noncompliance in landfills and bio-hazardous medical waste treatment facilities.

•Reduced monitoring of pesticides entering the water systems in Arizona.

Grumbles did not provide specifics on the number of layoffs.

Universities

The state universities - Arizona State University, University of Arizona and Northern Arizona University - have already lost $231 million, or 21 percent, of their state funding this year. University officials estimate a 15 percent cut would equal an additional $135 million.

The Arizona Board of Regents president laid out several possible blows:

• Students could see their tuition soar.
• Hundreds of university employees could lose their jobs.
• Students with merit-based scholarships could find themselves empty-handed.

A midyear tuition hike is not off the table if the budget situation gets bad enough, Regents President Ernest Calderón said in his letter sent Friday.

“We'd have to look at everything,” he said.

Calderón said in his letter that this was equivalent to $1,300 in additional annual tuition charges per student or the elimination of 2,200 jobs. A 15 percent cut also nearly equates to $140 million in merit-based scholarships given to almost 28,000 students every year.

Calderón said he is "pretty sure" the ASU West and ASU Polytechnic campuses would stay open, but they would not be immune from systemwide cuts.

K-12

At the K-12 level, Superintendent of Public Instruction Tom Horne said that taking 15 percent out of the Department of Education's budget, including general fund and non-general funds available, would mean another $25.1 million in cuts.

• Schools would have to reduce the number of campus police officers because the cuts would erase $5.2 million in state funds for the officers.

• Schools also would reduce some of its programs. The cuts could mean $4.8 million for dropout and drug-prevention programs, and $1.3 million in preschool funding, including money to help parents become better readers so they can help their children learn.

• Other cuts would include about $6 million each for special-education student vouchers and English-language immersion and a cut to the department that licenses teachers and investigates complaints against them.

The Department of Education already has cut $17 million from its budget during the past two school years.

Horne said the agency has not filled vacated positions and is moving some employees from state-paid jobs into positions funded by federal grants. The budget year that begins in July 2011 could be the worst so far, he said.

The Associated Press contributed to this report. Republic reporters Anne Ryman and Pat Kossan also contributed.