PHOENIX - A judge gave the go-ahead Wednesday for the state to deny free health care over the next year to about 135,000 poor people.

Maricopa County Superior Court Judge Mark Brain acknowledged a 2000 voter mandate that the state provide care for everyone below the federal poverty level, and that the Voter Protection Act in the Arizona Constitution prohibits lawmakers from altering or repealing anything approved by voters without taking the issue back to the ballot.

But Brain said that does not preclude lawmakers from refusing to provide enough money to the Arizona Health Care Cost Containment System, the state's Medicaid program, to cover everyone who is eligible.

"The Voter Protection Act prohibits the Legislature from doing numerous things," Brain said.

"It does not require the Legislature to do anything," he continued. "Specifically, it does not require the Legislature to fund programs."

And without funds, Brain said Gov. Jan Brewer was free to direct AHCCCS to scale back eligibility.

Attorney Tim Hogan, of the Center for Law in the Public Interest, said the judge missed the point.

"By failing to appropriate the money, they effectively repealed the provision of Proposition 204 that requires that people get health care," he said, in violation of the Voter Protection Act.

Hogan said he will appeal the decision.

"People are being denied (coverage) every day," he said.

Brewer agreed, "The human impacts are real." But in a prepared statement she said the state's financial condition made it necessary to scale back the program and turn some needy people away.

That 2000 ballot measure says anyone below the federal poverty level is entitled to free care. That figure, adjusted annually, currently is about $18,500 a year for a family of three.

Medicaid pays about two-thirds of the cost. The initiative said the state's share would be picked up by tobacco taxes, the funds from a settlement with cigarette companies and other "available sources."

In adopting a budget for the current year, lawmakers left the taxes and settlement funds in place. But they said the budget situation left no "available" funds and directed Brewer to scale back AHCCCS to compensate.

She responded with a plan to exclude childless adults and some parents from the program, people Medicaid does not require states to cover.

About 230,000 in this category who were already enrolled on July 8, when the change took effect, were allowed to remain in the program as long as they remained eligible. But beginning that day, everyone else in this category was turned away and those who lost eligibility could not re-enroll.

Monica Coury, an assistant director of AHCCCS, said Wednesday that her agency has no way to tell how many people who sought coverage were turned away as no longer eligible. But AHCCCS said earlier this year the change would affect about 17,000 people in the first month, and about 135,000 over the course of a year.

Brain said the state's finances have to be taken into account.

He said the new AHCCCS eligibility rule likely would violate the Voter Protection Act if it was implemented solely on the governor's orders.

"It does not, of course, exist in a vacuum," the judge wrote. "Instead, it merely affects the reality imposed by the lack of funding existing in light of the current budget provided to AHCCCS."

Rep. Steve Farley, D-Tucson, the assistant House minority leader, said the decision, unless overturned, will have negative ripple effects.

"The more than 100,000 people cut off of health care by Gov. Brewer will flood our emergency rooms looking for care that could be handled by physicians," he said in a prepared statement.

Democratic Rep. Matt Heinz, a Tucson physician, said, "I respectfully disagree with his ruling and I believe that an appeal, if filed, will be successful. The language of Proposition 204, protected by a constitutional amendment, prohibits capping or freezing eligible populations, which is what the Legislature effectively did by slashing the AHCCCS budget by $500 million this year."

Reporter Stephanie Innes contributed to this story.