PHOENIX (AP) -- Advisers to a state review panel are recommending that it allow state employees and retirees to obtain taxpayer-subsidized health insurance coverage for domestic partners and partners' dependents.

While acknowledging that the issue is controversial, analyses by an attorney and an economist for the Governor's Regulatory Review Council recommend approval of rule changes proposed by the Department of Administration with support from Gov. Janet Napolitano.

The proposal appears both legal and cost-effective, the analyses said.

While the state would benefit from having fewer people going without health insurance coverage, a more direct result for the state government would be a reduction in the high turnover rate of 17.3 percent if the improved benefits package encourages more trained workers to stay on the job, commission economist Allen Malanowski wrote in his analysis.

"There are decreased costs to the state through increasing employee retention and satisfaction with benefits," Malanowski wrote.

Along with saying the state shouldn't take on new costs at a time when it has a budget crisis, some opponents have argued that Napolitano's administration is trampling on the Legislature's policymaking role.

However, council attorney Bill Hylen said the rule proposals falls within "the rather broad rulemaking authority" that state law gives the department for the employee benefits plan.

State law, Hylen wrote, "generally leaves it to the department to determine the design of the plan, including the terms and conditions of coverage."

The state Senate on March 18 narrowly rejected a bill to block the move by changing state law to define "dependent" as a spouse or unmarried child of an employee or retiree. The bill was supported by social conservatives and opposed by gay rights advocates.

The review council, which has the final say over many agencies' proposed rules, considers whether rules are necessary, legal and have benefits that outweigh costs. The seven-member appointed council is scheduled to consider the proposed rule changes Tuesday.

The department's Nov. 30 proposal would affect benefits systems serving some 65,000 state employees and 9,000 retirees. According to state estimates, the number of partners likely to be covered if the changes take effect ranges from 317 to 853.

The department said at least 15 other states already provide domestic partner benefits.

The department said state officials received 1,429 written comments from 913 individuals and groups. Among the 913 individuals and groups, 787 supported the proposals and 112 opposed them, with 14 merely seeking clarification.

Among the supporters' communications, almost 600 were form letters that contained the same text.

Supporters included university officials, the American Civil Liberties Union's Arizona branch, the Anti-Defamation League, a Tempe firefighters group and state Sen. Amanda Aguirre, D-Yuma. Opponents included the Center for Arizona Policy, the Alliance Defend Fund and five Republican state representatives.

One of the GOP lawmakers, Rep. Nancy Bartos of Scottsdale, noted that the department contends it can find savings to make the proposal "cost-neutral."

"But the fact that their current budget may accommodate these added costs implies excess in the department that could be trimmed in lieu of expanding programs," she wrote.

Arizona voters' rejection of a 2006 constitutional ban against same-sex marriages is a testament to the public's willingness to extend benefits to domestic partners, said ACLU attorney Dan Pachoda.

"By all accounts and surveys, the reason that this proposal became the first in the nation to be defeated was attributable to the clear intent to prohibit domestic benefits to unmarried couples, heterosexual as well as gay and lesbian," Pachoda wrote.

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On the Net:

Governor's Regulatory Review Council: http://www.grrc.state.az.us/

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