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As school starts, the effects of budget cuts are painful—and the situation could get much worse

Most people's eyes gloss over when the conversation turns to governmental budgets. But this week and next, as tens of thousands of students return to classrooms across the city, government budgets will be forefront in the minds of many.

"It's hard to even fathom how we'll get through this year," admits Judy Burns, chair of the Tucson Unified School District's (TUSD) governing board. "It's scary to me. ... The next two years will be very difficult.

"There's been a 14 percent cut at every school. That's a lot. We're bare-bones out there. Teachers are upset, and they're being asked to do more, but not for any more money. It's a very bad situation."

The district's chief financial officer, Bonnie Betz, sums up her approach to the evolving TUSD budget in just a few words: "We're planning for the worst, and hoping for the best," she says.

Part of the district's dilemma has to do with the continuing gyrations in the state of Arizona's budgetary process. With that situation still unresolved—as of our press deadline, this fiscal year's budget was still not in place—financial agencies that receive state funds have had to make fluid plans.

"I've been doing four budgets all along," Betz says about the last several months. "How the heck are you supposed to plan with that (uncertainty)?"

The best-case scenario for TUSD, Betz believes, is a general budget for the current fiscal year of $365 million.

More than 60 percent of those funds are supplied by the cash-strapped state. Betz also points out that continuing declines in TUSD enrollment also negatively impact the district financially.

The $365 million figure compares favorably to the district's actual adopted budget for the current fiscal year of $353 million. It looks rosy next to the $347 million number the district is actually using currently for budgetary purposes.

However, Betz admits that by Oct. 1, there's a good chance that latter figure could shrink even further. Betz says it might go as low as $337 million, which is her worst-case outlook.

Betz says the district will have to spend the entire $5 million it has in savings to help cover the shortfall if that reduction occurs.

For her part, Burns is worried about what could happen if the district is forced to burn through its savings.

"We'd have nothing for something that could come up," she says, pointing to the sudden rise in gas prices last year as an example of an unforeseen budgetary crisis.

"I hope it doesn't turn out as bad as it looks like it might," Burns says about TUSD's budget situation. "We'd have to have layoffs in the middle of the year."

Reflecting on the deteriorating state of fiscal affairs for education in Arizona, Burns observes: "We're competing against states that spend twice as much as we do."

Jim Florian, director of the UA's Budget Office, has a somewhat similar philosophy about what should happen once things start to improve with Arizona's economy.

"The state," he says, "will hopefully see the value of reinvesting back into both K-12 and higher education. That brings jobs of a higher level."

Until that turnaround occurs, Florian says, the university is taking a realistic approach to budget planning. The UA started the last fiscal year with a $418 million general-fund budget; for the current fiscal year, that amount was reduced several months ago to $363 million.

That number, Florian says, is the most the university can reasonably expect this fiscal year—and it could go as low as $346 million, which is the base amount required to receive federal stimulus funds.

"We're being conservative and flexible," Florian says of the university's budget. "A budget is a plan subject to change, so we're planning at the $363 million level, with contingencies."

The drastic cuts to its budget earlier this year forced the university to leave 600 positions unfilled. If the budget is reduced further, Florian says the impact will be traumatic.

"There's a point beyond which you can't take away from everyone," he explains about across-the-board budget-cutting. "So we plan in terms of the scope of what (further budget reductions) mean."

As for possibly having to cut from $363 million to $346 million, Florian says: "That's an (entire) college."

On top of that budget-reduction scenario, Florian adds: "Planning for fiscal year 2012 is difficult, because that's a (budgetary) cliff. There won't be any federal stimulus dollars any longer, and limited tuition increases."

In the meantime, Gov. Jan Brewer and her fellow Republicans in the Legislature continue to wage political war over the state's budget. In a press release issued last week, the governor again blasted members of the state Senate for having "so little trust in the voters that they would once again delay the passage of a sound state budget."

Meanwhile, Brewer's spokesman, Paul Senseman, continues to strongly push the governor's budget proposal that includes asking voters to approve a temporary sales-tax increase.

Until the budget situation is resolved, Senseman says, the governor's office has a straightforward message for agencies which receive state funds.

"Revenues are declining," he says, "so they should restrict their spending to the most critical areas."

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