State lawmakers were swinging into action this week for a special
session designed to fix a small part of Arizona’s budget crisis.
But even if legislators manage to accomplish everything on their
agenda, they’ll barely put a dent in the $2 billion shortfall that
they’re facing this fiscal year.
And lawmakers are less than two months from the start of the 2010
legislative session, when they’ll have to write a budget for the next
fiscal year, which already has an estimated shortfall of $3
billion.
This week, lawmakers hope to cut $144 million from education
spending and $148 million from the Department of Economic Security.
They also hope to make some technical fixes to various agencies that
were vetoed earlier this year as part of a larger package rejected by
Gov. Jan Brewer; that will trim about $160 million in state
spending.
The special session—the goals of which were on shaky ground
over the weekend because Senate President Bob Burns was struggling to
round up enough votes to approve the package—is expected to wrap
up on Thursday.
Lawmakers also intend to pass legislation to strip away control of
downtown Tucson’s Rio Nuevo project from the Tucson City Council,
instead handing oversight over to a new committee appointed by Brewer
and legislative leaders.
In addition, legislators are expected approve a plan to pay an $18
million debt to Science Foundation Arizona through risk-management
funds. The unusual financial maneuver is possible because Science
Foundation Arizona won a lawsuit against the state after the
foundation’s funding was cut earlier this year by lawmakers, so the
state can pay what it owes the nonprofit organization out of a fund
designed to pay legal judgments.
The special session comes just days after the Pew Center on the
States included Arizona on a list of 10 states headed for a fiscal
meltdown. Other states in crisis include California, Nevada, Florida,
Illinois and Michigan.
The Pew report notes that Arizona lawmakers did not react quickly
enough to address the state’s growing budget problems.
“Early on, as the economic news grew bleaker, Arizona’s lawmakers
reacted slowly, looking to solutions they had used to deal with other,
less-serious recessions. In fiscal year 2008, they drained the state’s
rainy-day fund, a sort of savings account set up to deal with any
sudden revenue drop-offs, and delayed last-quarter payments to school
districts to ship those bills off the balance sheets of one fiscal year
and push them onto the next. … When drafting the fiscal year 2010
budget, Arizona had $7 billion in revenue to pay for $11 billion in
spending.”
The Pew report blames the usual suspects for the state’s ongoing
economic meltdown, including the bursting of the housing bubble, a
steady stream of tax cuts dating back to the 1990s, and voter mandates
to maintain spending on education and health-care programs.
The report notes that the number of Arizonans on Arizona Health
Care Cost Containment System (AHCCCS) rolls has more than doubled,
from 552,000 in 2000 to 1.3 million in August 2009, after voters
approved a proposition to ease eligibility standards. And while polls
show that some voters back Brewer’s proposed temporary one-cent
sales-tax increase, David Berman, of Arizona State University’s
Morrison Institute for Public Policy, warns that the support is soft,
and revenues will have to be dedicated to education spending if it is
to pass at the ballot box. (That assumes that Brewer can somehow find
legislative support to put it on the ballot in the first place.)
The state has yet to reach the bottom of its financial freefall. The
most recent monthly update from the Joint Legislative Budget Committee
shows that in September 2009, revenues dropped by 16.1 percent compared
to September 2008. It was the 14th consecutive month of double-digit
declines compared to one year earlier.
In the first three months of the fiscal year, tax collections were
$233 million below the forecast.
“There are no simple answers,” warns Alan Maguire, a former
legislative staffer who is now president of the Maguire Company, a
lobbying and financial-analysis firm.
Maguire suggests that one of the problems facing lawmakers is the
absence of good historical data and institutional memory among
lawmakers, because term limits have resulted in so much turnover.
“We’re not building the institutional knowledge we need to make
decisions,” says Maguire, who recently prepared a report on Arizona’s
fiscal history for the Governing Arizona project, an effort to help
lawmakers, the media and the public better understand the historical
trends that have left Arizona in its current precarious financial
situation.
“The budget is overwhelmingly complex,” says Maguire. “The lack of
debate and discussion is leading to a lack of transparency. … I can’t
figure out what they’re talking about, and I’ve been doing this for 30
years. What’s some poor freshman (legislator) who just showed up last
Thursday going to be able to figure out?”
This article appears in Nov 19-25, 2009.
Excellent article – thanks for keeping the spotlight on the legislature
Arizona can immediately save millions of dollars and lives by simply ending all public assistance (welfare) payments to cigarette smokers. Taxpayers are simultaneously subsidizing the living expenses and supporting the addiction of people who are literally burning money in the form of tobacco. Anyone who has money to spend on smoking neither needs nor deserves tax dollars for free food, subsidized housing, government daycare, and so on. An average pack a day smoker spends over $1800 a year on their cigarettes alone and an idle, unemployed nicotine addict obviously spends even more. The governor of Arizona already has sent a representative to the U.S. Dept. of Agriculture and Health and Human Services to prohibit purchase of soda, candy bars, etc with food stamps. The logic is impeccable and compelling: food stamps are for nutrition not junk food, while cigarette smokers have money for their nicotine addiction so they don’t need food stamps.