Arizona budget crisis becomes national news

Arizona’s budget situation has become national news.  The following article is excerpted from The Los Angeles Times:

Arizona struggles with budget crisis

The Legislature faces a nearly $2-billion deficit, which rises to $3 billion next year. It’s one of 35 states with ongoing budget problems, and experts say its plight is second only to California’s.

Burns

Arizona Republican state Sen. John Huppenthal, standing, talks with Senate President Bob Burns during the Legislature’’s fourth special session in four months. (Ross Franklin / Associated Press / November 19, 2009)

By Nicholas Riccardi
November 27, 2009

Reporting from Phoenix –  When the Arizona State Senate broke into disarray last week during its fourth special session in four months to deal with this state’s seemingly perpetual budget crisis, Senate President Robert “Bob” Burns told his colleagues: “It amazes me we’re having this much trouble. This is the easy part.”

It took until Monday for the GOP-controlled Legislature to pass $300 million in spending cuts, ones they had already approved in June but which were vetoed by the state’s Republican governor, Jan Brewer.

Even so, Republican lawmakers still argued among themselves over how to close what is a relatively small part of the state’s deficit. Looming on the horizon is a nearly $2-billion gap that remains in this year’s $10-billion budget. Next year the deficit rises to $3 billion.

In percentage terms, Arizona’s deficit is nearly as big as California’s, and although the state may lack a movie-star governor, there has been no lack of drama in Phoenix for several months.

The state has put its Capitol buildings on the block to raise money. It is trying to privatize its prisons, and some legislators are talking about a four-day school week. This month, the Pew Center on the States ranked Arizona as having the second-worst budget crisis in the nation, just behind California.

“There are actions they can take, but none of them are easy or pleasant,” said Dana Naimark, president of the Children’s Action Alliance, a local group fighting budget cuts.

Noting that legislators have already cut more than $500 million since February, she worried that the state is already reeling from reduced services. “It’s very disturbing, going backwards on so many fronts,” she said.

Most states need to have budgets in place each July 1, when the fiscal year begins. But with the economy in the tank, many states are watching new deficits pop up as tax receipts plunge and more and more people demand social services to alleviate their own financial woes.

Arizona and California — which still faces a deficit of $20 billion — are only two of the most extreme examples. Thirty-five states are still scrambling to balance their books for the current fiscal year.

“We’re seeing this in several states across the country because the revenues continue to drop faster than projected,” said Sue Urahn, managing director of the Pew center.

Arizona’s revenues are 16% lower than projections made as recently as this summer. Unlike California, the state grew rapidly this decade. Legislators, awash in tax money, cut taxes and expanded government.

But that growth was fueled by booming real estate. Now Arizona has one of the highest foreclosure rates in the nation, and its economy has ground to a halt.

For months, Brewer battled with members of her party, arguing that an emergency tax hike was needed to save vital programs. But conservative Republicans refused to raise taxes, saying it would devastate Arizona’s already weak economy.

This summer Brewer vetoed cuts in education and social services, insisting that the Legislature live up to a deal to place a penny sales tax hike on the November ballot. But the referral to the ballot failed by one vote, and Brewer signed cuts into law this week.

On Monday, Brewer and GOP legislative leaders are scheduled to meet to discuss how to get a possible tax increase on a future ballot. Kim Sabow, a spokeswoman for the governor, said the delay has been because “every single Democrat and a handful of GOP extremists have prevented solutions from passing — choosing only to vote ‘no’ instead of being responsible for participating in solutions that have a chance of passing.”

The budget battle has so far been an all-Republican affair. The GOP holds commanding majorities in both houses of the Legislature. Democrats, who have voted against every major budget bill, complain that Brewer would not negotiate with them until days before the July 1 budget deadline.

“She has been unwilling to work with the Democrats to get her proposal through,” said David Lujan, minority leader of the House of Representatives. “The problem’s so big we can’t cut our way out of the crisis. We have to raise revenue.”

Steve Pierce, majority Senate whip, said the state may be able to come up with ways to raise money — by cutting taxes. He said that cuts in business taxes may raise tax revenues…

Pierce said Arizona would have to find a new way to govern itself. “We’re going to have to redo government here,” he said. “There are good programs that were created in the past that we just can’t afford anymore.”

He floated the idea of cutting both the government workweek and the public school week to four days, and of violating the minimum funding levels the state needs to meet in K-12 education and healthcare to qualify for stimulus funds.

Burns, the Senate president, said that lawmakers would be unable to take decisive action until voters gave them direction. “We need to let the voters tell the Legislature what is your choice,” he said. “Do you want taxes or what some people call ‘draconian cuts?’ ”

Of course, putting that question on the ballot would require another special session of the Legislature, possibly as soon as December.

“This year, it doesn’t seem like it’s ever going to end,” Burns said. “It just keeps going.”


Comments

  1. Gee I would comment says

    Why Senator Burns, a rollback to the 2000 level of taxes might be a start?

    Could it be that the Republican party is incapable of Constitutional Governance?

    Yup.

    Could it be they can’t manage to do a deal with the dems to raise taxes, because they want to fail and not govern?

    Call it successful. They have managed to break government by starving the beast, but now they own the wreckage.

    Too funny!!!

    Nappy is laughing at you clowns!

    She knew that you guys couldn’t lead your way out of a paper bag.

    Time for resignations.

    How about the clown from D7 who doesn’t even understand he is the elected idiot who is supposed to solve the problems, not whine for a “receiver” to solve them for him.

    There is just too much ideological stupidity in the Republican party. I guess getting rid of the Rinos lowered the iq sufficient to allow Russell P to be considered a bright light, and J.D. to be considered a viable candidate against a sitting R senator.

    Friggin morons who deserve to sit out in the cold a long long long time.

    I think realizing this is true is what is driving Chuck C around the bend.

    The there is the Rose amusement facility providing endless entertainment as they try to create and package a new gov, yet again.

    Asked Gnant how he feels about you lately?

    Bah. This party seems like it is never going to end, just more stupidity beyond belief.

    I can hardly wait to see the headplant Andy is going to do against the dullest man on the planet.

  2. Options: Higher taxes or what some people call draconian cuts.

    My choice: What some people call draconian cuts.

    I continue to be disappointed in Bob Burns. Higher taxes are not popular with taxpayers and he should know it. For him to presume to defer to the voters is for him to not remember why people voted him into office in the first place.

    Is he going to refer a ASU/UofA/NAU privatization plan to the voters because the voters need to be consulted in order to provide direction?

  3. Is it just me, or does the above picture look like it came straight off a 1970’s sitcom show? Substitute the computer screen for a Bakelite phone and an ashtray full of smoldering ashes and I’d swear it’s Archie Bunkerish.

  4. James Davidson says

    In case some of you did not see it, an article in the newspaper last week said that 48% of home loans in Arizona were under water, meaning the owner owed more on the property than what it was worth.

    That sends the clearest message: we are not coming back to a normal economy in Arizona for years.

    That being the case, the message also is clear that Arizona cannot afford the size of state and local government that we had in the middle of this decade.

    The rational approach is to restructure govenment to fit the size we can afford. It will be hard, and many will suffer. Let’s not pretend otherwise. But raising taxes is not the answer. It is more of the disease, not the cure.

    If the Governor has any remaining chance of re-election, she should undertake the project of completely rethinking and restructuring Arizona state government.

    And then she should focus on job creation in the private sector. In fact, her campaign theme should be threefold: jobs, jobs, and jobs. I don’t know whether she is capable of this. But it’s her only ticket to another term.

  5. It’s been said many times that California doesn’t have a revenue problem; It has a spending problem. Though I’m a CA resident, I would imagine the brunt of Arizona’s financial woes stems from an inefficient government. I agree with Steve Pierce that government needs to be rebuilt, and the same applies to CA. We can start on local levels by encouraging our elected officials to spend our tax dollars wisely. I live in Los Angeles County, and we’re seeing the process begin with our Board of Supervisors. Recently, they reissued an RFP for vendor services to operate the county’s GAIN case management services (a welfare-to-work program)- very important services to have in a down economny. I expect the same two companies will submit proposals as last year – incumbent Maximus Inc. and newcomer Policy Studies Inc. (PSI).

    Maximus has maintained its contract with the county for many years now, but its cost to the taxpayers keeps skyrocketing. If the new bids resemble those from last year, we can expect that the Maximus bid will cost taxpayers almost a million dollars more than PSI’s.

    What’s more, Maximus has a track record of poor performance. Under its latest three year contract, Maximus has been cited repeatedly for failing to meet required goals in 5 of 8 categories (according to the LA Times). Last year, the Department of Public Social Services favored PSI based on scoring done on the two companies by a neutral third party. PSI scored 9,082 out of 9,616 possible points in the procurement process, whereas Maximus scored 7,824 of 9,616. PSI won by a 13% margin on technical score and also submitted the lowest bid, which was 6% cheaper.

    Even worse, Maximus has spent hundreds of thousands of dollars trying to buy the support of the Board of Supervisors through lobbying and campaign donations.

    I, for one, am grateful that the BOS reissued the RFP and am confident they will select the right choice for LA. In these tough economic times, we need our local elected officials to scrutinize how every tax dollar is being spent and eliminate waste wherever possible. I hope we see a changing of the guard both in CA and AZ very soon.

  6. What’s the new mantra that’s been heard in New Jersey?
    The AX – not the TAX.

    BTW. Our kids are already in a four day a week school. Best idea ever. Three day weekend for kids, got a day for doctors, ortho appointments, etc, never have to pull a kid out of class again. Brilliant use of time for the same hours in a day – they just lengthened the length of the class period. People do not realize how much time is wasted of a day just changing classes every 55 minutes. Ten minutes per class of milling around moving to the next class adds up fast. Wasted.

Leave a Reply