Gov. Jan Brewer last week signed two bills balancing Arizona’s fiscal 2009 budget, but warned that the state’s fiscal woes won’t go away soon.
Legislators adopted a budget plan that eliminates an estimated $650 million budget gap by postponing a $100 million allocation to higher education, delaying a $300 million cash payment to public school districts, and drawing on $250 million of federal stimulus funds.
Brewer said similar maneuvers won’t help the state avoid an estimated $3 billion deficit in fiscal 2010.
“It would be fiscally irresponsible for the Legislature to ignore the depths of the fiscal 2011 state deficit by promoting a budget plan for fiscal 2010 that relies primarily on one-time measures,” she said after signing the budget bills.
She repeated her call for lowering spending by $1 billion a year and temporary hike in taxes to generate an additional $1 billion annually for several years.
“Spending reductions and federal stimulus dollars alone will not come close to fixing the fiscal 2010 budget or future budget deficits,” Brewer said. “New revenues of roughly $1 billion will be necessary, as federal stimulus funding will only cover approximately $1 billion of the deficit. “I will not approve a budget [for fiscal 2010] that does not take into account fiscal 2011 needs and requirements.”
Education groups representing teachers, school boards, administrators, and budget officers gathered at the state capitol last week to protest the reduction in aid to public schools.
The legislative plan calls for sweeping funds from public school district budgets in excess of the mandated carry-forward level of 4% of maintenance and operations budgets.
A spokesman for the Association of School Budget Officials said the funds are used to determine property tax rates for the following year, and a sweep by the state could require local tax increases.
Senate President Bob Burns, R-Peoria, said that was not the case.
“The use of the school’s excess cash is part of a solution that authorizes districts that have excess funds for maintenance and operations to spend their own money for 2009 and does not create a negative cash balance or the need for a property tax increase,” he said.
House Speaker Kirk Adams, R-Mesa, said the Legislature had limited flexibility in balancing the fiscal 2009 budget.
“Given the state’s historic budget crisis and continued revenue problems, this Legislature had few good options to close the $650 million deficit remaining in the budget,” he said. “Doing nothing was definitely not an option. Using school district excess cash balances is a far better alternative than further cuts to education.
“By moving quickly, we can address the state’s cash-flow problem in a way that does not reduce school district spending authority or increase property taxes.”