The Republican-controlled Legislature voted along party lines last week to freeze $581 million in state spending to spark negotiations on dealing with Arizona’s anticipated revenue shortfall in fiscal 2008 of $1.2 billion.
The measure, which Democratic Gov. Janet Napolitano is expected to veto, would suspend $260 million in spending by state agencies along with $321 million in spending from special program fund balances.
Democratic legislators were thwarted in efforts to exclude public schools and state colleges from the spending freeze.
House Majority Leader Tom Boone, R-Peoria, said the measure was a freeze in spending, not a budget cut. He said the freeze would be in effect until a budget agreement is reached with Napolitano.
“With a $1.2 billion deficit looming, holding aside about 2% of the state’s general fund seems prudent,” Boone said.
However, Senate Minority Leader Marsha Arzberger, D-Willcox, said the action would complicate negotiations without solving the financial problem. She said the freeze could endanger federal grants that require state matching funds.