Warning on Fund Overdraw

Arizona’s general fund will be overdrawn by mid-May unless state spending slows down significantly, Treasurer Dean Martin told the Senate Appropriations Committee last week.

Martin issued a warning in mid-March that the state was spending an average of $35.7 million a day and would face a depleted general fund by late April. The latest report showed spending dropped to an average of $6.2 million a day after March 18.

“State government appears to have dramatically slowed its rate of spending since that announcement,” Martin said. “This reduced level of spending has saved taxpayers over $300 million above estimates in the past two weeks. However, the structural deficit still remains. The general fund can still only cover three more paychecks and one more payment to schools before the account is overdrawn.”

The treasurer said the spending slowdown translates into a depletion of the general fund sometime between May 6 and May 15, later than the earlier estimate of April 22 to May 4.

Arizona spent a total of $724.5 million in March, Martin said, of which $643.4 million was expended before his warning on March 18. State general fund expenditures for fiscal 2008 totaled $7.75 billion through the end of March.

Expected expenditures for the remainder of fiscal 2008 include $845.4 million in April, $873.6 million in May, and $845.4 million in June, Martin said.

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