Weekly Report |
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January 19.2009 I am so grateful to be starting my fifth year of service in the AZ House of Representatives. Opening day was full of ceremony, and I was pleased to be joined by my husband and good friends Tom and Shirley Ciresa.
But the next day, we really got down to the hard work of solving Arizona's budget crisis as we began three days of "Budget Boot Camp." Tuesday saw the regularly scheduled meeting of the Finance Advisory Committee, and all legislators were urged to attend. This group is comprised of economists from the private sector, the University of Arizona, and those on legislative staff. They meet to examine trends and give us an indication of how the economy is doing and what to expect in the future. The news was not good, as most do not see a return to average growth until 2012. There is still an oversupply of housing, which does not bode well for the construction industry -- a major component of the Arizona economy.
On Wednesday, we listened to a panel of people representing businesses of all sizes, from small to giant. They were asked to tell us how their companies are reacting to the slowing economy and what steps they had taken to insure that they could survive. Despite their varying sizes, they all had the same basic answer: look for ways to cut their operating expenses, including elimination of most travel; suspend capital outlays; and, lastly, reduce staff.
That afternoon we heard a presentation from our Joint Legislative Budget Committee (JLBC) about the budget shortfalls for both 2009 and 2010. Again, the news was not good, as they reported that instead of a deficit of $1.2 billion we now face an increased amount of $1.6 billion. Revenues and collections continue to decline, resulting in the revised figure.
Thursday morning brought a panel of city and county leaders, who also told us of their efforts to control spending. Their answers were basically the same as the private sector in that they have cut all the "fat" in their budgets. They all emphasized that they had tried not to cut public safety departments but that if additional cuts were necessary, police and fire services could not be left out.
Finally on Thursday afternoon we were shown a presentation on possible options for balancing the current 2009 budget. There was a discussion of what is and is not "voter protected" -- those issues on which the people have voted and expressed their desire to see certain programs or policies implemented. They include Prop 301, which mandates an increased level of spending for education, and Prop 204, which defines eligibility for health care services.
There is a debate continuing as to the formula created by 301. Here's how JLBC defined the situation:
"Prop 301 requires inflation adjustment of base support or transportation components.
Attorney General has opined that both components are to be inflated.
Inflating both costs $110M, while adjusting transportation costs $8M."
Prop 204 is even more complicated, as there are federal mandates and restrictions which must be factored in as we try to control this ever expanding cost to the state.
All in all, this was a very intense week, as we tried to absorb the magnitude of our deficit and start to explore ways to close the budget gap. This is only a very brief outline of the vast amount of information presented. In the coming weeks, our job will be to distill this information and come to grips with our problem. It's not going to be easy, but this is our job. |
Provided by Nancy McLain, Dictrict 3 |