The only thing constructive that came out of last week's Appropriations Committee meeting was approval of a bill that would freeze state hiring, with limited exceptions for positions necessary for health and safety considerations.  One would have thought that this would already have been implemented on a voluntary basis, since all agencies knew there were money problems, but there has actually been a net increase in state employees since July 1.  This freeze still has to be approved by the full House, then on to the Senate and the Governor.  Who knows if it will actually take effect.

The bill that I spoke of last week, which contained the dollar amounts that we anticipated would be cut from the budgets of various agencies/departments, was not introduced.  There was a second special meeting of Approps called for Thursday, but that was canceled. 

Several different scenarios have been proposed and discussed, and from the Republican perspective they all include cuts in agency spending.  The Chairmen of the House and Senate Appropriations Committees originally had suggested reductions amounting to over $400M.  That's been negotiated down to a range of $250-300M, but that is still considered by some to be too much.  In a budget of over $10 Billion, that would be less that a 3% cut, and I don't believe there are any agencies that can't survive with 3% less.

But in order to lessen the amount of the cuts, other measures will have to be implemented.  That includes "fund transfers" -- which means taking money from sources that are supposed to be dedicated for specific purposes, and that amount is projected to be about $300M.  It also includes taking $53M from Highway User Revenue Funds to supplement Highway Patrol funding.  As I mentioned last week, I don't like either of these proposals, but something has to be done to cover the shortfall.  There is also the issue of the Budget Stabilization or "rainy day" Fund.  Some folks have proposed using all of it (about $700M) this year, but that leaves us with a zero balance, with nothing available for the next fiscal year when we will still have major problems.

All in all, this has been a very frustrating process.  We've had full Appropriations Committee meetings, small group meetings within our caucus, small group meetings with both Republicans and Democrats in attendance, and still little progress.  With every day that goes by, the hole keeps getting deeper and the ability to meet agency savings goals become remote.  Republican leadership has taken a firm stance against any bonding for the current year; i.e., going into debt to pay current expenses.  That seems to be the major sticking point in the high level negotiations, but I expect they will hold firm.  We can balance this budget without taking on more debt, and that's the way it should be done.

A bright spot in the week was the District 3 Lincoln Day Dinner in Lake Havasu City.  As always, there was a large turnout of loyal Republicans -- but this dinner had the extra added attraction of Maricopa County Sheriff Joe Arpiao.  Sheriff Joe was his usual entertaining self, and the crowd really enjoyed his remarks.

That's two down, and one to go.  See y'all in Kingman this coming Saturday.

Until next week,

Nancy