As most of you know, I write my "Weekly Reports" and "Issues and Answers" columns myself.  However, what follows sums up my perspective so thoroughly that I might as well have written it.  This article was written by Sen. Bob Burns, Chairman of the Senate Appropriations Committee and originally appeared in the Arizona Republic on Tuesday, February 26, 2008.  Since most of us don't receive the Republic any more,
I thought it was worth sharing with you:

Dithering governor lets budget crisis grow

"The governor's lack of leadership, her failure to take action early in identifying the budget shortfall and continued failure to propose viable solutions have put Arizona in a budget crisis.  And if history is any indication, we can expect to soon hear that it is all someone else's fault.

If Arizona were a corporation, the Legislature is the board of directors and the governor the chief executive officer.  Our job is to manage the finances and operations of our citizens' state government.

Due to a number of circumstances, authorized spending levels have far exceeded available revenue (over $1 billion for fiscal 2008).  This impending budgetary storm was recognized last July.  The Legislature was out of session and unable to act unless call into special session.  The governor, however, is capable of taking action any time.  The current year's passed budget authorizes spending up to a specific level.

She, having management control over all state agency directors, has many options available to govern state spending.

If this were a private company, the CEO and board would take immediate decisive action to bring the storm under control, or at the least, to lesson its impact.  They would continue to act until the problem was corrected or they would be out of business.  In our case, this responsibility was left with the governor.  She took no decisive action and, as a result, our  budget problem escalates.  Her borrowing proposal with only symbolic spending reductions not only does not solve the problem but actually makes it worse.

The debt service in her plan will add as much as $215 million annually to state spending, which will be added to the already $500 million to $600 million annual increase that takes place without any legislative action.  It is like the budge is on auto pilot with its formula-driven spending.  The annual $500 million to $600 million structured growth and the added $215 million will bring automatic spending to the $800 million level.  The removal of this amount of revenue from the Legislature's discretion will increase the pressure for more future borrowing.  The borrowing's annual debt service increases will result in a downward spiral.  The state's historical revenue growth is about 7 percent or approximately $700 million per year; $700 million in, $800 million out -- the math does not work!

This budget storm can be solved only by significant reductions in spending or an increase in revenue by increased taxes.  The governor's proposed bonding would provide a short-term cover-up of her failure to use the tools available to her office to control this storm.  Her insistence on borrowing and her pressure on the minority caucuses not to support meaningful spending reductions are resulting in a deadlock.

Borrowing allows spending to continue in excess of available revenue.  Using funds in the rainy day fund and other cash resources will work only to balance the current fiscal year, pushing the structural deficit into the next fiscal year.  We need to change the budget process and phase out many formulaic-driven programs.

This CEO/governor has failed to lead in this budget crisis, and we need to put this fire out now before it becomes a complete and utter disaster."

That concludes Sen. Burns' statement.  As I said earlier, I agree with these sentiments in their entirety and only wish that the stalemate could somehow be broken and we could get this behind us.  We have not yet even started the budget deliberations for fiscal year 2009 which begins July 1st.  I have a feeling that we'll be in session until June 30th this year.

Until next week,

Nancy