Good News!  We finally have a Republican plan for the 2009 budget.  Here is the simplified breakdown of how we propose to bridge a $1.9 BILLION deficit:

$  391M   Fund Shifts (And yes, this includes SLIF monies)
    505     Reductions in Agency/Dept. spending
    501     Bonding/Lease Purchase Agreements for school construction
    187     "Reassessments" in school construction
    106     Shifting DPS funding to Highway User Revenue Fund (HURF)
      85     From the Budget Stabilization (Rainy Day) Fund
      18     Urban Revenue Sharing (no change in formula, but reneging on a promise
             to pay prior year shift in 2009)
      76    School building renewal funding decrease

$1.869 Billion (approximate)

Now the bad news.  Senate President Tim Bee, as he did last year, has crafted a budget with the Senate Democrats and two Republican Senators that supposedly has the blessing of the Governor.  As you might expect, this budget has less reduction in agency spending (by about $200 million) and more reliance on bonding.  Republican leadership just learned of this "deal" at about 10:00 this morning  (Monday), and as of this afternoon had no details, just some round numbers.

And, just as last year, we cannot guarantee that we can even pass the House version out of the House.  It's expected to come to a vote on Wednesday, but I haven't learned when the Senate is going to vote on its version.  If each passes its respective house, then there will have to be further negotiation to blend the two.  But if we can't get at least 31 votes for the House budget, we'll simply roll over (again) and the Democrats will have their way. 

Having to swallow any bonding is hard enough, but to know that we're forced into that position because we can't find the will to control out of control spending makes it even more difficult.

On top of all of the above, there is the Governor's $1.4 billion proposal for more spending for university infrastructure that she's trying to sell as an economic stimulus package -- and this, of course, would be financed by more bonding.  And even above this, we're being asked to consider another "stimulus" package that would provide for additional sales tax in Pima County to upgrade the minor league baseball facilities, a tax moratorium for an entertainment district in Phoenix, and more research and development and solar tax credits.  No figures yet on how much these tax credits would take from General Fund revenues, just the usual "it will grow the economy."  I truly don't expect this will pass, but there will be some arm twisting along the way.

I cannot tell you how frustrating it is to be forced into these horrific choices -- to either vote against a budget you know is bad, or take the chance on something even worse winning the day.  I realize that these are not just numbers -- the decisions we make affect our citizens in a myriad of ways.  Taking on so much additional debt will have implications far into the future, as will not reducing spending.  We expect that the economy will rebound (it always does), but it cannot possible grow fast enough to cover the additional costs.  So we're just pushing the problem on to other years, apparently in the hope of another cycle of higher than average growth that will bail us out.

Not the way I run my business, and not the way we should run the State.

By next week, this should all be finished and you will have read the results in the paper or on line.  But I'll have some final thoughts on the entire budget process to share.

Until next week,

Nancy

Nancy McLain, District 3, Arizona House of Representatives
nmclain@azleg.gov or
nmclainbhc@aol.com