Lawmakers narrowly approve $9.9 billion budget

By Howard Fischer
Capitol Media Services
Published/Last Modified on Friday, June 27, 2008 3:08 PM MDT


PHOENIX — Without a single vote to spare, state lawmakers gave final approval Thursday to a new budget for the fiscal year that begins Tuesday.


The plan, which passed the House on a 31-29 vote, bridges what had been a $2.2 billion gap between spending and revenues through close to $1 billion in borrowing, some spending cuts and raiding special funds. On top of that, it authorizes the state universities to borrow an additional $1 billion for capital improvement projects and deferred maintenance and repairs, with the repayment linked to convincing Arizonans to buy more Lottery tickets.

On paper, the spending plan totals $9.9 billion. That compares with the original $10.6 billion budget adopted a year ago for the current year, a budget reduced to $10.2 billion two months ago to bring the books into balance when tax collections plummeted.

But making a side-by-side comparison is virtually impossible, as the newly adopted budget for the coming year actually takes certain expenses off the books.

School construction costs, which were paid for with cash this year, are instead being financed.

And $106 million to run the Highway Patrol, which had been paid this year from tax receipts, will instead be funded through gasoline taxes and vehicle registration fees, money that otherwise is not part of the budget and normally goes to road construction and maintenance.

There is, however, about $348 million in spending cuts from current levels.

Among the largest is a mandate to cut $50 million in expenses at the state’s three universities. How that burden is divided up is being left to the Board of Regents.

Community colleges will not get more than $20 million they otherwise would receive for building projects.

But the cuts were not large enough for House Republicans, most of whom opposed the budget.

“In other words we have two months on our credit card that go unpaid,” he said, totaling $660 million. And that comes on top of borrowing $593 million, not only for schools to be built in the coming year but actually financing schools approved in prior years.

Rep. Steve Yarbrough, R-Chandler, specifically objected to the idea of allowing the Arizona Lottery to do more advertising to promote gambling so the state would gain more than $50 million a year in profits to pay off that $1 million in borrowing for university projects.

And Rep. Russell Pearce, R-Mesa, pointed out that the state has drained it’s “rainy day” fund and pretty much swept all the cash out of the various special funds. He said that will leave Arizona ill prepared to deal with the fact that the soft economy will again leave the state short of revenues for the 2009-2010 budget year.

It also directs the state Department of Public Safety to contract for 100 photo radar cameras, both fixed and mobile, to catch speeders. The net proceeds from citations issued by these devices, after costs, would all go to the state, an exception to the state law that normally sends the money to the city or county in which the ticket is issued.

Gov. Janet Napolitano had estimated in January the program could generate $90 million in its first year. But the legislation has no estimate of revenues.

And it saves DPS about $7.8 million by requiring local police departments that use the agency’s crime lab to reimburse it for its expenses.

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