2008-09 budget woes
Governor’s ideas range from revenue to delays


Published/Last Modified on Tuesday, November 18, 2008 5:14 PM MST


PHOENIX — Gov. Janet Napolitano’s ideas for closing the state’s budget shortfall include selling some future lottery revenue in exchange for an upfront payment, delaying payment of some agency expenses into the next fiscal year and banking on ticket revenue from speed enforcement cameras.


The ideas are among those suggested by Napolitano to the Legislature to cover a projected $1.2 billion revenue shortfall in this fiscal year’s $9.9 billion state budget, The Associated Press has learned.

The ideas are listed on a budget summary reviewed by the AP. Some elements were described by state officials familiar with ongoing budget work. They spoke on condition of anonymity because they were not authorized to discuss proposals under consideration.

A Napolitano spokeswoman confirmed that some of the ideas on the summary reviewed by the AP have been suggested by the governor for consideration by lawmakers. She said she could not confirm specific figures and said the ideas may not become a formal proposal.

“It’s still very much a list that’s being determined,” spokeswoman Jeanine L’Ecuyer said. “There are lots of ideas being kicked around.”

The Democratic governor and House and Senate legislative leaders from both parties have begun talks aimed at reaching an agreement on a plan that could be submitted to rank-and-file lawmakers during a special Legislative session that may be called in the coming weeks.

As in many other states, Arizona’s finances have been shaken by the economic downturn, with sales and income tax revenue falling.

Napolitano and top legislative leaders met on Nov. 6 to discuss how to solve the budget crisis. Aides have met at least once since then, but there is no indication that an agreement is in sight that would set the stage for Napolitano to call lawmakers into special session.

Previously disclosed proposals by Napolitano include so-called “spending suspensions” for state agencies and programs, a $120 million withdrawal that would nearly empty the rainy day fund and $100 million of transfers from special-purpose funds.

The summary reviewed by the AP did not itemize spending suspensions by agency or program but indicated they could save $300 million. Officials have described the suspensions as temporary cuts.

The summary listed $74 million in postponed payments to universities and $20 million each for the Arizona Health Care Cost Containment System and the Department of Economic Security.

The delay of some agency expenses into the next fiscal year goes beyond the past practice of postponing some state funding for schools from the end of one fiscal year into the beginning of the next one.

“It is an idea. It is a possibility, yes,” L’Ecuyer said of possible funding delays. “Is it a firm proposal, a course of action? No.”

Delaying K-12 school payments is a budget-balancing maneuver regularly used by the state during hard times, but its capacity is considered exhausted because the state has already delayed two monthly school payments totaling $600 million.

Napolitano included $90 million of revenue from photo speed enforcement in last January’s initial 2008-2009 budget proposal. But the budget approved in June had no revenue from that source.

 

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