State to get $4 billion from stimulus

By Howard Fischer
Capitol Media Services
Published/Last Modified on Tuesday, February 24, 2009 3:29 PM MST


PHOENIX  Arizona is in line for more than $4 billion from the justsigned federal stimulus package.


But lawmakers and the governor aren’t sure if they can afford to take all of it: Many of those dollars have strings attached.

An analysis Thursday of the law by Richard Stavneak, staff director of the Joint Legislative Budget Committee, also revealed that $185 million of the cash headed Arizona’s way is being given to Gov. Jan Brewer to spend pretty much any way she wants. That annoyed Sen. Russell Pearce, RMesa, who said members of Congress should know that it is the legislative branch of government  and not the executive branch  which sets funding priorities.

More than $1 billion of Arizona’s share consists of “stabilization’’ funds. One issue is how quick to spend it.

Stavneak told lawmakers that cash is supposed to last for two budget years. He said, though, federal law lets each state decide how much to spend now and how much, if any, to save for later.

Of that total, $832 million is specifically earmarked for aid to education, including K12 schools, community colleges and staterun universities.

Stavneak said those dollars are designed to help states deal with funding cuts. And he said the law does allow lawmakers to make up for the cuts in state aid they just enacted.

He warned, though, the law contains a “maintenance of effort’’ provision: States cannot reduce their own education dollars below what they spent in 2006.

Stavneak said that does not appear to be a problem in K12 funding which, even with $133 million in cuts just made, still is $433 million above that 2006 level.

But the $150 million in cuts to higher education made last month now leaves funding there just $70 million above those 2006 levels. That leaves little room for further cuts to community colleges and universities this coming budget year without risking the loss of those federal dollars.

Another $185 million is coming to Arizona for general help. But lawmakers won’t get to touch that: Stavneak said these dollars, like all federal grants, go to the governor.

Pearce said that makes no sense.

“We’re working the budget every day,’’ he said of the Legislature. “If you don’t plug the holes (in the budget) right, you do damage.’’

Pearce said he presumes the Republican governor will work closely with the Legislature, also in GOP hands, to decide how best to use those dollars.

Gubernatorial press aide Paul Senseman said Brewer will consult with lawmakers. But he said she won’t give them the final say.

That still leaves the question of what the state can  and cannot  afford to take.

Aside from limits in cuts to education, the stimulus package contains other strings attached to another $1.5 billion Arizona would get in what Stavneak called “secondary’’ relief.

For example, the state could get nearly $51 million in help to provide day care services for children. But the Department of Economic Security, faced with cutting its budget by $98 million, took $24 million out of that program, funds that would have to be restored if Arizona wants those additional dollars.

Pearce said he’s not sure it’s worth increasing state spending, even with a 2for1 match of federal cash.

Another $39.4 million in grants for law enforcement or courts can come to Arizona only if the dollars don’t replace previously made cuts in state funding.

There’s also $522 million available in highway dollars, but only if the state Department of Transportation does not cut back on what it already was planning to spend.

Senseman said Brewer wants to accept as much in federal money as the state can get, if for no other reason than it gets back cash Arizonans sent to Washington in the first place.

“However, we’ve got to account for those and make sure it doesn’t exacerbate the already massive budget deficit,’’ he said. Senseman said Brewer is “still evaluating’’ which funds to take.

 

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