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Napolitano orders review on state expenses over $50,000

As lawmakers bicker over how to alleviate Arizona’s overextended budget, Gov. Janet Napolitano is looking to the state’s myriad government agencies to save money, while calling on school districts to help save themselves.
At her weekly press briefing on Oct. 7, Napolitano said she has ordered all state agencies to freeze any general fund expenditures or contracts of more than $50,000 until they can be reviewed by the state’s procurement office and have received approval to go forward. She also said she is asking Arizona’s 200-plus public school districts to trim their operating costs so more money can be spent in the classrooms.
Expounding on a theme she broached the week before, the governor said agencies should continue to make sure they are only spending money for “mission-critical” purposes.
“In order to make sure that we are not expending monies this year just because we had planned to spend those monies but that we are really evaluating whether it’s necessary to spend those monies this year, I am ordering state agencies to freeze any general fund expense, contract or contract expenditure over the amount of $50,000 until it has been reviewed,” Napolitano said. “We want to make sure that nothing above that number goes forward just on the assumption that it always has and always will. Everything has to be looked at independently.”
State government agencies already had been operating under a mandatory hiring freeze.
Napolitano had said K-12 education was off the table when it came to discussions on how to trim the current fiscal year 2009 budget that has been projected to be short as much as $1 billion. And because of the problems with the budget, she said, it is unlikely that the state will be able to approve more money for public schools during the next year. Instead, the governor said the school districts should find ways to save themselves money.
Some school districts in the state are spending above the national average on out-of-classroom expenses such as food service, buses and maintenance, Napolitano said, while others are finding ways to save money on those types of expenditures. The governor pointed out districts such as the Chandler Unified School District, which she said has reduced its energy expenditures by doing things such as controlling its thermostat system remotely to save energy. She urged other districts to employ such measures.
“Even in these down-budget times, we want to protect K-12 spending. That’s a big part of our state budget. Well, if we are going to do that then it’s incumbent on school districts to come forward and use those dollars very, very wisely,” Napolitano said.
In 2003, the state started using a program called the Nickel Project, which challenged school districts to find an extra five cents in every public education dollar that they could put into the classroom. In its first year, the program identified more than $100,000 that could be moved into the classroom, but the program has been dormant since 2005.
In addition to ordering state agencies to freeze spending on all large contracts, Napolitano said she would write to the Board of Regents and Arizona’s public university presidents and ask them to cut costs using the same tactics.
The governor did, however, defend continued construction for university expansion projects and classrooms for all-day kindergarten. Not only does it provide greater educational opportunities for Arizona students, she said, but the projects themselves will create 20,000-30,000 new jobs at a time when unemployment rates are going up.
“These construction projects are jobs in a sector of the economy where we need jobs badly,” the governor said. “We continue to build in this state. We continue to add schools, invest in higher education, and to me that’s the long-term vision. You’ve got to be educating the next generation, even as you’re cutting back on some expenditures.”
The previous week, a legislative oversight committee declined to review spending for university renovation and construction projects, which elicited concern from university officials that they would not be able to move forward with the projects. Napolitano said she was monitoring the situation and that she believed the projects would continue as planned.
“To have one legislator, or a few legislators, stand in the way of these is a terrible shame. I don’t think they have the legal authority to do so. We’re looking at what our options are,” she said.
Napolitano also urged Arizonans to redeem a federal tax credit that could help lessen the strain on their own personal budgets. Until Oct. 15, she said, people can still claim a federal earned income tax credit for 2007, which last year gave Arizona families an average of almost $1,500, and in some cases as much as $4,700.
Some lawmakers have called for Napolitano to convene a special session of the Legislature to deal with Arizona’s budget problems. The governor has said that now is not the time because the state still does not have some pertinent information it will need, such as the school districts’ final student count for the year, and because legislators are in the middle of their re-election campaigns. But in the week after the Nov. 4 election, the governor said, she will meet with legislative leaders, and they are likely to call at least one special session.
Anyone interested in claiming their federal tax credit can get information about it at www.az211.gov.

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