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Brewer signs FY09 budget bills

Gov. Jan Brewer on May 14 signed two bills to adjust the fiscal 2009 budget with a combination of federal stimulus money, delayed payments to K-12 schools and universities, and excess funds saved in recent years by school districts.

The budget fix authorizes the use of $250 million in stimulus money from the American Recovery and Reinvestment Act. It also delays $300 million of a $330 million payment due to K-12 on May 15, as well as $100 million due to universities. Lawmakers said the payment would be made by Oct. 1.

Brewer had been critical of such rollovers in the past, referring to them as “accounting gimmicks” and “funny math,” but said the state was left with little choice after suffering an extensive drop in state revenues and an increase in the number of people seeking benefits from the Arizona Health Care Cost Containment System.

“We certainly didn’t anticipate the last couple of months of the revenue coming in the way that it didn’t, and certainly the increase of our AHCCCS rolls. There had to be a compromise,” Brewer said.

Until school districts receive the money from the rollover, they will be able to cover operating costs using $300 million in reserve funds they had accumulated. Brewer said, “It’s always unfortunate when you have to go in and take money … for a reason that it wasn’t always intended for, but we are facing the hugest crisis in the state of Arizona that we have ever faced, so we have to do what we believe is right.”

“I feel comfortable with what we’ve done, and we know that it’s not going to have any impact on any teachers at this point in time,” the governor said.

Before the Legislature passed the bills on May 13, the governor’s spokesman Paul Senseman said $250 million was the maximum amount of stimulus dollars Brewer was willing to use for education in the 2009 budget. Using more, he said, would drain ARRA money needed for education in fiscal 2010. The stimulus act provides more than $800 million for K-12 and university education through fiscal 2011, though Senseman questioned how much of the money would be left for the final year.

“We just spent 250 (million) of that. I certainly didn’t want to frontload it in 2009 because we know that the deficit going forward is going to be a lot larger, and those dollars are going to have to be used in there in order to accommodate the deficit that we’re facing,” Brewer said of the stimulus money.

In a press release, Brewer thanked the Legislature for its work in balancing the 2009 budget, saying “it was not a simple exercise.” She followed up by saying she hopes lawmakers can reach consensus on her policy goals – presumably including her controversial call for a temporary tax increase – and quickly pass a 2010 budget package.

She also noted it is just a few months until state agencies must begin preparation for the fiscal 2011 budget process, and said she will not approve a 2010 budget that does not take the following year’s needs into account.

“Now is the time for the Legislature to build upon the momentum of this FY09 fix and work with me on a balanced budget that is comprehensive, sustainable, addresses all five points in my five-point plan and does not ignore the next budget process that is merely months away,” Brewer stated in the press release.

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