Gov. Jan Brewer touted a year-ending budget surplus that’s about $200 million more than was expected, which the governor attributed to the improving economy and her “sound fiscal leadership.”
In a press statement on Monday, Brewer said the state had an estimated cash balance of about $895 million at the end of fiscal year 2013. The budget approved by lawmakers and Brewer in June estimated a surplus of about $694 million.
In addition to the bigger-than-expected cash balance, the state also has $454 million in its rainy day fund, which was drained during the budget crisis and restored in fiscal year 2012.
The Governor’s Office credited Brewer and the plans she put in place early in her tenure to get the budget back in order. The press statement noted that Brewer oversaw cuts of more than $2 billion to the state’s budget, shifted to long-term budgeting and focused on finding one-time revenue.
“The improvement in the state budget reflects the success of Governor Brewer’s plan that she presented more than three years ago to permanently reduce spending and ensure we continue to live within our budget,” the press statement read.
Brewer emphasized that the current projections are a far cry from where the state was just a few years ago, when it faced massive budget shortfalls. The state ending fiscal year 2009 about $480 million in the red, and didn’t again have a sizeable surplus again until the end of fiscal year 2012.
“This remarkable cash carry forward is a stark contrast to Arizona’s position just a few short years ago when we faced one of the largest budget deficits in the country, and a sign of our steadily-growing economic comeback,” Brewer said in the press statement.
Despite the good budget news, Brewer said the state should remain wary of falling back into a fiscal hole.
“Of course, when it comes to managing and stabilizing state finances, our job is never complete. As we celebrate our improving economy, it is important that the state be mindful to not revert to the policies and practices that pushed it to the brink in the first place,” she said.
John Arnold, Brewer’s budget director, echoed that message.
Arnold said the cash balance gives the state more flexibility for next year’s budget, but that policymakers should be mindful of the structural deficit Arizona will face in FY14 due to the expiration of Proposition 100, the temporary sales tax increase that voters approved at Brewer’s urging in 2010. He said the governor and Legislature built the cash balance into the current budget to compensate for that shortfall.
“Things are better, but we still need to be prudent. And I think the governor’s going to approach it that way,” Arnold told the Arizona Capitol Times. “We’ll be careful and we’ll weigh the priorities of the state and continue to look at revenue streams and try to understand what resources are available to us, and then address things that we need to address, just like we always do.”