Budget crisis looms over Arizona governor's race

The winner of the Arizona governor’s race might want to stock up on aspirin.

With the state’s budget crisis showing no signs of abating, voters on Nov. 2 will be electing a governor who could have a yearslong headache while trying to keep the state running and in the black amid a still unsteady economy.

About a third of Arizona’s previous revenue has evaporated thanks to the recession, putting the state in a fiscal bind that began to be felt in late 2008.

Since then, more than 2,000 state workers have been laid off as services and programs ranging from parks to universities endured $4.4 billion of spending cuts and funding raids. That’s despite billions of dollars of federal stimulus funding and state borrowing, along with voter approval of a temporary sales tax increase. Shortfalls are projected for years to come.

“Difficult decisions are going to have to be made, no doubt about it,” Republican incumbent Jan Brewer said in an interview. She’s being challenged by Democrat Goddard.

Both candidates are in their mid-60s and Arizona political warhorses.

Brewer served as a state legislator and county supervisor before being elected secretary of state in 2002. She was elevated to the governor’s office in January 2009 — just in time to confront the worsening budget crisis — when Democrat Janet Napolitano resigned to take a federal Cabinet post.

Goddard is the two-term state attorney general. He’s an ex-mayor of Phoenix and former federal administrator who ran twice unsuccessfully for governor in the 1990s.

The governor’s race earlier this year was largely centered on illegal immigration and border security concerns that dominated the state’s political discourse. The Republican-led Legislature passed a controversial but popular law on illegal immigration last spring, and Brewer’s signing of the measure helped her politically but stoked controversy that caused some critics of the law to boycott the state.

Brewer criticized Goddard for opposing the law known as SB1070, saying he wasn’t standing up for Arizona in the face of inadequate federal border enforcement. Goddard said the law doesn’t secure the border and that his work against smuggling cartels is more effective.

But the immigration issue has cooled somewhat, with the law tied up in the courts and the candidates increasingly discussing jobs and other issues.

“The voters … largely have come to the conclusion that border issues are coming under control … so they want to hear about other issues,” said Earl de Berge, research director for a Phoenix polling firm.

Brewer and Goddard offer somewhat similar job-creation plans to relaunch an economy pummeled by the recession’s punch to the housing and travel industries. Common elements include involving leadership from the private sector in shaping the state’s economic development efforts, targeted business tax relief and emphasis on solar industry.

On the budget, Brewer and Goddard offer some clues on what they’d do but also leave much unanswered.

Goddard proposes hundreds of millions of additional borrowing to cover the projected shortfall in the current budget. And he said the state must review hundreds of existing tax exemptions and credits — he calls them “loopholes” — to identify those that can be eliminated to net more revenue for future budgets.

He said state policymakers will choose what changes to make and he isn’t providing a comprehensive list of his own choices. However, he said he’d tax country club dues and tanning salons’ services and end tax breaks for the mining industry. Those could add up to $100 million.

Goddard, whose own office was the first state agency to make layoffs in response to the budget crisis, has taken education cuts off the table while warning that Brewer is poised to cut school funding.

“She has a secret plan,” he warned, citing contingency cuts that would have taken effect if voters rejected the sales tax increase. “She hasn’t hesitated to slash school budgets — I won’t.”

Brewer isn’t saying what she will include in her next proposed budget, due in January when lawmakers report for their 2011 session. But she acknowledged there’s a possibility of more spending cuts. Some less painful savings might come from a panel she has looking for efficiencies and privatization opportunities, she said.

And Goddard is just engaging in “rhetoric” without proposing real solutions, Brewer said, citing her own willingness to push for the temporary sales tax hike that Goddard endorsed after Brewer told lawmakers she couldn’t support business tax cuts.

“Mr. Goddard didn’t do diddly until a few days before the election to even jump on board in regards to education, Brewer said. “I put my career on the line for that and the voters of Arizona overwhelming supported me. They trusted me.”

An early October statewide poll of likely voters showed Brewer ahead by 11 percentage points, about half the lead she enjoyed in the summer.

Brewer said she’s happy to still have a double-digit lead. Goddard said momentum is on his side in the campaign’s final weeks.