Arizona Capitol Reports Staff//October 5, 2007//[read_meter]
Arizona Capitol Reports Staff//October 5, 2007//[read_meter]
For the fifth month in a row, the state collected far less revenue than projected, bringing the budget shortfall for the current fiscal year to more than $300 million.
August revenue was $64.5 million below the monthly forecast. Since the current fiscal year began in July, general fund revenue collections are $89 million less than expected. That is on top of a $226 million deficit in the fiscal year that ended June 30.
The Joint Legislative Budget Committee, which has been reluctant in past months to make an estimate of the potential shortfall for the rest of the fiscal year, now says “some extrapolations may be made” from the first two months of the year.
“After accounting for the lower-than-expected FY 2007 ending balance, the overall FY 2008 shortfall appears to be in the range of $525 million to $675 million. JLBC Staff provided this information to the governor’s staff two weeks ago,” the Legislature’s fiscal analysts wrote in a monthly update. “Last week, the Governor’s Office estimated the size of the shortfall at $600 million.”
However, some of the deficit may be offset by unspent appropriations, known as revertments. Because enrollment levels for the Department of Education and the Arizona Health Care Cost Containment System were less than projected, JLBC says the expected $113 million in revertments for fiscal 2007 could be as high as $216 million. That amounts to an additional $103 million could be used to cover a portion of the $226 million shortfall for fiscal 2007.
Last month, Gov. Janet Napolitano proposed a three-pronged approach of cutting spending, borrowing for capital projects and dipping into the state’s emergency fund to address the deficit. House Republican lawmakers also met to discuss the financial situation and took the first steps toward developing their own plan.
House Majority Leader Tom Boone, R-4, said the meetings were “very productive.” He also said Republican leaders would reach out to Democrat lawmakers to help solve the deficit.
“It has to be a bipartisan solution to the problem,” he said.
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