With the clock ticking on the state’s ability to correct a $1.2 billion budget deficit, House and Senate panels each approved a spending fix that relies heavily on dipping into cash reserves.
The largest component of the plan is a $615 million withdrawal from the state’s rainy day fund, which leaves about $70 million in the fund for lawmakers to use when they craft a budget for the 2009 fiscal year, which is facing a deficit of nearly $2 billion.
The plan includes $212 million in cuts to state agencies, including a $25 million reduction in university spending, about $37 million less for K-12 education, as well as about $327 million in one-time sweeps from more than 100 funds that have dedicated revenue streams and are generally used to support specific programs or state regulatory boards.
The Senate and House Appropriations committees approved six-bill packages Feb. 19 and 20, respectively.
The proposal, developed by the committees’ chairmen and Republican legislative leaders after a round of meetings with other Republican lawmakers, was not a result of the negotiations that Republican and Democrat leaders have been conducting since before the legislative session began in January.
Those negotiations are expected to continue.
Rep. Russell Pearce, the House Appropriations Committee chairman, said the state needs to act as quickly as possible to address a deficit that lawmakers have known about since July. He cautioned that, if changes aren’t made, the state will run out of money in May.
“Either we make some tough decisions now or everything shuts down,” he said.
And Rep. Trish Groe, a Lake Havasu City Republican and vice chair of the committee, said the budget proposal should serve as a “wake-up call” for lawmakers and the governor.
“Actions have consequences and you do reap what you sow,” she said. “What we’re facing right now is the consequences of growing government irresponsibly.”
But Democratic Rep. Pete Rios said the 2.5-percent cut to the budgets of state agencies does unnecessary harm to programs used by thousands of Arizonans each day.
“We’re going to be causing a lot of pain, a lot of grief, to a lot of programs that are near and dear to the people of Arizona,” he said.
And Tucson Democrat Paula Aboud said she couldn’t support a budget plan that wasn’t a product of the negotiations.
“With all due respect, I want to vote for a budget that has support from both sides of the aisle,” she said.
Another budget-related measure was approved by the House Feb. 20, when representatives voted, 40-15, to institute a hiring freeze for state agencies.
A day later, and after previously saying such a move was unwarranted, Gov. Janet Napolitano announced she was establishing a hiring freeze and asking agency directors under her purview not to hire new workers.
Napolitano instructed state agency heads to forgo hiring many of the employees authorized by the fiscal year 2008 budget, calling it a “prudent” move to halt hiring non-essential positions at a time when the state faces a $1.2 billion deficit,
“Tightening our belt is a critical part of how we will manage through our current budget deficit,” she said in a prepared statement. “When revenues decline, it’s common sense to target areas where you can spend less.”
The same day the House voted on the hiring freeze, Napolitano had said in a press briefing she did not believe there was any need to halt hiring new employees because she had informally told agency directors to hire fewer employees.
“I’m waiting to see some of the things and we’re having some discussion with legislators now, but we’re taking our own internal actions with respect to that and, as you know, beginning months ago, I instructed agencies to, in essence, slow hiring and take into account what they absolutely need to do that’s mission critical,” she said.
Rep. Bob Robson, the Chandler Republican who sponsored the legislative push for the hiring freeze, said he was “elated” the governor saw the need to curb state employment.
“Maybe our actions…helped move it forward,” he said.
But Senate Appropriations Chairman Bob Burns, R-9, said Napolitano’s actions are “way too little, way too late.” The hiring freeze should have been implemented in August or September of last year, he said.
“It just stops the growth of government. It doesn’t actually save any money,” the Peoria Republican said.
However, Senate Minority Leader Marsha Arzberger said a hiring freeze of sorts has already been in place since September, when Napolitano asked the agency directors to be more judicious in their hirings.
“We had looked at some numbers earlier than that, remembering that she had put out a letter to agencies in September telling them to hold all vacancy positions open, and various other things. We actually looked at the numbers and it looks like an essential hiring freeze has pretty much been in place since September,” Arzberger said. ?