Work on the fiscal 2009 budget appears far from over.

Even though lawmakers closed a $1.6 billion budget gap late last month, state revenues continue to slide and it's possible not all of the money targeted for balancing the budget deficit will be available.

On Feb. 12, Joint Legislative Budget Committee Director Richard Stavneak told legislators on the House and Senate Appropriations committees that January revenue totals were 21.5 percent below last year.

That decrease, combined with a Supreme Court decision preventing the state from taking $30 million from cities and counties, eats up nearly the entire $105 million buffer that was built into the budget fix.

"We're just barely hanging on by our fingertips right now," said Rep. John Kavanagh, a Republican who is chairman of the House Appropriations committee.

On Jan. 31, the Legislature approved a plan to bridge a $1.6 billion gap in the state budget. In addition to cuts and fund sweeps totaling nearly $1.2 billion, the plan also anticipated $500 million in aid from the federal government.

Republican leaders are looking at their options should they have to once again revise the fiscal 2009 budget, Kavanagh said, noting that "it may very well be possible" that lawmakers will have to make further cuts to state programs to keep the budget balanced.

"The January revenues are significantly worse than expected," Stavneak said, noting that it may require a rethinking of revenue estimates for the rest of the year.

Year-to-date, state revenues are down 12 percent. If collections continue at that level, there will be an additional $250 million shortfall in fiscal 2009; if the decline increases to 14 percent, the shortfall could grow to $425 million.

The chance to reexamine the budget will be welcomed by legislative Democrats.

"I hope we come back and address (the budget), because we've got some stimulus money that needs to be spent to replenish some of the deep cuts that were made," said House Assistant Minority Leader Kyrsten Sinema.

On Feb. 11, U.S. House and Senate leaders announced they had reached an agreement on a $790 billion economic stimulus plan and expect to vote on it by Feb. 13. No vote had been taken place as of press time.

Some of that money will be doled out to states to help them cope with budget deficits, and Democrats say Arizona will receive about $1 billion for fiscal 2009 and as much as $2.6 billion for fiscal 2010, which begins July 1.

Sinema said Democrats will fight to use that money to restore funding that recently had been cut and prevent additional program reductions in the upcoming year.

"Our concern…is that we send our tax dollars to Washington D.C. and our congressional delegation has been fighting hard – without the assistance of Republican leadership or the governor – to get our fair share back," she said. "So, when we get this money back, we'd better spend it in the way that it was intended. If we don't, our tax dollars are going to go to California to help them."