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Budget deficit now estimated at $2 billion

Legislative budget analysts said tax collections in the first quarter of the fiscal year have been so sluggish that they have revised revenue projections downward. Now, the deficit for fiscal 2010 is $2 billion.

In order for the state to collect the $7.1 billion it anticipated this year, revenues would have to grow by nearly 1 percent from the prior year. However, collections are down 16 percent after the first three months.

A group of financial advisers told lawmakers this morning that they believe revenues will decline 7.2 percent in fiscal 2010, but the Joint Legislative Budget Committee said it recommends using its more pessimistic forecast of an 8.7 percent drop in collections.

Last month, JLBC estimated the state was facing a $1.5 billion deficit this year. However, with the new revenue predictions, that number has climbed to just shy of $2 billion.

Revenue shortfalls account for $700 million of that estimate. It also includes nearly $480 million in deficit from the previous year, $483 million in spending created by Gov. Jan Brewer’s budget vetoes in September and $135 million in increased caseloads on public health care.

It also includes revising estimates of cost-saving measures in the budget, such as reducing fraud in the public health care system and selling state assets, to be $165 million less than originally anticipated.


  1. How do we eliminate the voter passed propositions that hamper dealing with the budget deficit because some things (like education 2% annual increase) is off the table? Equal hurt seems to be appropriate now.

  2. I would like to see a copy of the budget posted on line by department. I have been all over the web site and it is not there.

    I would suggest that any and all cuts be driven by those with boots on the ground. The front line employees know where the money gets spent and how it is abused. I would suggest that a “percentage of savings incentive” be offered to all employees. The mantra in State budget process is that if you give “it” up this year you won’t get it next year whether you really need “it” or not.

    Having said that, the amount of money that will be collected will naturally be reduced significantly because of the massive foreclosures, decrease in the housing market, loss of jobs and high numbers of illegals still draining the system. Forget voter mandates—start with unfunded Federal mandates like “NO child left behind”, extension of unemployment, even the “stimulus funds” come with spending requirements just to get the money.

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