Arizona Capitol Times Your Inside Source for Arizona Government, Politics and Business

The feds gave Arizona a $2.8 billion crutch to help the state limp through three difficult budget years. But after two years, nearly all of the stimulus money has been spent and the state remains crippled by the recession.

A disagreement between the Senate and the House over the timing of a bill aimed at lowering business taxes and creating jobs derailed one of the six measures the Legislature crafted during the special session.

Everything seemed to be going smoothly at first. The Senate passed all six budget bills Feb. 2 with support from both Republicans and Democrats.

The Senate sent a committee to the House to signal it was ready to end the special session sine die on Feb. 10, without taking action on a House-amended version of the remaining special session budget bill, S1002.

The fate of a bill that would delay payments to schools and universities as a deficit-closing gimmick is in question after the House of Representatives amended the measure, linking its enactment to a jobs creation and business tax cut bill that is stalled in the Senate.

Voters approved a constitutional amendment in 2004 to require a dedicated funding stream for voter-approved programs. Now lawmakers want the same requirement at the municipal level.

The House today narrowly approved a bill that would close about half of the current year's budget deficit through borrowing.

So far, lawmakers and the Governor's Office have avoided conjuring the greatest fear of local governments - changing the formula that determines who gets what from the collective pot of money they all share.

The House Feb. 8 approved two more measures aimed at filling in a $1.4 billion deficit this year and paving the way to bridge a substantially larger shortfall in the upcoming year, but two more bills still await action.

Local government is usually the last place the Legislature looks to find extra money, but the state budget deficit has forced lawmakers to take desperate steps. This year and last, cities and counties have been forced to pay bills that historically have been the state's responsibility. During the past year, lawmakers have taken money that was intended to pay for local services, limited cities' ability to collect fees, and hoisted new burdens onto the shoulders of city officials who are trying to overcome the same economic conditions that ravaged two consecutive state budgets.

It took nearly a year, but lawmakers finally gave Gov. Jan Brewer the special election for a temporary sales tax increase she had been calling for since last March.