The East Valley’s wish list for state money will have to get shorter this year. Threats of a nationwide recession, coupled with less money coming into state coffers, have created financial obstacles for East Valley lawmakers wanting to bring projects back to their districts.
It marks a sharp difference from last year when the state was swimming in a $1 billion budget surplus.
With that kind of cash, lawmakers were able to pay teacher and state employee pay raises, slash taxes and sock away some money in the so-called rainy-day fund.
And for the East Valley, lawmakers successfully bargained for the expansion of Arizona State University Polytechnic’s campus in Mesa — a move that many have hailed as an economic powerhouse for the region.
But times have changed. So as senators sat down last week to begin the arduous task of forging a budget, legislators are finding they will have to lower their expectations.
“We’re just now getting to the point where we’re addressing the wish lists of our members and if you have to borrow money to pay for it, I’m not sure you’re going to get,” said Senate Majority Whip John Huppenthal, R-Chandler.
The Senate canceled most of its committee hearings last week to begin crafting a budget.
Lawmakers made their way through most of the state agencies’ budget proposals, but have yet to begin examining larger issues such as education and transportation funding, which are often the subject of intense debate.
The latest financial predictions by the Joint Legislative Budget Committee estimate the state will have a $45 million surplus. That means some bigticket items — such as Arizona State University’s proposal to erect a new, $40-million building for its Del E. Webb School of Construction in Tempe, which ASU officials say would help accommodate more students and faculty in the growing program.
By the end of last month, the university had raised more than $10 million from industry and private donors. However, the school is asking for a $20 million match from the Legislature.
Specifically, ASU officials are seeking $1.5 million as a down payment on the $20 million that would go toward construction. Private interests have pledged an additional $10 million.
“We hope the Legislature would view this as something important and put it in the budget,” said Steve Miller, an ASU spokesman.
He and other construction school supporters argue it would help fill a demand for skilled construction jobs as the state continues to lead the country in growth.
Gov. Janet Napolitano’s budget proposal includes money for the school. However, her economic team has taken a rosier outlook on the surplus. Instead of the $45 million forecast by the Legislature, her staff predicts more than four times that — $219 million — will be left over.
Differences over how to carve up this pie likely will complicate negotiations later if the Legislature and the governor’s office can’t agree on the size of the surplus.
However, when it comes to the legislative sweepstakes, Queen Creek could come out the big winner this year as transportation has taken on the top priority of lawmakers.
Rep. Andy Biggs, R-Gilbert, chairman of the House Transportation Committee, has put forward two measures to help relieve traffic in the southeast Valley community.
One would free up $20 million in state money to build local roads in towns that have exceeded a 50 percent growth rate. The other would allow booming communities, such as Queen Creek, to apply for additional loans to build arterial streets.
Formerly a quiet farm town, Queen Creek suffers from massive gridlock that threatens to stifle its economic growth.
“This would give us more tools to work with,” said Mark Young, a Queen Creek spokesman.
And the town appears to have an unlikely ally in Rep. Russell Pearce, R-Mesa.
Pearce, who heads the powerful House Appropriations Committee, has never been a supporter of increased spending — except for public safety and immigration enforcement.
But last week, he said he would do what he could to ensure Queen Creek got money to fix its traffic woes.
“I won’t fall on my sword for spending, but those areas need some help because they’re growing so fast,” he said.
But overall, it looks as though East Valley communities will have to scrap for what they can get. Adding to the budget talks was a mixed economic projection by the Financial Advisory Committee.
The group is comprised of economists and business community members from across the state who have cautioned the state would continue to grow economically — but nowhere near the rapid pace of recent years.
Marshall Vest, a University of Arizona economist, has told lawmakers and policy advisers the housing industry statewide is in a recession, retail sales remain flat, and the job market is slowing.
Nationally, the news hasn’t been any better. With the slumping housing market and slower consumer spending, Scottsdale economist Elliott Pollack said there is a 25 percent chance of a recession similar to 2002’s.
However, there was some positive news for the state. Although the economy is slackening, Arizona will still see some growth and should perform better than the national average.
Despite that, East Valley lawmakers said they remain hesitant to commit to any longterm spending.
“I think we have to be very selective on what type of debt we decide to take on,” said Rep. Bob Robson, R-Chandler.