Saying the economy is not getting better, Gov. Jan Brewer has directed all state agencies to prepare to cut spending up to 20 percent, above and beyond the budget reductions just imposed.
Eileen Klein, Brewer's chief budget officer, said Tuesday the governor wants each department chief to list which programs or services they would be most willing to surrender. All that, Klein said, should be put into priorities involving cuts of 5, 10, 15 and 20 percent to let the governor - and the Legislature - decide what can be eliminated.
The move comes on the heels of about $580 million in spending cuts approved by lawmakers at the end of last month to bridge a $1.6 billion deficit. The balance was made up with cash taken from various special funds and an anticipated $500 million in federal stimulus dollars.
"Unfortunately, permanent spending commitments based on faulty or temporary revenues and a bleak economic outlook suggest more difficult times ahead for Arizona," Klein wrote. Various estimates put the gap next year between revenue and expenses at anywhere from $2.4 billion to more than $3 billion, even after that $580 million in cuts.
But gubernatorial press aide Paul Senseman said the request doesn't mean Brewer intends to make up that entire gap with cuts. He said the governor remains open to "all options."
He said, though, Brewer would not look favorably at "one-time dollars being utilized for ongoing spending initiatives." That could limit the use of accounting gimmicks, such as pushing expenses off into future budget years as well as borrowing against future revenue to get cash to run the state now.
Those objections could preclude the proposals trotted out Tuesday by Senate Democrats.
Their plan, unveiled within hours of Brewer's request, includes not a single penny of cuts beyond the $580 million taken from the budget already.
Instead, it involves $500 million in long-term borrowing. There also are various accounting maneuvers, including deferring payment of $167 million in bills owed to health care and social service providers, delaying $75 million in state aid to universities and requiring more businesses to pay sales taxes in June - the last month of the fiscal year - that otherwise would not be due until the following budget year.
It also involves reinstating the state property tax, which was suspended in 2006 for three years, generating close to another $250 million, as well as $250 million to be generated in new revenue by suspending virtually all tax credits now available to individuals and businesses, ranging from donations to public and private schools to credits to encourage the purchase of energy-saving products.
Rebecca Rios, D-Apache Junction, the No. 2 ranking Senate Democrat, said there is a good reason for the decision not to agree to further cuts.
"It's a question that's well-directed at many of the faces of the people we've seen here recently: Parents that are going to go without day care, seniors that are going to go without food, children that are going to go without abuse investigations," she said.
But Rep. Kyrsten Sinema, D-Phoenix, Rios' Democratic counterpart in the House, said she could not agree there is nowhere else to cut in the budget.
Sinema noted that the Republican-controlled Legislature told agency chiefs how much to cut and pretty much left it up to each one to decide where to slash. She said that led to bad decisions, like cutting funding for a program that screens newborns for congenital diseases and defects while leaving money in the budget to test water in Lake Havasu.
How much of a look the public will get at the various proposals by agency chiefs is up in the air.
Senseman promised "transparency" in how Brewer prepares her budget. But he declined to guarantee that the public will get a look at what the department heads suggest.
"We'll see what the submissions are to the governor's office and make a decision at that point," he said.