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GOP would use rainy-day fund to balance AZ budget
Ignoring a possible veto, Senate Republicans began adopting plans Tuesday to balance this year's budget largely by virtually draining the state's rainy-day fund and forcing most state agencies to cut spending by 2.5 percent.
The measures adopted by the Senate Appropriations Committee slash spending by just $212 million to make up a gap of more than $1.1 billion between revenue this year and the adopted $10.6 billion budget. Some of the rest of the difference would be made up by taking money from other special funds.
They also bar the state from issuing contracts for new school construction through June 2009. But the keystone is withdrawing $615 million from that rainy-day fund, leaving just $70 million to deal with next year's anticipated deficit, which could approach $2 billion. By contrast, Gov. Janet Napolitano wants to take out only about $230 million.
Sen. Bob Burns, R-Peoria, who chairs the Senate Appropriations Committee, conceded virtually draining the rainy-day fund is not a responsible move.
"It's the only move," he said, what with the state nearly two-thirds of the way through the current budget year. "We need to get something done."
Burns said draining the fund will force the governor and Democrats to acknowledge expenditures continue to outstrip revenue. And once the savings account is all but gone, he said, it will force them to agree to trim state spending.
Burns said cuts are long overdue.
"You've got cities and counties doing layoffs," he said, something that Napolitano has so far refused to implement. George Cunningham, the governor's chief financial aide, said last week Napolitano does not believe a hiring freeze is necessary.
"Sometimes you have to do things that are not pleasant," Burns said. "It boggles my mind we don't have some sort of dramatic correction plan in place."
Napolitano's plan relies heavily on borrowing for new school construction to balance the budget, something Burns said most Republicans do not find acceptable.
"The borrowing thing adds to the cost of state government and it doesn't solve the problem," he said.
Burns said those who want to keep spending, even as tax collections are not keeping pace with revenues, should have the courage to propose a tax hike to make up the difference.
Napolitano said that's unnecessary, what with her plans to borrow, defer payments and collect some bills earlier. The governor has remained adamant against deep cuts.
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