Dems say budget crunch means state services cuts

The exploding size of the state deficit has Democrats now looking at places to cut back state services - and maybe even lay off workers - something unthinkable even just a few weeks ago.

Governors agenda wanes amid budget crisis

"We're at the point where there are going to be restrictions on services," said Senate Minority Leader Marsha Arzberger, D-Willcox. And she said it will be hard to justify keeping every state employee on the payroll.

"I don't think we can get away from that," she said.

House Minority Leader Phil Lopes, D-Tucson, said he doesn't think that any state agency or service is going to go away - entirely. But things won't be the same. "You can cut back on programs without eliminating them," he said.

Democrats always have conceded some spending cuts are going to be necessary. But the plan proposed for next fiscal year by fellow Democrat Gov. Janet Napolitano includes less than $300 million in actual reductions in spending, making up much of the balance with heavy short- and long-term borrowing.

Since that time, though, the size of the anticipated gap between tax collections and expenditures has ballooned to close to $2.2 billion in a $10.6 billion budget.

And half of that - mostly state aid to education - is constitutionally off-limits to cuts.

Rep. Kyrsten Sinema, D-Phoenix, said she and other lawmakers are making their own lists of what the state does to find "what are the things that are the least harmful to our state."

"I don't have an answer yet," she said. But Sinema said she is not under the illusion that the budget can be balanced simply by moving money around and borrowing.

"I think there are going to have to be programs we're going to have to do without," Sinema said.

The trick, according to Rep. Tom Prezelski, D-Tucson, is knowing how much of a cut each program can sustain.

"You don't want to cripple an agency," he said. " You want to make sure that each agency remains functional so that, when we do have the money, we can restore it."

House Majority Leader Tom Boone, R-Peoria, said Republicans are going through the same exercise in light of the new deficit projections.

"There's going to be a lot more pressure, of course, on reducing spending," he said.

One area of agreement between the two parties is that the easiest place to cut spending is in areas involving buildings versus services for people.

For example, Boone said, the state could defer spending on school building maintenance.

"Those are things that don't affect the classroom directly," he said. "There are things that you can perhaps postpone for a year or two or three without doing."

Prezelski agreed, saying the first cut should come in cutting capital expenses for building construction and renewal.

Where the two parties differ is in how much of that $2.2 billion gap should be made up with temporary fixes.

For example, one possibility is to defer some payments to schools into the following budget year. That technically reduces expenses for the coming fiscal year but makes it a future obligation.

Boone said he's not convinced the economy will get that much better that quickly.

But Lopes said he remains convinced the governor's plan, with its reliance on borrowing, is the better way to go.

"Is it of more benefit to the people of Arizona to do financing of schools or rollover of school payments (to future budget years) than it is to lay people off or not give people health care or not give people child care?" he asked. "Our responsibility isn't to cut, cut, cut. Our responsibility is to manage the situation."

Arzberger said she wants to see exactly what spending cuts the Republicans are proposing, as they hold the majority in the House and Senate, before deciding what she and other Democrats can swallow.