Brewer signs budget with $580M in cuts

Gov. Jan Brewer signed legislation Saturday to fix the current budget, paving the way for lawmakers to start dealing with an even bigger deficit expected next year.

Tight budget may close 5 state parks

$1.1B in cuts heads to state House, Senate

Gubernatorial press aide Paul Senseman said Brewer, who has been governor for less than two weeks, recognizes the hardship that the $580 million in spending cuts will create. Hardest hit is education, with a $142 million hit to the university system, $9 million taken from community colleges and $133 million less in state aid to public schools.

"The governor is very concerned about the effect and impact of this budget," Senseman said. He said, though, the cuts had to be made because of the $1.6 billion deficit in the $9.9billion spending plan, a deficit Senseman said Brewer inherited from former Gov. Janet Napolitano.

"There's been some dramatic expansion of government in the last five years which is unsustainable," he said.

Aside from reducing education funding, the plan requires spending cuts from virtually every state agency, including a 4.2 percent reduction in payroll expenses. But it leaves it up to each department to decide whether to fire employees or force workers to take unpaid time off between now and the end of the fiscal year June 30.

Universities will get to decide on their own how to deal with their share of the cuts.

Arizona State University President Michael Crow already has mandated that all workers take at least 10 days off without pay - 15 for top administrators, including himself - before June 30. But that will save only about $24 million; ASU's share of the cuts is expected to exceed $53 million.

The University of Arizona will have to absorb similar cuts.

UA spokesman Paul Allvin said the initial plan is to eliminate 600 positions, though he said some already are vacant. Allvin said UA President Robert Shelton also will consolidate 16 colleges into 13, though which ones have not yet been decided.

Allvin said that while unpaid furloughs have not been ruled out, Shelton does not think they make sense.

"That helps you for this fiscal year,'' Allvin said of unpaid furloughs. But he said all indications are that the money is not coming back next year and, in fact, the universities may be asked to cut even more.

Northern Arizona University faces about half as much in fund reductions as the other two schools.

Public schools also are expected to come up with their own money-saving plans. The only restriction of sorts is a requirement that cuts in personnel be taken from administration "to the extent possible.''

The package, opposed by every Democrat and a few Republicans, also takes about another $580 million from specially dedicated funds covering everything from cleaning up toxic waste sites to making improvements to lakes in state parks. The balance comes from $500 million lawmakers believe will be the state's share of the bailout package that has been approved by the U.S. House and is awaiting Senate action.

Senate Majority Leader Chuck Gray, R-Mesa, said any heartburn lawmakers had from these cuts could pale in comparison with what they are going to be asked to do next.

"The hard work is just beginning,'' he said, referring to estimates that the deficit for the coming fiscal year could hit $3 billion.

"The mountain's a lot higher to climb,'' said Rep. John Kavanagh, R-Fountain Hills, who chairs the House Appropriations Committee. "But we have no choice.''

And that, he said, is likely to include further cuts to education, which makes up about half the state budget.

Kavanagh said that he and most Republicans are unwilling to consider tax hikes, even temporarily, instead of further spending cuts.

"I'm not going down the tax road until the situation is so dire that there's no other alternative,'' he said. "And I'm not prepared to concede that at this point.''

Kavanagh said that if it comes to the point that additional budget cuts are impractical, he would rather borrow on a short-term basis.

"I think that's more fiscally responsible,'' he said. "If it's short term, then as revenues come back, we will not jump back into excessive spending because we will have to repay the debt.''

Some of next year's gap between revenues and expenses could be bridged with additional stimulus funds. Lawmakers hope to know soon exactly how much Arizona will get and how long the cash will keep coming.

Rep. Andy Biggs, R-Gilbert, said it may make sense not to accept everything the federal government is willing to provide.

He said the funds could come with certain restrictions, such as a requirement to use them to expand eligibility for health care programs. Biggs said that's fine - as long as the cash keeps coming.

"But the programs develop a constituency,'' he said, making it impossible to halt the program once the federal dollars dry up and state taxpayers need to pick up the tab.

It is possible that this year's cuts to education could end up being less. Several Democratic lawmakers claimed during debate early Saturday morning that Arizona's share of federal stimulus aid this fiscal year actually could hit $1 billion. They were unable, however, to convince the Republican majority to plug that number into the budget now, rather than the $500 million, a move that would have reduced the spending cuts.

But Rep. Rich Crandall, R-Mesa, said that if the final federal package does include more cash for Arizona, he will lead the drive to restore some of the state funding for public schools.