Arizona legislators report to work early

PHOENIX—Arizona legislators are about to begin what could be a wild and politically painful ride as they try to dig the state out of a fiscal hole.

Key lawmakers are reporting early this year because the slumping economy has cut state revenue precipitously, leaving coffers short of cash needed to pay for spending in the current state budget.

The 2008 regular session doesn’t start until Jan. 14, but the House and Senate Appropriations committees start three days of joint meetings on Tuesday focused on ways to erase the revenue shortfall. The committees also will begin work on the next state budget on an accelerated schedule.

But early probably doesn’t mean easy at a time when economists say a recovery probably is at least a year away. That spells trouble for the next budget or two.

In the meantime, lawmakers have some tough choices to make. Some of the budget-balancing options could be politically troubling. Others may be easier to swallow but won’t provide enough savings, especially in the long term.

Legislative budget aides estimate the current $10.6 billion budget’s shortfall at $970 million, while Gov. Janet Napolitano puts it at $870 million. A lot of spending is legally off-limits from cuts, and the fiscal year is already half over, making it hard to find big savings in agencies’ ongoing operations.

And while some proposals by Napolitano and others would be relatively painless, at least in the short term, they’re also controversial among some lawmakers who regard them as ignoring an underlying imbalance between revenue and spending.

Along with spending cuts proposed Friday for most state agencies by two Republican committee chairmen, budget-balancing options include borrowing for school construction, draining the state’s rainy day reserve, raiding special-purpose funds, delaying a monthly school aid payment into the next fiscal year, using gas-tax dollars to pay for Highway Patrol operations and rolling back spending increases, especially for one-time or startup projects.

Among the many programs or government spending that could be targeted for cuts or deferrals are expansion of a new biomedical campus in Phoenix, grants for private college students, lake improvement projects and use of out-of-state prisons.

Advocacy groups are already trying to pull lawmakers in opposite directions on the budget.

Tom Jenney, executive director of the Arizona Federation of Taxpayers, said lawmakers should roll back spending to last year’s levels instead of resorting to “gimmicks” that paper over the problem.

“It’s just a question of whether we have the political will to shave off a little bit,” Jenney said. “I’m afraid they are going to cut corners.”

Dana Naimark, Children’s Action Alliance president, said budget cuts are needed. “But what we’re saying is we really need to have to be talking about kids and families — not only how the numbers add up but what is the impact of that.”

It’s unclear whether advocates such as Jenney and Naimark will be heard during the upcoming budget meetings.