State spending faster than revenue coming in - East Valley Tribune: News

State spending faster than revenue coming in

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Posted: Tuesday, August 18, 2009 8:09 pm | Updated: 2:47 am, Sat Oct 8, 2011.

State agencies are spending money faster than ever despite the lack of money coming into the treasury.

Treasurer Dean Martin said that, as of this week, Arizona has spent $100 million more in the fiscal year that began July 1 than it did the same time last year.

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At the same time, though, the Joint Legislative Budget Committee is figuring that actual tax collections since July 1 are less than this time a year ago. Richard Stavneak, the committee’s staff director, said Tuesday he does not yet have exact numbers.

He did say that the pace of loss of revenues appears to be slowing. That’s good news: Last year’s collections for the first month of the budget year were $638.8 million. And that figure was $50.2 million less than the year before.

The news of the pace of spending annoyed Sen. Ron Gould, R-Lake Havasu City.

“Let me remind you, the governor has the ability to reduce spending,” he told colleagues during a floor speech.

The budget now in effect does permit agencies to spend at the rate they are now. That’s because Brewer allowed parts of the budget to become law while vetoing some of the spending cuts lawmakers had approved.

Despite that, Gould said Brewer is not powerless.

“She can tell her agency heads to reduce spending,” he said. “It’s egregious that she hasn’t done that.”

Gubernatorial press aide Paul Senseman said Brewer has directed agencies to reduce spending. He said there are fewer employees on the state payroll and others are being required to take unpaid time off.

He said the reason spending is so much higher this year than last relates directly to the economy: More people without jobs means more families qualify for free care through the Arizona Health Care Cost Containment System.

Three years ago, AHCCCS enrollment was slightly more than 1 million. By the beginning of this month, that had grown more than 25 percent to slightly more than 1.3 million.

“And there’s very little the executive branch or the Legislature combined can do about that,” Senseman said, what with a voter-approved initiative requiring the state to provide free care to everyone below the federal poverty level, about $18,310 a year for a family of three.

Senseman also said the governor cannot unilaterally reduce state aid to schools, which are funded on a per-student basis. More students, he said, automatically means more funding.

Finally, Senseman said prison population is up.

Senseman said those three areas make up two-thirds of the state budget, which doesn’t leave a lot of room to make up the difference from other agencies.

Whatever the reason, Senseman acknowledged the level of state spending cannot be sustained with the tax collections, “which is exactly why the governor has advocated so vociferously for additional revenues.”

That, specifically, is Brewer’s plan to ask voters to put a one penny surcharge on sales taxes for 2010 and 2011 and a half-cent increase for 2012, a move that could raise a total of $2.5 billion over the three-year period. So far, though, Brewer has been unable to get the necessary votes in the Senate to put the issue on the ballot.

There is no guarantee, though, that voters would approve the tax hike even if it gets on the ballot. Senseman said that’s why Brewer has directed agencies to spend less.

He denied that the $100 million in increased spending shows that whatever the governor is doing hasn’t worked. He said it comes back to the mandated spending on health care and education, saying funding for those two agencies alone will be $900 million more than last budget year.

And that, he said, doesn’t include caseload growth in the Department of Economic Security or the Department of Corrections.

Senseman said, though, Brewer believes that, even if the sales tax referral gets on the ballot and is approved, there will need to be further spending cuts.

The budget lawmakers approved in June — the one Brewer vetoed parts of — also includes other tactics to bring the budget into balance. That includes both short- and long-term borrowing, the latter to be accomplished by selling off state buildings for cash and then leasing them back.

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