Legislators Tackle Budget Issues In Special Session

By Tammy Gray-Searles
   A special session of the legislature called by Governor Jan Brewer to begin Nov. 17 to solve the state’s budget crisis has state and local officials waiting anxiously to learn what cuts might affect their budgets.
   It is anticipated that unless drastic changes are made to the current proposal, the cuts will include $144 million from K-12 education, $155 million from the Department of Economic Security and $160 million from the state’s general fund.
   Navajo County Manager Jimmy Jayne has expressed concern that some of the proposed cuts to the gen-eral fund aren’t really cuts, but merely a shift in financial responsibility for state services to the counties. Regardless of whether costs are shifted to counties or state services are simply reduced, the effects will eventually be felt by all Arizona residents.
   A recent study by the Alliance for Excellent Education noted that if only half of the high school drop-outs in the Phoenix and Mesa area received their diploma, state and local tax revenues could be expected to increase by $7 million per year. Even before budget cuts, Arizona ranked almost last among the 50 states in educational spending.
   The alliance dubbed the schools in which less than 60 percent of freshmen graduate on time “drop-out factories.
   “In these lean economic times, local businesses and governments are looking for any way they can to improve their financial situation,” said former West Virginia governor and Alliance President Bob Wise. “These numbers demonstrate clearly that every consumer, business, and taxpayer benefits dramatically when we do what it takes to increase the number of students who graduate from high school with the skills they need to succeed in life. Indeed, the best economic stimulus is a high school diploma.”
   The state deficit pinch is already being felt in other areas as well. Navajo County Finance Director James Menlove pointed out that many special districts have found it necessary to increase property tax rates as a result of reduced funding from the state. Even though the legislature refused to consider the governor’s tax increase proposal, many residents have essentially experienced a tax rate increase through higher prop-erty taxes.
   Cuts to state funds that have already impacted local schools and cities could be felt even deeper. The cities of Holbrook and Winslow, along with Navajo County and other cities and counties across the state, have already seen reductions in available Highway User Revenue Funds (HURF) dedicated to road repairs and transportation projects. The Holbrook School District Governing Board recently learned that many grant funds the district relies on for supplies and special programs have already been cut and further reduc-tions are anticipated.
   While the governor has made it clear that the 15-percent budget reduction plans she requested from each state agency are not part of any current proposal, it is also clear that cuts must be made somewhere to resolve the deficit.
   State Treasurer Dean Martin stated Tuesday that the state can no longer borrow from its own special funds and will likely need a loan in order to meet immediate financial obligations.
   In the current special session, which is the fourth for this legislature, lawmakers are expected to tackle only about one-fourth of the deficit, leaving state and local administrators still wondering how to best man-age their budgets to absorb the additional cuts that are likely.