No school groundbreaking through June. Cut most state agencies, including the universities, 10 percent. Take $100 million from the state highway fund to pay for patrol officers.
These are among $630 million in spending cuts that the Republican budget chairmen in the Legislature proposed Friday to close the state’s budget gap.
The plan by Sen. Bob Burns, R- Peoria, and Rep. Russell Pearce, R-Mesa, is a starting point for budget talks that begin Tuesday. It comes on the heels of Democratic Gov. Janet Napolitano’s budget-cutting proposal and offers a study in contrasts.
On Thursday, the governor outlined a plan that includes $214 million in spending cuts, coupled with $393 million in borrowing for school construction and a $263 million withdrawal from the state’s "rainy day fund."
In comparison, the "options" plan released Friday by the budget chairmen has triple the amount of spending cuts as proposed by the governor. It also taps $350 million from the rainy-day fund.
The reason for the slashing-
An economy buffeted by the housing slowdown has had a ripple effect on state budgets nationwide, as well as through many levels of local government.
"The revenue drop-off was greater than we thought," Burns said, referring to last spring, when lawmakers were crafting the current $10.6 billion budget. "We should have been much more conservative in our estimates."
Warning signs started popping up before the ink was dry on the budget. But state officials kept hoping for rosier revenue numbers through the summer, even as sales-tax and income-tax collections continued to lag.
Warning signs were popping up before that, but delusion and denial have been epidemic since the housing boom began.
The budget fight will undoubtedly be ugly, and the solution will satisfy no one. It’s too bad the state, like the federal government and Wall Street, didn’t bother to read the signs.
Northern Virginia Housing Bubble Fallout
Ohio Fraudclosure
Bubble Meter
UK House Bubble
Mish's Global Economic Analysis
Breaking News Relevant Articles© Copyright 2012 Housing Doom | Copyright© 2011, AuthentiCraft, Inc.
Yes, this recession will purge even the government of its excesses.
Over a year ago in Sacramento county in California, the comptroller was quoted as saying the budget was about to have its ‘biggest decline in 40 years”.
Of course, it’s always different in Maricopa county. That’s how you can get away with publically funding those damned public welfare stadiums.
It’ll be interesting to see where they decide to ‘cut back’. It’ll be interesting to see which bonds they’ll default on…. that one will be pretty common, too.
I’ve always wanted to see the government do with less, like the rest of us have to during tough times.
Raise taxes, I dare ya!!
Yossarian,
I agree with you 100% against the public funding of stadiums (the only jobs it creates is a couple of jobs for billionares, a few more for millionares and more minimum seasonal wage earners). I happen to know (from people directly involved in tax revenue) that the IKEA in Tempe generates more revenue than the stadium would have. My ex father-in-law was all for the stadium tax (right-winged repulican).
Many Arizona cities have been on a spending spree for several years. When I read some of the city budget plans for municipal buildings in Surprise three years ago, I said, “Why not slow down?” Sure, they can have a new police facility, city court/administration building, and city hall, but their plans (at least for the last two) were just extravagant.
I guess that with sales tax revenue dropping (and probably staying low) for the foreseeable future while house “equity” (and some owners) are disappearing, then cities will have to do some major spending cuts.
Or they can take a cue from Peoria and institute a new revenue enhancement (er…safety) program.
http://www.azcentral.com/news/articles/1228gl-peoredlight0103-ON.html
Russ-
My son always likes to quote studies that show that if you want to improve safety at these intersections, you increase the length of the yellow lights. The cameras are all about revenue.
You know, I spent my elementary school years in Tempe, which was a way different place then. Parks were simpler with fewer amenities, we didn’t have landscaped medians everywhere. The budget had to be a lot less than it is today, even adjusting for relative size and inflation. It was still a nice place to live. Higher “home values” and sales taxes meant more revenue, and cities [and the state] have spent accordingly.
We may find that cutting back isn’t a tragedy after all.
That’s really the solution to this whole mess… A drastic reduction in the overall standard of living for America until we earn it back.
Imagine if we invent an alternative fuel that costs 1/2 the price of oil and we are the only ones that produce it?
Innovation that creates a massive amount of jobs and income is the only solution, well that and no more loans to people on death row..
Same story in Nevada. Tax revenue way down. Government (school teachers, police and firemen) is in a tizzy. They can’t conceive of not having and endless stream of money. They are talking a 7% cut and act like they are bleeding to death. That would be a very modest expectation in the business world. Of course they will cut things like school buses for handicapped children while they waste money like drunken sailors.