February 8, 2010
Govs Feel the Weight of Wielding Budget Ax
By Daniel C. Vock, Staff Writer
Even for governors sounding the alarm about unbalanced budgets, the act of getting their states back in the black is easier said than done.
Since taking office last year, Arizona Gov. Jan Brewer (R) has criticized accounting gimmicks and borrowing that, she has said, led to the Grand Canyon State's current budget "crisis."
But now Brewer is defending a compromise she struck with state legislators that relies on the same type of budget tricks and borrowing — at least until voters decide whether to approve a temporary sales tax increase, reports The Arizona Daily Star .
Brewer has fought with her fellow Republicans in the GOP-led legislature over the sales tax issue for nearly a year. Now that top lawmakers finally agreed to let voters decide whether to hike the tax, any new revenues would come too late to help the state out in its current budget.
So, in the meantime, the state would borrow $750 million and delay making $450 million worth of payments into the next fiscal year, the Daily Star explains. The Senate approved the plan last week; the House is expected to take it up on Tuesday.
The newspaper says Brewer would have preferred a different approach. The deal she struck with lawmakers, she said, is "not the best way to do business."
In neighboring Nevada, Gov. Jim Gibbons (R) plans to call legislators back to the capitol by the end of the month to deal with an $880 million gap in the current two-year budget. He's expected to make the announcement during his televised state of the state speech Monday night.
For Nevada, the $880 million shortfall would require a 20 percent cut of state government operations if it is approved by March 1, notes the Las Vegas Sun .
Put another way, as The Associated Press explains it: "Nevada's budget is so far out of balance that by one account the state could lay off every worker paid from the general fund and still be $300 million in the red. The economic downturn has hit so hard that prisons may be closed, entire colleges shuttered and thousands left without jobs."
Gibbons' staff has suggested ways to start closing the gap, but all of their proposals would only address about half of the projected deficit, according to the Sun.
The AP says Gibbons' plans would result in the layoffs of 234 state employees. But the layoffs won't save the state as much as many people think, because the state still must pay for unemployment benefits, Gibbons aide Lynn Hettrick told the wire service.
"When we lay somebody off, it doesn't save us very much money," she said. "Between that and taking the money out of the economy, it really doesn't make sense for Nevada to lay off people."
Bigger cuts also would likely anger Nevada teachers and their 28,000-member union, because the state can't cut teacher salaries without reopening its contract with the union, the Nevada Appeal writes. The paper says school superintendents maintain that to make the 20 percent reduction, without pay cuts, they will have to resort to massive layoffs, larger class sizes and maybe even a shorter school year.
The Appeal also reports that Gibbons, who sets the agenda for special sessions, will not allow lawmakers to use the meeting to hike taxes. Last year, the Democratic-controlled legislature overrode Gibbons' vetoes to impose $781 million of tax increases.