State Budget Brief

On June 4th and then again on June 30th, the Arizona State Senate and House of Representatives passed a balanced budget that makes positivedebbieinofficesmall1 steps to solve the state’s current and future budget problems without implementing a tax increase that may further hurt an already fragile economy.

One of the key differences between the June 4th and June 30th approved budgets, the Governor’s proposal, and the democrat’s proposal is a tax increase. (Please click on the link to the left entitled, Budget Explanation, for more details.) The plan approved by republican legislators on June 4th and June 30th does not include a tax increase. The Governor’s proposal includes a $1 Billion/year sales tax increase and a $164 Million property tax increase for 2010. The democrat’s proposal includes $1.2 Billion/year increase in sales tax and a $1 Billion/year property tax increase.

Another key difference in the proposed budget plans is the amount of spending cuts. Since 2004, the state has increased spending by $3.7 billion. Our state is now $3 billion short. The more we reduce spending now, the easier it will be to balance the budget in the future. Without making cuts, economic models show that the gap between spending and revenue will just continue to increase each and every year through at least 2012.

The budget passed by the republican legislators on June 4th and June 30th cuts spending by $631 Million in 2010. In comparison, the Governor’s proposed plan cuts $278 Million and the democrat’s plan cuts $78 Million.

In the June 4th plan; no major agency was cut more than 3.3% as a percentage of their total funds. As an example, Kindergarten-12th grade education was cut by 2.2% of their total funds. Although difficult, these modest cuts will allow school districts to rehire many of the teachers they had let go.

I hope that I have at least shed some light on what is happening down here at the legislature. I know some of you will not agree with me on every issue, but I am confident that we agree on many more issues than we disagree on. I truly believe that we can solve this problem if we continue to work together.

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