Most Arizona Government Jobs Saved Under Budget, But Many Services Cut

Although the majority of Arizona government jobs will be saved under the state's proposed budget, some positions will still be eliminated and citizens will face a cut in many services, as well as a tax increase.

Gov. Jan Brewer recently present her detailed recommendations to balance the state's 2010 and 2011 General Fund budgets to the Arizona State Legislature. The budget proposes that the state make substantial and long-term changes to the way it fulfills its mission to serve Arizona citizens.

Arizona is currently facing a $1.4 billion budget shortfall for this year and a $3.2 billion projected budget shortfall for 2011. Officials hope changes to both years' budgets will help close that gap.

Most importantly, the governor's proposed budget will mitigate massive cuts to education and public safety with significant spending reductions and service eliminations across state government, a temporary revenue increase to bridge the fiscal crisis, and remaining stimulus spending targeted to job creation and public safety.

In an effort to close the budget gap, Brewer recommends:

• Maintaining state support for K-12 education 2006 levels, despite reductions in federal support
• Maintaining university funding at 2006 levels
• Reducing the Arizona Health Care Cost Containment System rolls by 25 percent - or 310,000 people - and eliminating the KidsCare program, which provides health coverage to about 47,000 children
• Reducing services for 17,000 mentally ill adults, which is about half of that population
• Eliminating cash assistance for 10,000 families
• Placing a cap on day care assistance and eliminating services for more than 10,000 children of low-income working parents
• Closing the Department of Juvenile Corrections, transitioning the custody of minors to county detention centers, and laying off an additional 900 state employees
• Reducing state employee pay by 5 percent
• Redirecting Lottery revenue streams

Despite these reductions, the state will still have to borrow and defer $1.5 billion, which pinpoints the necessity of a proposed tax increase.

"In a few short years, this recession has pillaged what took decades to build, and years will pass before we fully undo its devastating effects," Brewer said. "We must continue to display in the months and years ahead the fiscal discipline we demonstrated during calendar year 2009, when together we cut the size and scope of state government and worked to secure a sustainable path. And we must begin the long process of paying down our debt and undoing our fiscal tricks. Once this debris is cleared away, we will be left with a solid foundation for future prosperity.

"The good news is that, together, we can solve this problem," she continued. "Seasoned by the hard work we have performed in the last year, we are better prepared than before – and arguably better prepared than any preceding generation of Arizona’s leaders – to guide our state through this fiscal valley and commit to an Arizona revival equal to the promise of her second century."

The last five years allowed for unprecedented growth for Arizona, with increased revenue streams and lower taxes, which resulted in the lowest tax burden per $1,000 of personal income the state has seen in more than 30 years.

In addition, the state increased services in every area of government, including Medicaid expansion that provided health coverage for hundreds of thousands of people; expansion of the K-12 system to provide state-funded, full-day kindergarten; and support and expansion of the higher education system.

However, Arizona's unemployment rate has more than doubled since the beginning of the recession in December 2007, increasing from 4.3 percent to 8.9 percent. During that time, more than 270,000 residents lost their jobs, and the state saw the next-to-last job growth rate among all 50 states.

State revenues have declined for three consecutive years and are projected to be 34 percent less during 2010 than during 2007. And despite that decrease, Arizona has continued to accommodate enrollment growth in the K-12, community college and university systems, mandated growth in the Medicaid population and continued obligations for public safety and general government services.

During the last year, however, the state has imposed a $1.09 billion spending reduction - the largest in Arizona's history. The state also has eliminated services and programs and reduced the workforce by almost 10 percent.