A couple of weeks ago, I argued that the state Legislature needed to convene a special session to deal with the cratering state budget.
Gov. Jan Brewer and legislative leaders have since agreed to a special session, which may convene as soon as this week.
But now after poring over reports from the Joint Legislative Budget Committee the governor’s budget office and the reports from state agencies requested by the governor last month detailing how they would cut up to 15 percent of their budgets, it’s clear the special session I considered vital may well be a waste of time.
The budget can’t be fixed.
At least not without changes to federal law and voter-approved changes to state law, neither of which are going to happen before the end of the fiscal year June 30.
Arizona is spending $10.1 billion this fiscal year but will only take in an estimated $6.4 billion in revenue.
Part of that gap is covered by $1.1 billion in federal stimulus money, leaving a funding hole of about $2.6 billion. But the Legislature this year failed to solve last fiscal year’s funding shortfall, and so this year’s budget includes $480 million from last year, bringing the total shortfall to about $3 billion.
The state plans to raid about $230 million from other governments in the state and hopes to garner about $750 million through the sale of state buildings, which is a dubious proposition considering about two dozen other states are trying to sell off public assets to solve their own budget crises but most have found few buyers so far. So, depending on those sales, the shortfall may only be $2 billion.
Passing a tax to cover the shortfall won’t work. First, you’ll never get a tax through the Arizona Legislature because the state constitution requires 75 percent of legislators approve any tax increase and there are too many anti-tax zealots under the Capitol dome for that to happen.
More over, there are not enough months left in the year in which to collect the tax for it to do any good. A new tax would only help in the devastating budget years to come.
So that leaves cutting spending. Were it only that easy.
Roughly $4 billion will be spent on K-12 education, about $1.3 billion for universities and community colleges, $1 billion for prisons and about $700 million on the poor. Then there’s the $2 billion for Medicaid and the state Health Department and about $1 billion for everything else.
What can you cut? Almost all of the health spending is protected by federal and voter mandates. Prisons can’t be closed because of separation of powers and mandated sentencing laws. And because the state took federal stimulus money for education, it can’t cut education funding because the stimulus came with a stipulation that the state must maintain education funding at 2008 levels. The only way to significantly cut education spending is to give back the stimulus money. Plus, even it did, a huge chunk of education spending is still protected by voter mandates.
That leaves the Department of Economic Security – food stamps, child welfare and the like - and state agencies such as parks, environmental quality and mines and regulatory bodies such as the boards of cosmetology and acupuncture.
But all of those agencies combined account for only $2 billion (and include things you can’t cut, like the Legislature. More’s the pity).
So the only way to close the budget gap through spending cuts is to eliminate all of state government save education, prisons and health care. That will never happen.
The budget is unfixable. The special session, therefore, is likely an effort in futility.
Our only hope is a state constitutional convention that overhauls the state budgeting process and creates more stable revenue streams.
Either that or we wait for the state government to collapse and try to build a more reasonable one out of the ruins.
Neither option balances this year’s budget, though.