2015 Legislature Faces Familiar Budget Issues

When the Legislature wrapped up its work last summer, members knew when they returned in 2015 they would face some difficult budget issues.
At the time, the projected deficit for the 2015 budget year was in the hundreds of millions of dollars. That projection has grown, with the red ink an expected $1 billion in the budget year starting in July.
Arizona’s Constitution requires that the budget to be balanced each year, and the first go at it will come from Gov. Doug Ducey.
Last week, in his inaugural address, Ducey promised a balanced budget with new or increased taxes not an option. But he was short on details.
That may change Monday when Ducey gives his first State of the State address to a joint session of the Legislature. At the end of the week, the governor will reveal more of his fiscal plans when he releases his first budget.
The task of balancing the budget will be difficult, experts acknowledged. Kevin McCarthy, president of the Arizona Tax Research Association, a tax policy and government budget study group, said spending cuts had already taken a toll in the state.
“Unlike where we were at the beginning of the Great Recession, a lot of the low hanging fruit has been picked," McCarthy said.
Rep. Eric Meyer, the House minority leader, agreed there is little wiggle room in the budget.
“I don’t know where we find more dollars without continuing to cut education and education funding, and so that’s a little worrisome to me," Meyer said.
Complicating the budget picture is a Superior Court decision requiring the Legislature to pay hundreds of millions of dollars to the public school system that lawmakers held during the recession. Judges ruled that Arizona's Constitution requires the state to adjust school budgets each year for inflation, something not done during the recession and its aftermath.
Lawyers from the state, school districts and judges from the state appeals court will meet Monday to try coming up with a plan for repayment.
Democrats and the school districts want the full balance repaid immediately while Republicans, including Ducey, are hoping they can stretch the payments over time.
Proposals in Ducey's Monday speech and his Friday budget proposal will be just that, proposals. The Legislature has the ultimate legal responsibility to write a budget.