'We have to have some sort of plan'

The budget clock continues to tick away in Phoenix. Legislators thought they had slowed the clock with a bill that would have frozen around $548 million in spending, but Governor Janet Napolitano vetoed the bill Tuesday.

Legislators are already starting to talk of shutting down the state government and ways to keep necessary government services, such as Public Safety, when the state runs out of money at the end of May, Sen. Ron Gould said.

"I don't know if we're going to come to some sort of a solution before the last week of May. So we have to have some sort of plan," he said.

A similar event happened in 1995 when the federal government shut down because the president failed to negotiate a budget with Congress.

Should it come to shutting down state government offices, the Legislature could dip into the rainy day fund to keep necessary services going, he said. But it would require a vote of the Legislature to suspend the rules.

According to state statute, money from the rainy day fund can only be transferred into the general fund after several months of a significant downturn in the economy.

Gould said the state hasn't reached that point yet. He is also puzzled by Napolitano's veto. According to him, the governor could have prevented or minimized the problem by addressing it earlier in the fiscal year.

She could have called the Legislature into session in August, he said. But she waited until the start of the next session in January.

The Legislature could have called itself back into session, he admitted, but that would have required a two-thirds vote of both houses. "We didn't have two-thirds that wanted to come back into session," he said. "So the governor should have called us back into session."

Waiting this long in order to address the problem has limited the possible solutions the Legislature and the governor could come up with, since most of the money budgeted for 2008 has already been spent, he said.

The freeze proposed by the bill would have saved enough money to balance the budget until the end of the fiscal year, he said.

"I don't know why the governor decided to veto that, unless she wanted to just continue to spend it so it's not available to balance the budget," he said.

In a letter to the Legislature, Napolitano called the bill "wholly inadequate" and stated that the bill "lacks bipartisan support and addresses less than half of the budget shortfall."

"Essentially, she says that she's been down here for seven weeks and 'you haven't given me what I want,'" Gould said.

The truth is, he said, Tuesday was the first time the governor physically sat down to negotiate with the Republican leadership of the Legislature. "All we've been doing is negotiating with Democratic leadership," he said. "She's not wanted to participate in negotiations. She isolates herself by using Democratic leadership so they have an escape clause."

Gould also accused the governor's agencies of dragging their feet in getting the Legislature budget numbers.

He believes the state's budget woes are due to overspending and now the state only has two options, either raise taxes or cut spending.

"We need to get in with a sharp knife or a sharp pencil and start cutting out things because we've never done that," he said.