KINGMAN - The state 2009 budget may be fixed and signed into law, but it's still causing controversy.
Arizona Governor Jan Brewer signed the fix into law on Thursday (5/14). State school districts are claiming that the fix will raid a savings fund designed to help schools pay for maintenance and repairs to buildings.
Mohave County Sen. Ron Gould says otherwise.
"We didn't take their savings account. We didn't take any money," he said. What the Legislature did do was give the schools permission to use the funds for other projects.
Normally schools are limited each year as to how much money they can use from the fund to make repairs and how much of that money they can roll over to the next fiscal year, Gould said. The funds are collected from property taxes. Schools are supposed to reduce property tax rates in order to avoid accumulating more than the 4 percent allowed to roll over to the next year.
This year the bad economy and a surprise on Tax Day, April 15, caused the Legislature to change the rules, Gould said. The state took in less money and paid out more in tax refunds the than it expected on April 15.
This caused State Treasurer Dean Martin to issued nine warrants in order to cover more than $340 million in payments for school and state employee payroll, tax refunds and university and public schools payments. This was the first time since the Great Depression that the state had had to issue warrants. The warrants were paid off by the end of April.
The Legislature was able to use $250 million from the stimulus package to cover part of the 2009 budget deficit and push $400 million, including $300 million to schools, to the 2010 budget.
"It's essentially a smoke and mirrors trick to prevent the state from going into bankruptcy," Gould said.
Former Gov. Janet Napolitano used to use it all the time to increase spending, he said.
Mohave County Rep. Nancy McLain said most Republicans found the idea of rolling over debts to the 2010 budget repugnant, but decreasing revenues left the Legislature with no choice.
"I campaigned in 2004 on the idea of not rolling any more funds over like this," McLain said. "But we're in such dire straits. There's no way we could ask for further cuts in department budgets with only six weeks left (in the fiscal year.)"
The Legislature wanted Brewer to use more of the stimulus funds to help balance the 2009 budget, but Brewer decided to hold onto some of the funds, since the revenue forecast for 2010 didn't look very promising, McLain said.
Next on the agenda is to continue working on eliminating the more than $3 billion deficit in the 2010 budget.
The Legislature has been working on the problem since February and is on track to finish it at the same time as the last several budgets, Gould said.