Arizona Budget Shortfall Widens

The state's budget hole may deepen further, to $2.2 billion, analysts reported Friday in delivering another grim account of Arizona's fiscal state. Compounding the somber financial news, tax collections for the past two months are below projections, creating the possibility that the Legislature may have to make further fixes to the current year's budget, which they just adjusted late last month. The news from the Joint Legislative Budget Committee comes as lawmakers have a month left to craft a budget for the year starting July 1. "It just makes it more difficult," Senate Appropriations Chairman Bob Burns said about the 2008-09 deficit growing to $2.2 billion. The current budget is $10.5 billion. "I think we need to start planning for the worst, instead of this 'everything is rosy' outlook," Burns said.

The mood was somber Thursday as Cottonwood City Council members mulled how to plug the dike gushing red ink. They sat at the dais unsmiling as their finance director read a litany of cuts, reductions and eliminations his office and department heads have put into place to get ahead of the leakage and balance the ledger. Sales taxes to the city declined by 10.4 percent this year with another 3-percent loss expected in 2009. State revenues to the city have declined by 5 to 6 percent. There are three fewer police officers on the street. Those that are patrolling are driving fewer miles to save fuel costs. Departments have cut back on vehicle and equipment maintenance and janitorial cleaning. The fire department cannot meet OSHA requirements for a complete engine crew. The city is withdrawing funds to outside entities, including support for the Senior and Youth Commissions and Verde Valley Veterans.