State Capitol News
3:03 am
Mon February 2, 2009

FY 10 Budget fight just beginning

Phoenix, AZ – The vote by the Legislature early Saturday to plug the 1-point-6
billion dollar hole in the budget does not end the fight over
spending cuts.

That's because gap between revenues and expenses for the coming
year could hit $3 billion. John Kavanagh who chairs the House
Appropriations Committee, said that is likely to mean even deeper
cuts to education.

The question of how deep depends on several
factors. Kavanagh said if the economy turns around there will be
more tax revenues. And the state should know soon exactly how
much it will get from the federal stimulus package.

There is another option to further cuts, Kavanagh said: Higher taxes.

"I'm not going down the tax road until the situation is so dire
that there's no other alternative. I'm not prepared to concede
that at this point."

And Kavanagh said if it does reach the point where additional
cuts are impossible he would prefer short-term borrowing.

"I think that's more fiscally responsible because if it's short-
term, then as revenues come back we will not jump back into
excessive spending because we will have to repay the debt. It is
excessive spending that got us into the situation. And the
gimmicks and the rollovers and the stimulus money conceivably can
prevent us from solving it and can bring us right back again."

The work on next year's budget begins this week.