State Capitol News
12:58 am
Tue January 1, 2008

State budget woes worsen

Phoenix, AZ –
Host Intro:

The state's financial hole is getting deeper as tax
collections continue to lag behind expectations.
Arizona Public Radio's Howard Fischer has looked at the
numbers and files this report.

One big factor is that sales tax revenues are no higher
this year than they were the same time a year earlier.
That's a big problem because the state was counting on
having more than $2 billion by this point, most of that
coming from the levy on what people buy from retailers
and from contracting. In fact, the figures are about
$153 million below that. Income tax collections also
are down, not because people are having less withheld
from their paychecks but because estimated and final
tax paments are below estimates and the size of refunds
is higher than anticipated.

All totaled, Arizona has
collected just $3.5 billion in the first five months of
the budget year. And that's $310 million less than the
state should have by this point to support the $10.6
billion budget. Lawmakers already are scheduled to
begin hearings a week from today to see where they can
cut.

There is one bright spot in the budget: The state
is spending less than anticipated in aid to public
schools. State School Superintendent Tom Horne said
that's because enrollment is less than anticipated,
probably because undocumented workers have been leaving
the state before the new employer sanctions law takes
effect today.

For Arizona Public Radio, this is Howard
Fischer.