Arizona Legislature acts to close $650 M gap in -˜09 budget

Creative solution maximizes savings, avoids tax increases in states worst budget shortfall in history STATE CAPITOL, PHOENIX Senate and House Republicans acted swiftly to close a $650 million gap in the final weeks of the fiscal 2009 budget. The budget fix includes $250 million in federal stimulus money and a delayed payment of $100 million to the universities. It also includes a temporary suspension of a $300 million cash payment to K-12 that will be offset by school district cash balances in excess of their legal spending authority. The use of the schools excess cash is part of a solution that authorizes districts that have excess funds for maintenance and operations to spend their own money for 2009 and does not create a negative cash balance or the need for a property tax increase, said Senate President Bob Burns, R-Peoria. By moving quickly, we can address the states cash flow problem in a way that does not reduce school district spending authority or increase property taxes. The proposal suspends $300 million of the $330 May 15 apportionment payment, causing districts to spend their own cash through the end of the fiscal year. Counties will grant registered warrants to districts without cash, as is normal practice. The $300 million will be held in reserve as budgets are adopted and submitted to the counties and used to fill in any holes from negative cash balances and warrants. Both the Senate and House passed the legislation that has been sent to the governor, who is expected to sign it.