Posted by AzBlueMeanie:
Following her humiliating defeat in Special Session No. 5 on Saturday (Despite the budget cuts approved by the Legislature, the state is still an estimated $1.4 billion in the hole for the current fiscal year. Budget deficits for fiscal 2011 are estimated at $3.3 billion), the Accidental Governor called an emergency meeting of her cabinet on Monday.
The open cabinet meeting — the only one of her 11-month administration — was staged to burnish her image of being in command of the situation. Brewer announces financial plan There were political components to the event: In attendance were Grant Woods and Mary Peters, the co-chairs of her 2010 election bid, and Doug Cole, a hired political consultant to the campaign.
Since when are campaign staff members of the governor's cabinet?
There is far less to the governor's financial plan than meets the eye:
• Brewer ordered deportation of illegal immigrants in state prisons who were convicted of non-violent crimes before they finish their sentences.
But the state has been turning inmates who have completed half their terms to Immigration and Customs Enforcement since 2005; this simply moves that up by 90 days.
• The governor said she “restating” her directive that state agencies provide benefits only to those in this country legally. That already is law, with the Legislature approving closing the last loopholes a month ago.
• She told state agencies to take money lawmakers gave them for special programs and instead use those funds for their core operations. Authorization to move around that cash, however, already was granted to agencies by the Legislature.
• Brewer wants “means testing” for state programs to require a showing of need. But state agencies told Capitol Media Services that already is the case for virtually all of them, the one notable exception being services for the seriously mentally ill.
• The governor ordered a cap on enrollment in a program that provides subsidized child care for needy families. But that cap was put in place in April, with more than 10,300 already on a waiting list.
Separately, the governor directed the Department of Administration to prepare rules to allow a 5 percent cut in pay for state workers.
But gubernatorial press aide Paul Senseman said Brewer is not actually ordering such a move. Instead, she is paving the way for agencies to make those reductions which were actually authorized last week by the Legislature as options for state agency chiefs.
Brewer read solely from a script and refused to take questions afterwards about the plan or why she didn’t mention her demand for lawmakers to let voters decide whether to hike state sales taxes. All show and no substance.
One thing Brewer ordered Monday which is within her authority is prohibit any more families from enrolling in the Kids Care program. That provides nearly free health care to about 47,000 children of the working poor, those families earning too much to qualify for AHCCCS but below twice the federal poverty level, or about $36,620 a year for a family of three.
She also established a Privatization Commission, charged with finding ways to have outside firms do the work now being performed by state employees. Done properly, Brewer said, these outside contracts “will help the state reduce operational costs, improve service delivery and quality, and lead to innovation.”
Brewer also promised to bring together legislative leaders from both her own Republican Party as well as the minority Democratic Party.
You mean like she pretended to do this summer before she agreed to a backdoor GOP-only "Sham Wow!" budget that fizzled in failure? Brewer does not have a track record of bipartisanship or of being trustworthy. She has always been a partisan hack. A tiger doesn't change its stripes, especially in an election year, and especially when there is a contested primary.
Jan Brewer is only rearranging the deck chairs on the Titanic:
Cuts cannot be made in to K-12 education — or universities for that matter — because the state accepted federal education stimulus dollars. These require the state to repay that cash if funding drops below 2006 levels, which is where it is now.
And the state’s acceptance of other stimulus dollars for the Arizona Health Care Cost Containment System prohibits altering eligibility requirements.
There is no prohibition against cutting prison costs. But lawmakers have refused to alter sentencing laws to reduce the length of terms that judges can impose.
Arizona is spending $10.1 billion a year but is bringing in only $6.4 billion in revenues. The current budget deficit stands at about half of that gap, but only because of federal stimulus dollars that soon will run out and the planned, one-time sale of state prisons [which has not yet occurred]. Put sales tax on ballot, even if it's bad idea
Arizona State University economist Marshall Vest recently illustrated the challenge for lawmakers:
"The bottom line is, you could lay off every state employee and not begin to balance the budget," Vest wrote. "You could entirely eliminate funding for higher education and not come close. Ditto for welfare programs such as food stamps, TANF (Temporary Aid for Needy Families), the disabled, unemployment insurance, assisted living, and programs for children such as child abuse, child care, and foster care."
Budget cuts alone will not resolve the budget crisis. The problem lies on the revenue side.
"It is the worst of all worlds," says Elliot Pollack, Arizona State University consulting economist who was the lead economist for Valley National Bank for 14 years. Decade flipped Arizona upside down:
"Population growth has slowed to next to nothing. People aren't retiring because their 401(k)s have been decimated. The housing market is down 85 percent from the peak. People aren't moving into apartments because of how cheap houses are. Tourism has been hit.
"Every place we were strong," he says, such as commercial real estate and the semiconductor industry, has crumbled.
* * *
"We have a once-in-a-generation opportunity to do something," Pollack says. The collapse exposed the weakness of Arizona's reliance on population as an economic driver.
The old formula of relying on uncontroled population growth to replace tax revenue lost due to tax cut after tax cut will not work this time. Arizona has no choice but to raise taxes to balance the state budget, as required by the Arizona Constitution.
The place to begin is by eliminating tax exemptions and costly tax credits (as the Democrats have proposed), and to raise tax rates on the upper income brackets. This requires a two-thirds vote, so it requires the votes of Republicans and the Accidental Governor to sign the tax hikes into law. It does not require a costly special election referred to the voters.
This is where there is a failure of will and an abject failure of leadership. Arizona may very well begin issuing warrants (IOU's) as early as January if the state is no longer able to obtain credit to continue operations. This crisis is fast approaching critical mass, and time is running out.