Gov. Jan Brewer is once again working against a deadline to approve the Legislature-approved 2010 budget, but this time the stakes are much higher, state Treasurer Dean Martin said Wednesday.
Brewer has until Saturday to make a decision on a budget proposal sent to her by the Legislature Aug. 20. The proposal is nearly identical to the one she vetoed in July.
Martin said the state needs to have a balanced budget by the end of this week or it will be unable to fund several departments and pay many of its employees starting in late October.
Without an approved budget, the state would be forced to issue IOUs, distribute money as it comes in and delay giving paychecks to government workers, Martin said.
“We would be living hand-to-mouth for the rest of the year,” Martin said. “Some people will get paid, some will get IOUs.”
The governor’s office did not respond to requests for comment on the budget’s status by press time.
The state is about $111 million in debt, and although the Treasurer’s office can lend approximately $500 million internally, Martin said his office would be unable to cover costs by October, however.
In order to keep running, he added, the state would need to borrow money from outside institutions, but such a request takes six to eight weeks to process. Also, lenders will only hand over the money if the state has a balanced budget, Martin said.
“The state of Arizona is no different than any other person trying to borrow money from these banks,” Martin said. “If you can’t pay us back, we’re not going to loan you money.”
Should the state run out of money, university financial aid funding could also be delayed, forcing the Arizona Board of Regents and the universities to find ways to cover their own financial shortfalls, he said, including staff layoffs and furloughs.
“It would put the universities and the Board of Regents in a cash crunch,” Martin said.
Rumors that Brewer had already signed the budget circled around the state Capitol Tuesday.
The rumors were a response to Brewer’s scheduled trip to Monterrey, Mexico, for a meeting of the Border Governors Conference, which would have lasted until after the budget deadline.
In her absence, Democratic state Attorney General Terry Goddard would have been in charge of making a decision as acting governor.
On Tuesday, Brewer’s office announced the governor had canceled her Mexico trip to focus on the budget.
Unable to reach an agreement with members of her own party, Brewer has been negotiating with the Legislature’s Democratic minority to push through an alternate budget with a sales tax increase.
But Rep. Cloves Campbell, D-Phoenix, said an agreement is unlikely because the governor seems unwilling to make concessions to the Democrats.
Campbell said he would like to see the property equalization tax, which goes directly toward funding education, re-instated, but Brewer will not comply.
“I have no problem supporting [the tax increase], but we’ve got to get some concessions on some of the things we want,” Campbell said.
Rep. John Kavanagh, R-Fountain Hills, said the state will be thrown into crisis mode if Brewer does not act soon.
“Every day she delays is a day of lost savings,” Kavanagh said. “If she can’t cut a deal with the Democrats, she either signs our budget or throws the state into chaos.”
Reach the reporter at derek.quizon@asu.edu.
