The Arizona Legislature and Governor are being urged to quickly reach an agreement to balance the FY 2008 budget by Arizona State Treasurer Dean Martin. Martin announced that Arizona would be in the red in as soon as 5 weeks without the passing of a revised budget. According to Martin, the state currently has over $12.7 billion dollars in deposits invested, of that is $5.2 billion in state funds.
Martin goes on to say, “We have structured our investments to ensure there is liquidity for both state and local governments to meet their cash needs during this economic downturn. As a bank we are in very good shape, but the Governor and Legislature have some work to do to make sure the General Fund account is not overdrawn in the next few weeks.”
“We have analyzed the current spending for the first 262 days of this fiscal year (as of March 18th), and the state has not slowed its rate of spending during this budget crisis. The exact opposite has occurred; general fund spending is on a pace to even exceed the original FY 08 appropriation.”
“At the current spending rate, the General Fund only has enough revenue to make one more payment to schools, and perhaps three more paydays for employees before the account is overdrawn at the bank.”
“The state has already spent over $7.6 billion of the General Fund; that is over $29 million per day. Meanwhile revenues have continued to slide. Both the Governor and the Joint Legislative Budget Committee (JLBC) have lowered their General Fund revenue estimates. Without immediate intervention by the Governor and Legislature to pass a revised FY2008 budget, the General Fund will be overdrawn as soon as April 23rd but no later than May 5th,” Martin said.
“While the State does have other funds in other accounts, as Treasurer I do not have statutory authority to move money from the State’s other accounts to cover their deficit; only the Legislature and the Governor can move those funds through an appropriation. They need to act quickly before the General Fund account is overdrawn.”