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Arizona's First Political Blog

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By Anonymous Mike, pseudonymously.

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Tuesday, November 11, 2008
Musical Chairs

Governor Napolitano, after spending the past few months out on the national trail campaigning for Obama, somehow found time from her day job as member of the Obama transition team to call for a special session of the Legislature to deal with the FY2009 budget crisis.

I know what you are saying; we've heard all of this before. However let's look at it from a political angle.

JLBC is projecting a FY2009 deficit of $1 billion+, expect that to go up. They are also projecting, depending on the assumptions used a FY2010 deficit of $2 to $3 billion.

Let's look at some other facts. We're already into FY2009 and the slip-shod budget the Democrats put together last June (proposed by the Governor and passed with unanimous Democrats support along with a few Republican defectors) tried to bridge the gap by using up most of the remaining cash reserves, accounting tricks like K-12 rollover, and financing. The budget ended up blowing up because that budget fix relied on an unrealistic rate of revenue of growth; everyone knew that the deal was unworkable and that this special session was coming.

So in dealing with the new FY2009 gap, all the previous tricks are all used up. So we're back to either budget cuts or tax hikes. The problem with budget cuts is that nearly half the $11 billion budget is untouchable because of ballot initiatives, so do you take a 20% whack out of prisons? Universities? Now move on to FY2010 and the necssary cuts get even larger.

Don't want to do cuts of that magnitude? Then either raise taxes or propose a ballot initiative to open up K-12 and ACCHS. It all comes down to money and just like robbing banks, you can only cut where the money is.

Oh I guess there is another way and that is to securitize the Lottery and the tobacco settlement to try to get through FY2009. The problem is that Arizona is currently spending about $2 billion more than it takes in, to liquidate assets to prop up spending does nothing to close that gap and only postpones the day of reckoning.

Hey it took 8 months longer than I thought but now fiscal blood is going to be on the floor (or the wall, depending on your metaphor)

So the music is going to stop and politically speaking who's going to be left standing?

Governor Napolitano? Nope... because the worst-kept secret in Arizona is that she doesn't want to be governor anymore and has been working for the past 9 months to get a job in an Obama Administration. Her appointment, whether to AG or Homeland Security, should come well before Christmas or in other words well before a budget deal on FY2009 is reached. From her DC office, Napolitano can watch as it's Governor Jan Brewer's name that goes on the budget cuts and/or tax hikes.

The Democrats in the Legislature? Nope... not only are they still in minority but their numbers have actually shrunk. They can sit back and let the Republicans try to figure it out. If the Republicans ask for some bipartisan cover on the necessary budget wet work that needs to be done, the Dems can point to the original FY2009 budget that was passed on almost straight party-line votes.

No, it's going to be the Republicans who will take the blame for cleaning up the budget mess and Napolitano's can kicking. The Republicans who will be blamed for the large cuts in state agencies or proposed tax increases, Republicans who will be blamed for trying to close that $2 billion structural deficit.

Hope you had a nice break from the end of the 2008 Election because the 2010 gubernatorial election has just begun.