BudgetCutsIn the kerfuffle over Arizona’s immigration laws and protests, it has been easy to forget that the state remains is a desperate financial situation. Even with the recently approved sales tax increase, the state budget remains a mess.

In fact it appears that the state is in a worse situation that ever, given that the one time costs savings have been exhausted, most of the federal stimulus money has been dispensed, the easy cuts have been made and the budgetary gimmicks have run their course. Add the fact that the primary season is right around the corner, complete with it’s political grandstanding, and the situation looks dire. The state will find out just how bad when the new budget discussions begin on Thursday.

Mary Jo Pitzl gives an overview of the pending fiscal storm in today’s Republic:

…State analysts are projecting deficits that range from $368 million to $1.3 billion, even before the spending starts. The size of the deficit hinges on the outcome of two ballot measures in November and whether Congress approves another dose of stimulus dollars.

Last last week, budget analysts warned that more trouble could loom: The K-12 budget has a potential $130 million shortfall, though that won’t be certain until after enrollment counts are made for the new school year.

All of this points to another round of anguished debate at the state Capitol, as lawmakers and the governor will struggle to bring a budget they approved nearly four months ago back into balance.

“We are in very, very tough shape now,” said Rep. Rick Murphy, R-Peoria. “It’s going to be a rude awakening for voters who voted for the sales tax (increase), thinking it would get us over the hump.”

Last month, Arizona voters increased the state sales tax by 1 cent, to 6.5 cents on the dollar. It was sold as a bridge to help the state weather expected tough financial times through 2013. Although its supporters didn’t call it a cure-all, lawmakers such as Murphy believe that’s what many voters heard.

Budget forecasts show that, even with the expected $1 billion a year from the sales tax, Arizona is poised to start the 2010-11 fiscal year with a $368 million deficit.

The deficit would burrow deeper – by nearly a half-billion dollars- if voters reject ballot measures in November that seek to redirect spending from two voter-approved measures.

[…]

If the money doesn’t materialize, the deficit could swell to more than $1.3 billion.

Read the whole article here