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Thursday, December 24, 2009 12:34 AM


Arizona Governor Jan Brewer: "We face a state fiscal crisis of unparalleled dimension"


If you did not know Arizona was having immense budget problems, you do now. Here is Arizona Governor Jan Brewer on the Arizona Crisis of "Unparalleled Dimension".

Dear Fellow Arizonan,

We face a state fiscal crisis of unparalleled dimension – one that is going to sweep over every single person in this state as well as every business and every family.

That is why I held an emergency cabinet meeting yesterday morning where I outlined for our state’s elected leaders and business leaders the ills our state faces. As I told them yesterday, we ARE faced with some of the worst days in our 97-year history.

We can debate how we got here, but we CANNOT remain paralyzed in our efforts to address the situation. We must set aside partisan politics and face the problem head on.

So here’s the TRUTH:
  • The state has a budget deficit for the current fiscal year of $1.5 billion.
  • Next fiscal year, 2011 -- a budget year that begins in just six months -- is even worse. Next year’s budget deficit stands at $3.4 billion. As of today -- right now, that MUST change.
..

This problem did not happen overnight.
  • Five years of spending nearly doubled state government.
  • The economic recession has reduced state revenues by almost 40 percent in just 3 years.
  • Population growth in school children, university students, health care and welfare populations and inmates in our state prisons has fundamentally ruled out simplistic solutions like rolling the state budget back to levels from five, six, or more years ago.
  • Federal and voter mandates prevent us from touching nearly two-thirds of the state budget.
  • And procrastination, denial, and lack of will have allowed these problems to fester.

We must solve these problems and we must solve them now. More than calling for cooperation, today I had state government implement various emergency measures meant to ensure Arizona’s fiscal solvency. Among them:

  • I ordered the Arizona Department of Corrections to return to the custody of U.S. Immigration and Customs Enforcement (“ICE”) -- as soon as possible -- all non-violent criminal aliens as is allowed under existing law. These inmates are the responsibility of the federal government (as is securing our border with Mexico). Arizona should not have to bear this cost.
  • I am restating my Arizonans-only directives to state agencies to ensure that public benefits are provided only to those who are legally in this country and who reside in this state.
  • Effective immediately, I have ordered all state agencies who benefits to citizens to implement means testing and sliding fee schedules. While the government safety net must stay in place, we need to secure help only for the neediest among us.
...

We owe it to the citizens of this state -- our children and grandchildren -- to adopt and approve a solution.

Sincerely,

Jan Brewer

Governor
Arizona Budget Status

Inquiring minds are digging into Arizona Budget Status FY 2010 and 2011 Presentation given by Jan Brewer. Here are a few screen shots.

Click on any screen shot for sharper image.



Revenue Vs. Expenditures


Operating Cash Balance



Peak Employment



Jobs Projection



Arizona Base Revenue



Reasonable Admission Of Problem

This is the most reasonable admission of a huge budget problem by any governor to date. However, the governor fails to point out the role of unions, pensions, and bloated government bureaucracy in the mess. Otherwise it is a good start.

The jobs projection seems realistic. Please note however, the chart depicts a jobs projection, not an unemployment projection. If it does take 7 years to get back to even, Arizona's unemployment may be the same or even higher than it is today.

To properly analyze the jobs situation one needs to factor in demographics: The birth rate + immigration - boomer retirees.

One could easily create a spreadsheet to do just that based on the one I created for the US as a whole.

For details, please see ....

Arizona is first up to the confessional especially in regards to the grim employment picture. Who is next?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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