Brewer leaves state in state of economic trouble

brewerRepublicans accused her of being the Democrat Party’s Governor. Democrats shunned her when she suddenly became the scorpion eating tough gal with her late support of SB1070.

Whatever she was known during her time in office, as she leaves office, she is known as the woman who drove the state to the brink of financial collapse. Few believed that she could do as much damage as her predecessor; Janet Napolitano.

Whoever prevails in the upcoming Governor’s race; Republican Doug Ducey or Democrat Fred DuVal, one thing is certain; they better be financially savvy or Arizona will continue to sink deeper into the abyss as state revenues continue to sag.

The state is expected to have a deficit in Fiscal Year 2015. According to the Joint Legislative Budget Committee (JLBC) report of August 2014, “July continued the recent trend of disappointing General Fund revenue results. With revenues $(34.5) million below forecast, July marked the 4th consecutive month of failing to meet the budget projection.”

“The enacted budget had assumed an FY 2014 ending balance of $596 million,” according to the JLBC report. According to the most recent data, the state will have a $(282) million shortfall of in FY 2015, and the FY 2016 shortfall is projected to be $(765) million.

“The FY 2015 and FY 2016 estimates include the $320 million annual cost relating to the K-12 litigation ruling, which requires a “reset” of the per pupil amount prospectively to adjust for foregone inflation in prior years,” according to the JLBC. “It does not include “back payments” for K-12 inflation payments which did not occur in prior years.”

Report findings:

July General Fund revenue collections totaled $662.2 million. Base revenues, which exclude one-time adjustments, were (0.7)% below July  2013.

The July revenue decline was due almost entirely to Corporate Income Tax collections, which posted a significant decline from the previous year. This tax category continues to negatively affect revenue growth, as the double digit decline posted in July continues a trend of 4 consecutive months where Corporate Income Tax collections fell below the prior year.

In comparison to revenue of $662.2 million, July 2014 spending was $2.44 billion which represents an increase of $210.2 million from the prior year.

The state incurs significant expenses during the month of July as it makes nearly $1.0 billion of deferred payments to school districts.
The state’s fiscal health can also be measured by the operating fund balance. The state pays its bills out of the operating fund balance, which  consists of the General Fund and certain dedicated funds. The operating balance as of mid-August 2014 is $1.0 billion. In addition, the  state’s Budget Stabilization Fund has a balance of $455.6 million.

According to the Yellow Sheet, “Ducey is on record as saying he wants to eliminate income taxes and intends to propose legislation every year he is in office to reduce taxes, with the goal of bringing the state’s income tax rate to as close to zero as possible. DuVal has offered an ambitious economic plan that includes a pledge to never cut K-12 funding, restoring all-day kindergarten, reducing start-up costs by providing tax breaks for small businesses in their first three years of operation, raising the caps for R&D tax credits and even reversing cuts to state parks as a way of promoting tourism.”

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5 Comments

  1. She has ruined this State. The only reason she voted and pushed SB1070 was because she ran a poll. She was originally against it. She apparently doesn’t think for herself and she picked “bad” consultants that gave her bad advice because they were being paid by the Hospitals. She again pick Common Core, which was probably her worse decision, perhaps because her educational background is lacking.

  2. our x-gov leader of the ‘homeland security’ left a pile o crap and it remains so – from lousy marketing of the state to being a lousy leader of homeland security – Nappy did nothing… our current governor however was quite the fire stick – forced immigration to come to the national forefront – may not like the result but she forced this issue to become an issue to be addressed ‘now’ – even our current president is still dodging that bullet with out anything being said till ‘after the election’ so he can hope to save a congress and senate who’s floundering under his leadership. We also have a governor that forced the issues of education – abortion – gay marriage – healthcare – again you may not like the answers that have come of this catalyst but it’s on the table being talked about ‘right now’ – they have had to deal with them – I think because Arizona has taken the political edge on these items. I like Brewer if its not obvious …. I’d rather have another like her that is not to timid to ask the tough questions and force the tough issues that should have been addressed years ago… well here they are – again may not like the decisions being made and that includes me, but they are being talked about and decided upon now. BRAVO !!!

    • Agreed. She’s not well liked but so what. If she forced discussion on some hot button issues then I’m all for her. It’s certainly better than a fat slob who caters to Mexico, a doddering old man who can’t even think straight, or an idiot who thinks it’s his place to be playing around on some mindless TV show.

  3. Hater , anti Hispanic ( 44% population), she should have been arrested for threatening jesture to President of United States.

    Hit road you did nothing for Hispanics , DES under your watch, public education is failing all she has done is condone hatred.

    • Anti-Hispanic or anti-illegal immigrant? I think the latter is more fitting of her and there’s nothing wrong with that. Also, I would expect my governor to do right by all, not just a specific ethnic group.

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