State Budget Buzz‏

State Agencies Getting Ready for FY 2011, But 2010 Needs More Work

Last month the Governor's Office of Strategic Planning and Budgeting (OSPB) asked each state agency to identify potential actions that would reduce their spending next fiscal year by 15 percent. Some of those ideas and their impacts to state services have been in the news. The agency submittals are posted for public view on the OSPB web site at http://www.ospb.state.az.us/BudgetReports.asp. As you look them over, keep in mind that the lists are of potential actions for FY 11 - they have not been adopted and are intended as a planning tool.

Yesterday, the Finance Advisory Committee (FAC), a group of economic experts from areas such as the real estate and utilities industries as well as universities, met to discuss the overall economic environment and state revenue projections. Following that meeting, Richard Stavneak, Director of the Joint Legislative Budget Committee (JLBC), shared a staff memorandum with members of the JLBC. The memo summarizes the state's FY 09 shortfall, FY 10 veto impact, FY 10 revenues and other FY 10 projections. Based on these elements, JLBC staff project that the FY 10 ending balance will fall short of the budget by $2 billion. View the entire Finance Advisory Committee Revenue and Budget Update Presentation of October 22, 2009 and more.

As the State's coffers are just about running on empty, there is more rumbling about the Governor calling a special legislative session to enact spending cuts and other adjustments in November or early December. Stay tuned.

Bad News Rolls Downhill

Included in yesterday's report was the sobering news that Urban Revenue Sharing (the part of Shared Revenue that comes from the state income tax) will decrease in FY 11 by $155 million due to sluggish income tax revenue in 2009. That means $47 million less for Phoenix than in FY 10. Income tax, sales tax and Highway User Fund revenues continue to lag behind last year. Shared Revenues typically represent between 30 and 40 percent of a city or town's general fund budget, and are spent primarily on police and fire services.

Phoenix is underway with our regular budget cycle, evaluating expenditures and preparing for potential reductions - reductions that would be made worse by any additional Shared Revenue sweeps by the State Legislature. Departments are examining their budgets for any possible savings that have emerged since the last budget planning cycle. So for now,

Remember to SHOP PHOENIX and tell your legislators to protect city revenues!

Source: P.L.A.N.