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Budget cuts can't wait until January

The sooner the state, city and NAU come up with game plans, the less disruptive the changes will be.


Sunday, November 09, 2008

We don't mean to sound like Chicken Little -- the sky really isn't falling.

But it might be in several months if local and state officials don't take immediate steps to revise their spending plans. Yes, we know that newly elected state lawmakers don't take office until January.

But if Congress can convene a lame-duck session to pass an economic recovery package, the Arizona Legislature can do the same.

And with good reason. Three months into the fiscal year, state revenues are off by $300 million. Project that over a year, and the deficit comes to $1.2 billion.

And that doesn't count October, which, according to preliminary sales and employment reports, was worse than September.

Politically, it makes sense for Gov. Janet Napolitano to act sooner than later. She is high on the list of likely Obama Cabinet appointees, making her a prospective lame duck, too.

Also, she has more Democrats and moderate Republicans to work with now than she will when the new Legislature convenes in January -- moderates like Tom O'Halleran of Sedona were defeated.

That is not good news for northern Arizona and particularly Flagstaff, which is highly reliant on state government appropriations. Northern Arizona University, with more than 2,000 employees, receives $154 million a year, while the Flagstaff public and charter schools get about $60 million. The latter is off-limits to major cuts because of constitutional limits, but that doesn't hold for the universities.

NAU has already absorbed a $7.5 million state cut this year -- less than 5 percent. But a new 10 percent cut would amount to $15 million more.

On the Mountain Campus, those cuts will be hard. If it comes halfway through the year, a 10 percent cut on paper is actually 20 percent of the remaining spending left in the budget. Further, most tenure-track faculty and some researchers are on year-long, binding contracts. That leaves part-time instructors and support staff in the colleges and student services to bear the brunt of payroll cuts. Programs that are ancillary to the core academic mission -- athletics, entertainment, publicity, building and grounds -- will likely see bigger proportional cuts.

Ironically, the operating cutbacks come as the university is ramping up for a three-year, $170 million building program designed to boost the local construction industry. Unfortunately, that money can't be mixed with funds that support teaching, research and student services.

President John Haeger is convening a budget meeting of senior staff this Saturday in anticipation of a double-digit cut in state funds. He will announce the plan Dec. 1, with or without a specific legislative directive, and it will come none too soon.

The same process is needed at the city level. Sales tax projections in Flagstaff that were ratcheted back from an unrealistic 10 percent increase to flat are likely to fall into negative territory after October figures are in. An initial $2 million shortfall has been covered with stopgap measures. The council's budget retreat this coming week should include reopening this year's spending plan in anticipation of further losses in state shared revenues as well as local sales and BBB taxes.

Will advance planning make the pain of job losses in the public sector any less painful to employees and those on the receiving end of program cuts? Maybe not. But just as private businesses must be responsive to changing financial conditions and the needs of customers and clients, government should be accountable to an orderly realignment of resources that protects core services: police, fire, utilities, street maintenance and public health and safety. We will all be asked to sacrifice this coming winter and on into spring, and the sooner that elected and appointed officials come up with a game plan, the more buy-in there will be at all levels.

Serving this week on the Daily Sun Editorial Advisory Board were Publisher Don Rowley, Editor Randy Wilson, and citizen members Cathy Smith, Shan Dan Horan, Mary Natali, Joan Baker, Neal Clark and Heidi Nichols.

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