PHOENIX -- With the state facing another big budget shortfall, Arizona Gov. Jan Brewer has ordered agencies to prepare for possible funding cuts in the next fiscal year well beyond the reductions recently made to keep the current budget in the black.

A memo released Tuesday by Brewer's office instructs agency heads to identify possible budget cuts of 5, 10, 15 and 20 percent below the spending levels now in place after the recent reductions. Many agencies absorbed cuts of about 10 percent of their regular funding - some had reductions larger or others smaller - in addition to losing cash from special-purpose funds for programs.

"Unfortunately, permanent spending commitments based upon faulty or temporary revenues and a bleak economic outlook suggest more difficult times ahead for Arizona," Brewer budget director Eileen Klein said in the memo distributed to agency directors late Monday.

Klein told the agencies that they also need to spell out what the possible cuts would do to the agencies and their programs and services.

"Recognizing that meeting these targets present tremendous challenges for your operations, the governor has called for factual assessments of any potential impacts," Klein stated. "As the governor has repeatedly stated publicly, 'Everything is on the table.'"

Brewer spokesman Paul Senseman said those options include spending billions of dollars of federal stimulus money.

The new directive to agencies comes as some Republican lawmakers bristle under criticism resulting from impacts of the previously approved cuts. Agencies have responded by laying off workers and cutting popular services ranging from child care subsidies to state parks.

The Legislature's Republican-drafted midyear budget fix signed into law Jan. 31 by Brewer closed a $1.6 billion gap in the then-$9.9 billion budget. Lawmakers have been warned that the poor economy continues to degrade tax collections and that a new, smaller shortfall is developing in the current budget.

On top of that, a revenue shortfall above $3 billion is projected for the 2009-2010 budget based on $11 billion of spending. Brewer's new directive aims to reduce planned spending to help keep it balanced with tax collections and other state income.

Senate Appropriations Committee Chairman Russell Pearce, a Mesa Republican who champions spending cuts to close the budget gaps this year and next, on Tuesday called Brewer's directive heads both welcome and helpful.

Pearce said he still favors lumpsum cuts but said getting additional information from agencies on which programs they would cut and which they would preserve would help inform lawmakers as they consider reductions.

Brewer's predecessor, Democrat Janet Napolitano, should have taken similar action last year when it became apparent that the economy was slipping and that state tax collections would diminish, Pearce said.

Klein told the agency directors to identify possible cuts by March 6, but Senseman said the governor has not set a specific timetable for budget action beyond that date.

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