State lawmakers return to the Capitol on Monday with more cash available than required to cover the basic operation of state government.

But the budget — and which programs get more money — still will be the top issue this session.

The reason is that the state actually is spending more than it is collecting in taxes. The only reason the books remain in the black is there is some cash left over from the now-expired one-cent sales tax.

That, said Rep. John Kavanagh, R-Fountain Hills, is a situation fraught with problems.

“The budget projections are quite clear: Even taking into account the $600 million to $800 million surplus we currently have, in 2017 we'll be a half a billion dollars in the hole,” said Kavanagh who chairs the House Appropriations Committee. That's assuming the only spending increases are those which are necessary to keep pace with population and inflation.

“Once you start adding discretionary increases, you're pushing (toward) a billion-dollar shortfall,” he said.

But the demands are there.

Most prominent possibly is a request for an additional 444 new staffers, including 394 caseworkers, for Child Protective Services to deal with increasing caseload. That request alone carries a $115 million price tag.

Gov. Jan Brewer has not yet said how much of that she will support, but the public uproar on the discovery of 6,500 abuse complaints going uninvestigated virtually ensures that lawmakers will come up with at least some additional dollars.

Brewer already has some other priorities that will require cash. One is a plan to financially reward schools that boost student achievement.

In essence, the state would use each student's current standardized test scores as a baseline and then see how much they have improved in a year. A school that manages to take a low-performing student and advance him or her several grade levels in reading, for example, might get an extra $300 in state aid.

Some funds also would be available to schools who manage to keep already high-performing students on academic track, with the average boost being somewhere between $10 and $60, on top of the approximately $4,110 per student each school gets.

A similar proposal by the governor last year faltered because it would have been funded in part by taking money from schools where students were lagging, an idea that proved politically unacceptable. This year's plan is all new money.

Only thing is, that carries a $40 million price tag. And that's just for the first year — and even more in subsequent years — the years of predicted red ink.

There's another shoe waiting to drop.

Lawmakers were forced last year to add about $80 million in basic state aid to schools after the Arizona Supreme Court ruled that legislators acted illegally in ignoring a voter-approved mandate to adjust that figure every year for inflation. And a similar amount will need to be added for the coming year.

Don Peters, one of the attorneys for the Arizona Education Association which filed the successful lawsuit, said the Supreme Court ruling does not end the matter.

He is asking a trial judge to now order the state to reset the state aid figure to what it would have been had lawmakers complied with the inflation adjustment all along. Peters said that would provide an immediate cash infusion to schools of $320 million.

It may be even more expensive: Peters said he will also try to get a judge to say the state should make good on all the money the schools should have gotten in the interim. He figures that to be $1 billion but said that, given the size of the entire state budget is only about $9 billion, the schools would agree to repayment over several years.

There will be other demands for cash.

For example, the Board of Regents already has said it needs an extra $100 million for the three universities to help catch up with the cuts made in prior years.

There also is pressure on lawmakers to bring a halt to the practice of raiding the Highway User Revenue Fund. That account, made up of gasoline taxes and vehicle registration fees, is supposed to be used for road construction and maintenance. Legislators have diverted more than $100 million a year for years to balance the budget.

Business interests also have their hand out with a controversial plan to have the Legislature create what amounts to a venture capital fund to invest in new firms. But that $50 million request faces resistance from some lawmakers who question whether such an investment is constitutional.

And State Forester Scott Hunt is asking lawmakers to double his budget to hire 15 staffers, replace equipment and provide dollars to thin out trees and shrubs.

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