Gov. Jan Brewer said Friday that Arizona no longer needs its 1-cent sales tax surcharge even though state spending, while below 2009 levels, still exceeds ongoing revenues.
"Today we can say that the Arizona comeback has arrived,'' Brewer said at a press conference to celebrate Friday being the last day for the levy. She said the temporary tax, coupled with spending cuts and borrowing, did what it was meant to do: Get Arizona over a fiscal hump.
"It worked,'' she said.
"Today we have a balanced budget and a cash carry forward,'' Brewer continued. She also said the state again has money in its "rainy-day'' fund and said she has presented a balanced budget for the coming year to lawmakers.
But that $8.9 billion budget Brewer presented to lawmakers for the new fiscal year that begins July 1 is not backed by that much in income.
The governor predicts that with the 1-cent levy expired, Arizona will collect $8.4 billion. And even after eliminating one-time expenses from the calculations, the ongoing cost of keeping the state operating next year is $445 million more.
Brewer is making up the difference largely with $725 million she expects to be left over from this year -- much of that from the $950 million the now-expired sales tax surcharge.
Even Brewer conceded that method of patching over the "structural deficit'' cannot continue forever.
Her own budget projections for two years out figure that cash carry forward will dwindle to $123 million. But press aide Matthew Benson said the economy is "healing itself'' and Brewer is expecting a sharp increase in tax collections by that point.
But the governor, who opposed an unsuccessful bid last year to make the 1-cent surcharge permanent, brushed aside a question of how she can say the state has a balanced budget.
"There's always technicalities,'' Brewer said. "But all the zeros all fall in line.''
The question of whether the state continues to need the revenues from the tax hike money is reflected in how aid to education was slashed during the last few lean years -- and how it has not come back to where it was.
The Arizona Education Association figures that if legislators had followed the formula for funding in the law, state aid to schools would be about $240 million higher than it is now. The big difference, according to AEA President Andrew Morrill, is the failure to provide dollars for things like books and computers.
Benson said the budget approved last month by the Senate, close to what Brewer had proposed, adds $145 million from current levels. But $82 million of that is simply to finally comply with a 2000 voter-approved measure to adjust state aid each year due to inflation.
He said, though, K-12 education was not the only place lawmakers were forced to cut funding during the recession. And he said no area of government has been returned to pre-recession levels.
"Nor should they be,'' he said, saying the current funding levels represent a new normal.
"The state came through that, reorganized, re-based its budget and we move forward from that point,'' Benson said. "We're adding back funding where it makes the most sense.''
Brewer's contention that school funding need not be restored to pre-recession levels was backed by Glenn Hamer, president of the Arizona Chamber of Commerce and Industry, who has been a political ally of the governor on key issues.
"We're using dollars far more effectively,'' he said.
"It's a mistake to say that spending equals achievement in education,'' Hamer continued. "If that were the case, Newark, New Jersey would be an Ivy League diploma mill.''
Benson said those hoping for a return to pre-2009 funding levels -- when Janet Napolitano was governor -- are wasting their breath.
"Napolitano has left the building,'' he said of Brewer's predecessor who quit in early 2009 to become homeland security secretary in the Obama administration.