State's economy shows signs of life

Despite some positive hints that the state's economy may be rebounding, March general fund collections were 13.3 percent under last year's collections and $44 million less than expected.

The March decrease is the third month in a row where state revenues were down by double digits compared to a year ago.

The report by the Joint Legislative Budget Committee comes on the heels of an Arizona State University study that shows home sales may be starting to pick up, compared to a year ago.

But lawmakers were cautious at the various reports.

"You may see some spikes one way or the other, but I'd be guarded," said Rep. Bob Robson (R-Chandler), who represents Ahwatukee Foothills and Legislative District 20. "There are a whole host of things other than housing that make up the economy."

With state revenues less than projected, lawmakers and Gov. Janet Napolitano agreed last month on a $1.36 billion fix made up of $310 million in spending cuts, $296 million in unspent funds that were put back into the coffers, $487 million from the state's rainy day fund and delaying $272 million in education spending from this fiscal year into next fiscal year.

Meanwhile, lawmakers are working on next year's budget, which takes effect July 1. If the economy continues to be flat, next year's deficit could hit close to $2 billion, say some experts.

In March, home sales increased 16 percent over last year, although the average price is down 19 percent.

At the same time, non-farm employment decreased a fraction compared to last year, a reversal of the usual trend, which in the past decade saw employment grow by more than 3 percent a year.