Could rift over Ariz. budget lead to shutdown of state services?

by Casey Newton and Mary Jo Pitzl -
Jun. 17, 2009 12:00 AM
The Arizona Republic .

Driver's licenses will be unavailable. Road construction will grind to a halt. Child abuse will not be investigated.

Those are some of the scenarios state agencies are preparing for should state leaders fail to agree on a budget by July 1.

The nearly total shutdown of state government, a possibility raised last week by Gov. Jan Brewer, has grown more likely this week as Republican leaders in the Legislature refuse to send Brewer the budget package they approved June 4.

Brewer, a fellow Republican, is widely expected to veto the bills. On Tuesday, she sued the Legislature in an effort to shake the bills loose so she can take action.

If a shutdown happens, it will be a first. In 1992, the state came within seconds of closing its doors as the Legislature tangled with then-Gov. Fife Symington over the budget.

Republican lawmakers this year have dismissed the threat of a shutdown as a stunt designed to pressure them into backing Brewer's demand for fewer budget cuts and a referral to the ballot for a sales-tax hike. The state faces a 2010 budget shortfall of at least $3 billion.

Agency directors have taken the threat seriously. Brewer ordered them to develop contingency plans to keep essential state services operating for several weeks, if necessary.

The Department of Administration is compiling those plans, which the governor must approve. If leaders don't come to a budget agreement, the authority to spend money expires on July 1, the beginning of the next fiscal year. The only way to keep even bare-bones services running would be to enact special legislation that would allow money to flow on a month-to-month basis.

If government does shut down, Arizonans will feel it in several ways. An Arizona Republic survey of key state agencies found:

• All Motor Vehicle Division branches would close, preventing Arizonans from getting driver's licenses, having their cars inspected or registering their vehicles in person. The MVD is making arrangements to make at least some of those services available online.

• The state would be unable to take abuse reports for children and the elderly, provide child care or cash assistance to families, or provide services to victims of domestic violence.

• The Department of Health Services would suspend operations, preventing officials from conducting investigations and tracking disease outbreaks at the state level. Coordinating the response to cases such as the recent swine-flu outbreak would be left to counties.

• All 28 state parks would likely close indefinitely.

• All state highway construction and projects would be suspended.

• Visitation at all 13 state prisons would be suspended, as would programs that allow inmates to perform work for cities, counties and state agencies.

• The governor, lawmakers, attorney general and other constitutional offices could still operate. But there would be no money or authority for staffs to work.

• Payroll would be shut down. That could leave thousands of state workers without compensation for work they did June 15-30 because checks for that period will not be cut until July 3.

State Treasurer Dean Martin said that absent stop-gap funding legislation, "all the financial operations of the state come to a halt at midnight on June 30."

That means no ability to issue paychecks, pay bills for such basic services as electricity and water, or even to process the transfer of federal money that pours into the state budget.

As a constitutional officer, Martin said he would come to work "if the building's open."

The Senate and House of Representatives buildings would remain open because those offices, unlike state agencies, have the ability to carry forward money from one budget year to the next.

Lists were due from state agencies last week on which essential services they would continue, but those plans are still being compiled, department spokesman Alan Ecker said.

"It's a massive undertaking," he said.

Agency directors were still working out how to pay for essential services if they lose funding even for a few days. The Department of Corrections will need funds to pay corrections officers and feed prisoners; the DHS requires up to $250,000 a day to run the Arizona State Hospital and screen newborns for diseases.

The DHS will use Lottery funds to cover any gap in funding, interim Director Will Humble said. Corrections Director Charles L. Ryan said his department is working with the Governor's Office to develop a plan for funding.

Public schools should not face interruption, state schools chief Tom Horne said. Schools could get temporary loans from county treasurers' offices, the normal channel through which their funding flows.

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