“And that is just our cash flow,” said State Treasurer Dean Martin at a meeting of National Federation of Independent Business Nov. 3. “That is not what we’re committed to spend. According to our overall budget we could be in the red by $2 billion for this current fiscal year by then.”
Five members of the Legislature were also present at the meeting: State Sen. Al Melvin, R-Tucson, and state Reps. Vic Williams, R-Tucson; and Phil Lopes, Steve Farley and Daniel Patterson, all Tucson Democrats.
 There are no easy financial fixes for the State Treasurer Dean Martin. Joe Pangburn photo |
“I don’t like to be all doom and gloom, but it is bad,” Martin said. “We are on negative watch right now with the rating agencies because they are seeing we are using tricks and gimmicks to balance our budget and not making proper adjustment to it. Our worst case scenario is that we end up like California where we are cut off from the banks. But I don’t think that will happen.”
Among the legislators, there was some finger-pointing.
“I know you are not supposed to talk poorly about members of your own party,” Melvin said, “but I do not agree with what the governor has done. We brought her a balanced budget and she vetoed cuts we had made that increased spending.”
Patterson said that as a new legislator this year, and a Democrat, he found many frustrations.
“We suggested a revenue neutral balanced budget that went nowhere,” he said. “There are a lot of frustrations all across the board, and there are no solutions that don’t have impacts across the board.”
Martin said the financial situation of the state is not a Republican problem or a Democrat problem, but it is a math problem.
“The math doesn’t care which way you vote,” he said. “It is a problem that has to be solved.”
Martin’s biggest worry is that the state did not balance its books for the fiscal year that ended in June, as it is supposed to do each year, but there were no penalties.
“Nothing happened,” he said. “We had a carryover of negative $500 million and there were no consequences. This is a very dangerous path we are treading.”
This caused some stir among the small business owners present.
“Why do they get to do that?” asked Dana Kaplan, an owner of Stadium RV and Bus Wash. “I am not allowed to spend more than I bring in. And if I don’t do the job I am there to do, I get fired or the business shuts down. What can we do as business owners other than what we are already doing?”
Martin said supporting groups such as the NFIB is important.
“The State of Arizona is the largest employer in the state,” Martin said. “Which is scary. They are followed by Wal-Mart, but the largest class of employers is the small business owners. Wal-Mart can pay for people to lobby the government and watch out for their interests, but you as the small business owner can’t. This organization does that for you and lets you know when the right time is to call a specific legislator.”
As far as financial fixes for the state, Martin said spending needs to revert back to 2005 or 2004 levels to balance the budget.
“We increased our spending even after revenue started to drop,” he said. “We need to pull everything back to where it was in those years. It’s the only really fair way to make those kinds of cuts.”
Martin likened the economy to the Nike swoosh logo and said we are currently in the dip at the bottom and we’re about to start the slow crawl up and out of this mess, but it is going to take time.
“I think the consumer will start to show signs of life next year,” Martin said. “They’re kind of like a dog that was kicked and is hiding in the dog house. Next year they are going to stick their head out and see if the coast is clear, but any sudden, big movements and they are going to run back inside.”
Contact reporter Joe Pangburn at jpangburn@azbiz.com or (520) 295-4259.
Comments