Arizona's Budget: "The fiscal wolf is at the door"

01-09-2011 • AZcentral.com

David Stockman, budget chief under President Ronald Reagan, delivered a sobering assessment of the nation's economy Friday. "The fiscal wolf is at the door," Stockman told an audience assembled for a "State of Our State" seminar. His prognosis set a grim mood for the Monday start of Arizona's legislative session, where lawmakers must grapple with a deficit-riddled budget and try to make good on their pledge to turn the economy around. Stockman told the assembled legislators, business and civic officials and others that the nation's Capitol will offer no help and probably will complicate matters. "Washington will become a fountain of harm as you struggle with our own problems," he said. Federal stimulus dollars that have shored up holes in Arizona's budget the past two fiscal years expire in June, and there are no indications that Washington will send additional aid, Stockman said. Nor does he see a rosy future for Arizona, predicting no uptick in the local economy, nor in the taxes that fuel state government. Local leaders have been less glum, although sober, pointing to signs such as a slight decline in the unemployment rate that hints of economic recovery. Arizona faces an $825 million deficit in its current budget and a $1.4 billion hole in fiscal 2012.