Ariz. lawmakers may have December special session

Arizona legislators are still struggling to conclude their special session on the state's budget troubles but already are working on ideas for another one that could be held in December to do more to close the $2 billion shortfall.

More spending cuts and borrowing could be under consideration, as well as Gov. Jan Brewer's desire for a temporary sales tax increase and still-developing economic recovery proposals. Other topics being discussed include legislation to head off existing or potential legal challenges to previous budget-balancing steps.

Any spending cuts considered in December would be on top of the nearly $300 million being considered during the current special session, which is scheduled to resume Monday after a surprise meltdown Thursday among Senate Republicans.

The magnitude of the budget problem makes closing the shortfall in chunks a near-necessity, said Senate President Bob Burns, R-Peoria.

"If we try to do it all at once, we just have sticker shock," Burns said.

And waiting for action until the 2010 regular session starts in January isn't smart, other key lawmakers said.

"The economic numbers are getting worse, and I think that's the biggest (reason)," said House Majority Whip Andy Tobin, R-Paulden. "If we saw some stability, if we saw some improvement ..."

House Appropriations Chairman John Kavanagh, R-Fountain Hill, said the Legislature would need to act in December in order to hold a March special election on budget issues that divide lawmakers. A March vote would let lawmakers know the outcomes of those questions in time to finish work on the current budget and write the next one, he said.

Potential ballot questions include a reauthorization of the Arizona Lottery, Brewer's sales tax proposal and Republican lawmakers' calls to relax voter-approved spending mandates during fiscal emergencies.

If the sales tax doesn't go up, lawmakers will have to cut spending deeper than they've been willing to do so far, Burns said.

"We need that message from the voters," Burns said.

Renewing the lottery past its current 2012 authorization would allow the state to borrow against future lottery proceeds. Brewer and lawmakers have floated lottery borrowing proposals intended to raise as much as $800 million.

The lottery "securitization" would be on top of massive borrowing and funding delays already being used by the state to cover gaps in the current budget and the one before it.

There's no certainty, of course, that lawmakers will be able to agree on any of the difficult budget issues that could come up in December.

In August, they narrowly defeated a possible referral of the sales tax increase. Meanwhile, Democrats' proposals to apply the current sales tax to more transactions and Republicans' desires for future long-term tax cuts have faltered.

House Republicans are developing an "economic recovery package," possibly in time for consideration in December, Tobin said, adding that the specifics haven't been determined.

"I would say tax reform and job growth," Tobin said.

Kavanagh said an additional $300 million of cuts should be made in December so the reductions can be spread over as many months as possible in the fiscal year which already is more than a third over.