Business Week calculates that the State of Arizona has the biggest budget shortfall in the nation, at $3.1 billion, or 30.8% of the FY09 budget. The state started the fiscal year in July with a $1.9 billion gap which continues to widen. AZGS took a 5% reduction of state general funds in July and has been instructed to cut expenditures in anticipation of the Legislature taking action after they convene in mid-January. Other agencies took similar cuts and some have had program funds swept up for use elsewhere.