Terry Goddard, Arizona’s attorney general, blasted the budget process led by Republican legislators and took aim at cartel crime across the border when he spoke May 7 in Amado.

Then Goddard dropped a broad hint that he might run for governor in 2010. Members of several Southern Arizona Democratic clubs that sponsored the dinner on the lawn of the Territorial Inn applauded.

“We’re up against serious criminal threats from the (Mexican) cartels,” Goddard said. He described the drug cartels as “coordinated, effective and violent.”

Goddard supports the Merida Initiative, which calls for cooperation between the U.S., Mexico and Central America to combat drug trafficking and international crime, he said. But he noted that millions of dollars flow from the U.S. to cartels in Mexico.

While an individual can carry no more than $10,000 in cash across the border, criminals can use prepaid stored value cards to transport up to $1 million in funds, Goddard said. “These have got to stop,” he said.

“The money and the market for the cartels to be successful is on this side of the border,” Goddard said. “Violence in Mexico is directly attributed to the fact we have the largest demand for drugs in the world.”

The U.S. has spent billions of dollars trying to suppress and interdict shipments of drugs and the price for those drugs has gone down, Goddard said. “We should look harder at education and treatment, where spending has stayed the same.”

He noted that the state meth coalition has reduced methamphetamine use by 50 percent over the past few years.

While Goddard does not support legalization of marijuana at this time, “if there is a rational way to take the profit out of marijuana, we need to find it,” he said.

It’s critical for law enforcement agencies to share information and acquire radio equipment that enables them to communicate rapidly with each other, Goddard said. “Our state and local law enforcement can’t talk on the radio with the feds.”

The public is now seeing the effects of whacking $1.6 billion out of the budget year that ends June 30, Goddard said.

“We still haven’t seen the 2010 budget,” he said. He predicted that cuts would be even larger for next year.

“They (Republican legislators) almost extinguished my office,” Goddard said.

This could cost the state millions of dollars, since one of the functions of the Arizona Attorney General’s office is to defend the state from liability lawsuits, Goddard said. “In the past year, various litigants brought $2 billion in claims. We settled for $7.5 million.”

The current budget took $150 million from the Department of Economic Security and slashed staff at Child Protective Services, Goddard said. Kindergarten through 12th-grade education took a cut of $144 million and some 7,000 teachers lost their jobs.

“This budget fired one third of the employees in the Department of Revenue,” Goddard said.

That move saved $9 million but the state may have lost $172 million in revenue, he said. Hundreds of businesses have collected sales tax and never turned it in, he explained. The department needs employees to track down those taxes.

Gov. Jan Brewer wants to repeal the State Equalization Property Tax, “in exchange for a sales tax on you and me,” Goddard said. “That’s a bad deal.”

The tax, which falls more heavily on businesses, has been suspended for the past three years and was scheduled to go back into effect in the next budget year, he said. It could have generated about $250 million a year for education in 2008, according to the Arizona Education Association.

“2010 is clearly the time of decision,” Goddard said. “We have to elect a Democratic governor.”

He urged his fellow Democrats to court “reluctant voters” this year and get them registered for early voting so their ballots will arrive in the mail. He estimated that the party could bring in 100,000 to 150,000 new voters.

“Our young Democrats have done an amazing job across the state,” Goddard said. “We have a chance to make a difference.”

A member of the audience asked, “Terry, how can we help you decide to run for governor?”

Goddard smiled and said, “I don’t want to announce while the Legislature is in session. I have a job to do in the Attorney General’s office.”