Two ballot propositions needed to keep state budget balanced


By Byron Schlomach, Ph.D.

Most Arizonans probably think the state’s budget problems were solved with Proposition 100, the 18 percent sales tax increase approved in May 2010. However, if Arizona’s voters fail to approve two more budget-related proposals during the Nov. 2 general election, the Legislature will have to move swiftly on additional spending reductions.

Propositions 301 and 302 remove all of the money from two special funds to help balance the current budget. Prop. 301 would take almost $125 million from the Growing Smarter Fund, which was created in 1998 to buy state trust lands and protect them from development, even though only a tiny fraction of Arizona’s land will ever be developed. Prop. 302 would take $325 million from First Things First, an early childhood education program created in 2006 that has no legislative oversight and until this spring hadn’t spent any of its money on programs for children.

The Legislature built the current budget under the assumption these two propositions would pass. If they fail, the state funding shortfall will be at least $700 million. Meanwhile, additional federal funding for the state Medicaid program will be lower than expected. Tax revenues are coming in a bit slower than had been forecasted too.

Earlier this year lawmakers identified $862 million in “contingency cuts” that would have occurred if Prop. 100 hadn’t been approved. Public education would have borne the brunt of the reductions. Now, it’s quite likely these contingency plans will become a reality.

Organized opposition to propositions 301 and 302 has already begun. But no one has stepped forward to lead the campaign to pass the ballot measures. Gov. Jan Brewer has said almost nothing about them. The Arizona Chamber of Commerce and Industry, an advocate for the sales tax increase, has decided not to weigh in this time. Other groups that supported Prop. 100 are silent too.

If no one leads the propositions to victory, public education will not be spared from the spending reductions that Proposition 100 promised to prevent.

Dr. Byron Schlomach is an economist and director of the Center for Economic Prosperity at the Goldwater Institute.


Comments

  1. Prop. 302 would take $325 million from First Things First, an early childhood education program created in 2006 that has no legislative oversight and until this spring hadn’t spent any of its money on programs for children.

    I say Kill the Tax and give the smokers back their money!

    Shame on GI for using the same “fear tactic” that caused Prop 100 to pass!

    “If no one leads the propositions to victory, public education will not be spared from the spending reductions that Proposition 100 promised to prevent.”

  2. …………………….
    “Prop. 302 would take $325 million from First Things First, an early childhood education program created in 2006 that has no legislative oversight and until this spring hadn’t spent any of its money on programs for children”
    ……..

    That was indeed quite the revelation. What IS it spending the money on?
    Does seem to be the perfect place to go looking for idle cash, though.
    Oh, and shut the whole thing down. If we’ve all survived without it before it was spawned and … well AFTER, too, it’s useless.
    Bet there’s a lot of that same sort of blubber out there that can go before actual useful services are touched.

    Arizona can cut out the crap, shut down worthless programs, contract out to private companies, send employment surging, and then have plenty of money to build a border fence – only 100 yards discreetly north of the border so it’s not actually a “border fence,” but a “noise barrier.”
    With nice designs to project, “friendly” and “shhh.”

  3. 302 was created by taxing smokers 8.00 a carton beginning December 8 2006.

    In that time they had accumulated 325 mil and sat on it. Now the state wants to sweep that money into the abyss of the general fund and continue the 8.00 a carton tax.

    An unconstitutional tax.
    It taxes only 1 segment of the population for the support another portion of the population.

    or let’s use the seperation of church and state arguement.

    It’s a “SIN” tax, well if there is such a seperation how can you tax what religions call sin?

    It was BS 4 years ago when the Democrats did it and it is still BS now that the Republicans want to use it.

  4. A tax on tobacco is not unconstitutional. In fact, it was one of the first taxes, along with alcohol taxes, instituted by post-Revolutionary US to help pay of debts incurred from the war.

    BTW, First Things First wasn’t even required to spend money until this year, that is how the proposition was written.

  5. Stephen Kohut says:

    Put a stake through its heart! We are taxed enough already.

  6. Marsha Says says:

    Who is lying about no money being spent? – I have been employed in a FTF job since July of 2009. I work directly with disadvantaged children and their parents. BTW the law says only 5% of the money can be spent on administration. 95% of the money is spent on services for young children. When DES cut off funding for childcare for our poorest parents (who are working!) FTF stepped up and is picking up that tab. They are not hording the money. They also offered to lend over $300 million to the legislature at no interest until 2014 – but that wasn’t good enough for them. FYI – Regional councils in each county are made up of volunteers – you and I – and they decide what each county in AZ needs. (Maricopa is split up into smaller regions also.) All are welcome to attend and have input at these meetings. Many do attend! This is a real “peoples” run program. “No legislative oversight” Make me laugh – Wasn’t Fanny Mae run with “legislative oversight??” There is complete fiscal oversight with this program! The people passed this tax and the people run this program for birth to 5 year olds. The legislature can’t stand that they can’t touch these funds and this is their tantrum you are voting on. Vote NO on 302! Notice when you read the proposal not a word about First Things First is in there. I wonder why?

  7. Jacqueline O'Connor says:

    To Marsha: I believe administrative costs are 10%, not 5% which adds a new layer of bureaucracy (and cost) to deliverying these programs many of which are available through current programs. I appreciate your comments, though, as someone working in the programs. I plan to vote YES simply because I oppose hitting one group (smokers) to fund a program; it’s punitive. If it’s such a good idea, we should all pay for it. But I don’t believe we should set the state up as surrogate parents. As it is with FTF, we become the caregivers from a child’s birth to age 18 or so. Those who chose to be parents should also accept the responsibility.

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