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Taxpayer handouts will not balance state budget or help economy

November 2, 2010 By Leave a Comment

By Byron Schlomach, Ph.D.
Goldwater Institute

Arizona’s policymakers will face a huge challenge after today’s election results are tallied. The state’s structural budget deficit, or the amount that yearly spending exceeds yearly revenues, is in the neighborhood of $1.8 billion. That’s $720 a piece for the typical Arizona household. We’ve already seen record tax increases, mortgaged assets and every possible accounting gimmick to keep the state out of bankruptcy. But still, we’re deeply in the red.

So why is Governor Jan Brewer giving away $2.2 million of federal stimulus money to a new private laboratory that will conduct medical research? The federal money could have filled any number of budget gaps but was used instead to subsidize the health care industry, which makes up nearly a fifth of national gross domestic product. Clearly, this is not an industry on the brink of failure.

Policymakers must resist the temptation to dole out tax dollars to favored industries that offer a fanciful promise of more prosperity down the road. Our insecure fiscal situation holds back overall economic growth because businesses are uncertain about their future tax liability. The Tax Foundation recently ranked Arizona 34th out of 50 states for our business tax climate. The state’s ranking has fallen for two straight years due to tax increases. The Beacon Hill Institute ranks Arizona at 24th on their competitiveness index with our big structural deficit and poor bond rating helping to pull us down.

Politicians must get down to the business of reducing the size of government and making other fundamental reforms needed to put Arizona’s fiscal house in order. None of these should involve special interest giveaways and subsidies.

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

Learn More:

Goldwater Institute: Budget Reduction Opportunities

Governor’s Office: Governor Jan Brewer Dedicates Funding to Advance Research into Major Diseases

Tax Foundation: 2011 State Business Tax Climate Index

Beacon Hill Institute: Tenth Annual State Competitiveness Report

Filed Under: Economics, Spending, State Budget, State Economy, State Government

Predictions Anyone?

November 1, 2010 By 33 Comments

In just 24 hours the polls will close and millions of Americans will hopefully assuage the anger that has dominated our political culture since November of 2008.

It has been a long two years. Let me say that again. It has been a long two years.

Many great people have run for public office over the last year and a half. Some did not make it past the primary but I know they will continue to do great things. I look for some of them to return.

As we head toward the finish line tomorrow at 7 PM, I hope and pray all the hard work that we have done will pay off. Given the current political temperature, I sense it will be a “hot” evening for Republicans.

So without throwing my predictions out on the table, I’d like to hear from our readers on what to expect.

Filed Under: Predictions

HORNE FORSEES NINTH CIRCUIT PARTIALLY OVERRULING LOWER COURT ON S.B. 1070

November 1, 2010 By 6 Comments
Press release
For immediate release

PHOENIX – Republican Attorney General nominee Tom Horne, who attended today’s U.S. Ninth Circuit Court of Appeals hearing regarding S.B. 1070, believes at least part of the lower court ruling vacating portions of the law will be overruled.

“Before these arguments began, there was much discussion about the three judges, who is on the left, the right and in the middle,” Horne noted. “Regardless of those considerations, I believe the three judges will unanimously overturn Judge Susan Bolton’s earlier decisions on S.B. 1070 in regards to Sections 2 and 6, but not Sections 3 and 5.”

Horne explained, “On the merits of Section 2, which is the language that requires local law enforcement to make inquiries of Immigration and Customs Enforcement, Judge Bolton ruled that such language was an undue burden on ICE. But it is clear to me this panel will unanimously overrule her and will rule that the federal government is obligated under statute to respond to inquiries of local law enforcement.”

He added, “Section 6 deals with warrantless arrest of a suspected illegal who has committed a crime that is a ‘removable offense.’ The Ninth Circuit panel believes this is a law that could be applied in a way that is unconstitutional, but could still be applied in manner that is legal. The court challenge in this instance is called a ‘facial challenge’ which means if there is any way to enforce the law legally, the challenge should fail. For that reason, I believe the Court will unanimously overrule Judge Bolton on Section 6.”

Horne continued, “In regards to Section 3, which is the documentation requirement, the judges said Arizona may not add to the federal law that requires legal aliens to carry documentation of their immigration status. If the lower court ruling is upheld, the state would argue before the U.S. Supreme Court that the state and federal requirements are the same.”

Horne concludes, “With respect to Section 5, which concerns employment of illegal immigrants, the Court will likely rule against Arizona because the Ninth Circuit is bound by an earlier ruling by another three judge panel from the Ninth Circuit. This argument would have to be appealed at the U.S. Supreme Court.”

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Tom Horne in the Media from San Francisco

The Jay Lawrence Show on KTAR – Click here to listen live.

KPHO Channel 5 – Click here to read.

AZ Central / Arizona Republic – Click here to read.

12 News – Click here to read.

Filed Under: Border, Campaigns & Elections, Constitutional Law, Illegal Immigration, Judicial, Uncategorized
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