Arizona is out of budget gimmicks

by Byron Schlomach, Ph.D.
Goldwater Institute
 
Remember this number: $4 billion. That’s the current spending gap in Arizona’s budget.
 
The state was $500 million in arrears for fiscal 2009. With Governor Brewer’s vetoes and revenues continuing to plummet, the current 2010 fiscal year is estimated to be $1 billion in deficit. The Joint Legislative Budget Committee estimates the state will be $2.5 billion in the red for fiscal 2011, which the legislature will budget for this spring.

The state is gimmicked out. Buildings have already been mortgaged, payments have been delayed, and every possible fund balance has been raided. A record property tax increase has gone into effect. All of this has been done in a desperate attempt to keep spending on a par with the big-spending year of 2007 in which actual operating General Fund spending was $9.5 billion. That’s when times were good.

So how about after the economy turned sharply south? The legislature originally sent Governor Brewer a fiscal year 2010 budget of $9.7 billion. Then she used her line-item veto authority to increase spending. Now 2010 operating spending is over $10.3 billion.

Where are the spending reductions? If we keep spending at current levels, it will be impossible to close even the one-year gap for 2011. The state would have to increase taxes supporting the General Fund by a third to avoid budget cuts in 2011. 

Those who say we can’t afford to reduce spending should explain where the money will come from. The reality is we can’t afford not to make reductions. Arizona is out of gimmicks.
 
Byron Schlomach, Ph.D, is director of economic policy at the Goldwater Institute.


Comments

  1. I see lots of people holding car washes to help pay their bills. I saw signs last week that said, “Will paint for a donation” and “Will landscape for a donation.” Maybe the state legislators can start cutting lawns….

  2. Jan Brewer needs to do the right thing and not run again. This is gross incompetence.

  3. Sooner or later someone in the GOP is going to have to articulate the position that both spending cuts and tax increases are needed to fill this gap. Pretending that either one of these is not going to be needed is living in a fantasy land.

  4. It’s a nice sentiment, but it completely ignores the realities that govern state spending — automatic voter-protected spending increases, increased use of state social services like healthcare and unemployment, and the fact that there isn’t the political will at the capitol (with the governor or GOP lawmakers) to cut government in a manner that would please Goldwater Institute.

  5. Fiscal Joe says

    So when do the citizens get to shut down and punish the government for fiscally misbehaving? Apparently, they still haven’t learned their lesson to live within their means and now they want to further punish the private sector. Maybe it’s time to remind them who they work for?

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