How deep do budget cuts go?

Goldwater Institute
Byron Schlomach, Ph.D.
 
With less than a month before the 2010 fiscal year begins, Governor Brewer has announced a specific budget plan that proposes cuts in spending of less than $1 billion. The Governor’s cuts for 2010 are smaller than those already made in 2009, despite the state’s staggering deficit of nearly $3.5 billion.

It can be difficult to compare apples to apples when looking at Arizona’s General Fund spending from one year to the next due to the common use of budget gimmicks. Nevertheless, such comparisons can still be revealing.

Byron chart
The above chart shows General Fund spending since 2001. The fiscal 2009 figure accounts for spending cuts that have been made, but understates actual spending due to gimmicks, like fund sweeps and delaying school district payments. The fiscal 2010 figure is the spending level proposed by Governor Brewer after all real cuts–actual spending reductions–are accounted for. Spending is flat since 2007, with hardly a hiccup since the recession started, and the modest state spending reduction in 2009 is largely restored in 2010.

This illustrates the reluctance on the part of many in state government leadership–including Governor Brewer–to adjust to reality. The state’s unemployment rate is currently 7.7 percent, well above the 6 percent reached in the 2002 recession, but state spending has scarcely taken a hit. Various legislative proposals would cut little more. Arizona families have adjusted their budgets to new realities. It’s time the state did the same.
 
Byron Schlomach, Ph.D, is director of economic policy at the Goldwater Institute.


Comments

  1. Dr. Schlomach,

    I am concerned as every time I add up the numbers, and even with the tax games, I do not know how our Governor sees a balance here. Tax Hikes will never replace budget cuts.

    We need the cuts and funnel any adjusted growth into tax incentives–the only way we bring in or keep big business. Yet, we try to leverage impact fees on ailing groups?

    I live near City North, a huge whirlpool of debt, PHX public funds, all so we can have Kierland-light and a few pretentious restaurants? I think of the hockey rink, the light rail, or another favorite, the Reach 11 Sports Complex, a 10 million dollar Multi-field soccer site at Cave Creek and Deer Valley- millions of dollars for parks no one in Phx is allowed to use!

    We are seeing misguided Utopian Dreams on the average man’s dime. I’d like more analysis beyond my simple ability of this state budget. It seems a shell game from my obstructed view and limited economic savvy.

  2. What would it look like if the per capita spending of 2004 was applied to the current population and adjusted for statutory obligated increases?

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