Arizona Budget Update

The Free Enterprise Club succinctly calls out the gimmicks in the Govenor’s budget: shifting revenue, debt, photo radar, blah blah blah. 

If the government were held to the same standards as everyone else, Napolitano’s budget would have the IRS and SEC up in arms.

            In response to a $1.7 billion 2009 budget deficit, the Governor’s plan calls for $2.3 billion in new debt, an early tax payment, an expansion of photo radar, increased taxes from the lottery, and $700 million in revenue figures above consensus forecasts.

            “The Governor’s budget plan for 2009 is irresponsible and should be rejected,” Voeller said. 

            The Governor’s plan shifts from paying cash to borrowing money for the following items:

             $864 million             School construction (FY’08 and ’09)
             $967 million             University building and maintenance
             $470 million             Phoenix medical school
               $50 million            Public safety communications
                $7 million             Emergency operations center

TOTAL    $2.358 billion          (source: Joint Legislative Budget Cmte)


            To realize new revenue, the Governor asks businesses to pay their July estimated retail taxes in June, meaning businesses will have to pay both June and July payments in the same month.  She also assumes $90 million in revenue from an expansion of photo radar.  It is unclear how much it will cost to implement photo radar statewide or how many tickets will have to be issued to net $90 million.
            The Governor plans to spend additional state money promoting the lottery in hopes that an increase in lottery participation will bring $10 million to state coffers.
            The Governor’s plan also calls for a $60 million shift from the state’s balance book to county budgets by housing felons in county jails rather than state prisons.
            Over the last five years, government spending increased 32 percent after adjusting for population and inflation.
            “The most troubling aspect of the Governor’s budget is the total lack of fiscal discipline,” Voeller continued.  “After years of overspending, she attempts to plug a $1.7 billion dollar budget gap with $2.3 billion in new debt.


  1. kralmajales says

    Oh and what do you call lowering taxes at the same time we have a budget crisis of this level? Thats not even borrowing…it is fraud.

    Folks…how many of you richie riches bought your house or any other major purchase with cash money?

    I am betting 2% of you at best and if you did, you were rich.

    The point I am making is that the things in life that are expensive and important do necessitate some borrowing. This is why the GOP for the most part supports student loans for students (I am right about this aren’t I?).

  2. Buddy Breon says

    Kralmajales, you are like every other liberal leftie out there. Tax and spend, borrow and tax and spend. It never stops for you guys.

    It’s pretty simple, really. We build about 35 new schools per year – every year. Now, how many people buy 35 homes a year and how many of those who buy even two or three homes in a year, do so without selling one of them?

    But, it’s more than that.

    Homes usually cost five to six times the annual wage of most workers. Financing is the only solution for most buyers of new homes because of that.

    But, the $400 million to build new schools every year is only 4 percent of the state budget. That’s about the same as the utility bills for the average homeowner. Tell me, would you advise a homeowner to take out a 30-year mortgage to pay his utility bills? And, then do that every year thereafter? As you think about it, I’m sure your answer is a resounding no.

    Same for new schools. It doesn’t make sense. Do that for some years, and soon the annual debt payment would exceed the cash we pay for new schools. Bonding for schools nearly doubles the cost of the state’s new schools. It doesn’t make sense.

    And, don’t use the governor’s argument that we bond for roads. Of course we do, and have a dedicated revenue stream to pay for the bonds. No such revenue is available for schools – it has to come out of the General Fund, the same place we pay it now.

    By the way, student loans serve the same goal as loans for homes for individuals. If college were only 4 percent of a student’s income, I suppose student loans would make little sense either. And those tax cuts? They have proven to be an economic benefit for our country and state. You can not demonstrate otherwise.

  3. Interesting post. I am of same opinion with what the author said.

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