Honest budget debate requires common starting point

By Byron Schlomach, Ph.D.
Goldwater Institute

It’s easy to be confused when it comes to the state budget and the competing plans for closing next year’s deficit.

On the one hand, Governor Brewer says there is a $4 billion deficit going into 2010. On the other hand, the Legislature says it’s a $3 billion deficit. The Legislature’s plan claims to trim the budget by $630 million, while the Governor claims $930 million in reductions. Yet, it’s consistently reported in the news that the Legislature is cutting more than the Governor.

Clearly, the two sides are using different starting points, making it rather hard to get at the truth. The Legislature apparently starts with the current 2009 budget; but the governor starts with the 2009 budget as written before January, and doesn’t take into account the budget reductions that were already made this year.

To help address this problem in the future, the Goldwater Institute has recommended that state finances be independently certified by the State Treasurer’s office to provide lawmakers with an accurate figure upon which to base the budget.

But the biggest subterfuge of the budgeting process to-date is the amount of state spending reported and the degree of shrinkage that has occurred in government. Since 2007, General Fund spending in Arizona has been pretty much flat, around $10 billion, as shown in the graph below. Total state spending, however, including all special funds, fund sweeps, and federal monies, has increased every single year (with the possible exception of yet-to-be-completed FY 2009).

 In other words, by using fund sweeps, increased federal funding, and other gimmicks, policymakers have mostly avoided actually reducing state government. In fact, state government employment increased through most of 2008 and as recently as February was still higher than in 2007. Local government employment has also continued to grow throughout the recession.

Perhaps with a common set of assumptions and an honest look at the big picture, we could finally get the state budget problem resolved. Regular Arizona taxpayers’ pocketbooks are shrinking; it’s high time government shared the pain.

Byron Schlomach, Ph.D, is director of economic policy at the Goldwater Institute.


  1. Matt Sh. says

    General fund spending flat? The light blue rectangles look like 7.5 M in 2005 and 10 M in 2009. 25% increase in 5 years. Is that what inflation and population growth conbined has been over the same time period?

  2. Conservative does not mean Republican says


    He said that General Fund spending has been flat at $10 B since 2007.

  3. I wish the Goldwater Institute would explain how increased federal funding for AHCCCS; monies the universities receive in grants, donations and tution; and federal Title I grants for k-12 education are budget “gimmicks.” Apparently we are suppose to be troubled that state government has found ways to fund a large share of what it does without relying on appropriated money.

  4. Matt Sh. says

    Oh, thanks Conservative does not mean Republican. I guess I need to read better, instead of just looking a light blue rectangles.

  5. Diogidog says

    The debate is over. It’s war now, baby! How come so much spending when the population has evaporated with the southerly blowing winds? The highways are less congested and crime is down. Hmmm… somebody is not paying close attention to the real needs versus the real income. It’s chop, chop, chop or the current political constabulary will get mowed down in the next election. NO NEW TAXES. PERIOD. Chop. Chop. Chop. It’s time to thin the government out.

  6. Parent X says

    I have to second Todd’s remarks. It is a bit rich that the Goldwater Institute is calling for an ‘honest’ debate…I’ve been paying close attention to their recent updates and have found some very disingenuous cherry-picking going on when they present statistics.

    Sorry Bryon, but as long as you guys insist on counting my kid’s lunch money as “K-12 Revenue” from the state, you’ll have to sit tight in your glass house while someone else leads the ethics charge.

  7. Conservative does not mean Republican says


    Way to do some cherry picking of your own with your criticism. Mr. Schlomach did not just say the increased spending was due to “gimmicks.” If you read carefully, it says the increased non-General Fund spending is due to “fund sweeps, increased federal spending, and other gimmicks.” Your precious federal spending is included. Learn to read before you criticize.

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