Adding programs isn't way to deal with revenue drop

Posted on January 16, 2008 | Type: In the News
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Gov. Janet Napolitano has a strange idea of how to deal with the state's expected huge revenue shortfalls this year and next year.

Granted she did say in her State of the State address this week that she planned to ask state departments to reduce spending to help deal with an estimated $1 billion shortfall in tax revenues this year - one-tenth of Arizona's $10.6 billion budget. That's a wise fiscal step, if it is truly implemented.

However, in the same state address she outlined major new state initiatives involving education, health care, energy conservation, illegal immigration, transportation and more. Even in cases where there may not be direct state funding of these programs, there would undoubtedly be a need for increased state bureaucracy to deal with the initiatives.

How is she going to do all this at a time when a fiscal crisis looms for the state? One way is to take money from the state's "rainy day" fund, which is excess revenue taken from taxpayers in more prosperous years.

Another way is to borrow money to cover spending. That is not a solution because it merely pushes the taxpayer burden off to another time, much as individuals do when running up charges on their credit cards. In the end, the bill has to be paid - by Arizona's taxpayers.

Astonishingly, she also thinks the state's taxpayers - already suffering from the economic downturn, as indicated by the drop in tax revenues - should pony up more taxes to cover a new transportation program for the state (although much of the money would go to metropolitan projects).

Napolitano wants the Legislature to put a measure on the November ballot asking Arizona voters to approve the new transportation program. Launching this effort in these economically challenging times simply makes no sense. We hope voters will see the folly of this idea, if the Legislature does put it on the ballot.

In addition to asking for government expansion - the opposite of what should be done - Napolitano asked the Legislature not to make "harsh cuts." Those affected by cuts always think they are "harsh," and we assume that would be her view if favored state programs are reduced.

Her view seems to be that we should look forward to good times that will come at some point in the future and forget about the current bad times.

We agree with the reaction of the head of the Goldwater Institute. Darcy Olsen, president and CEO of the Arizona public policy group, said, "This is fairy tale politics where birds sing and dance and all is right with the world. But you can't make (the state deficit) disappear by standing in a wishing well."

We hope the Legislature brings some reality to the problem and its solutions.

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