Arizona Taxpayers Miss Out on $4.5 Billion

Posted on March 22, 2005 | Type: Press Release
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PHOENIX-A new report examining more than 10 years of data finds Arizona taxpayers could have received $4.5 billion in tax refunds since 1992 had Arizona enacted a budget stabilization reform modeled after Colorado's Taxpayer Bill of Rights.

Such budget stabilization measures keep the growth of government in proportion to changes in population and inflation, and automatically refund all surplus revenue to taxpayers. Study author Dr. Michael New, assistant professor at the University of Alabama and Goldwater Institute senior fellow, notes, "an inspection of Arizona's budgetary history indicates the state's persistent budgetary shortfalls are due to high rates of expenditures." He adds, "Managing government growth through a Taxpayer Bill of Rights could effectively end state fiscal crises."

Managing the growth of government is key in a state where real per capita expenditures increased by more than 22 percent from 1991 to 2000, quickly outgrowing the population base.

Satya Thallam, fiscal policy analyst at the Goldwater Institute, argues that in addition to its stabilizing effect, a Taxpayer Bill of Rights also reduces special interest influence. "Special interests always find ways to convince the legislature to spend taxpayers' money. But with a Taxpayer Bill of Rights, legislators must prioritize, and voters must approve any spending above the managed growth limit. This rebalances the power structure away from special interests and towards taxpayers' interests. Ultimately, this gives voters more control over how their money is spent."

Colorado's Taxpayer Bill of Rights has also brought noted economic success. During the second half of the 90s, Colorado had the nation's highest gross state product growth and was second in personal income growth. Thallam states, "Arizona has the opportunity to enjoy similar economic growth. The question is whether policymakers will take that opportunity."

The report, The Time is Now: A Taxpayer Bill of Rights for Arizona, is available online.

Andrea Woodmansee, Director of Communications, Goldwater Institute,  (602) 712-1257

Satya Thallam, Fiscal Policy Analyst, Goldwater Institute, (602) 462-5000,

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