Phoenix, AZ-In a Goldwater Institute study to be released Thursday, May 2, economist Stephen Slivinski outlines over $233 million in programs in Arizona's 2003 general fund budget that could be eliminated, privatized, or reduced. Slivinski offers these baseline program cuts as an alternative to budget plans released this week by the legislature and the governor's office.
According to Slivinski, the proposed budget plans suffer from two fundamental flaws. First, because the plans leave unnecessary programs largely intact, they end up making deeper across-the-board cuts than necessary. "It makes no sense to raze your garden without first getting rid of the weeds," says Slivinski. "We should not cut the worthy programs just to protect the special interest programs. If my recommended cuts were made, there could be a much smaller across-the-board reduction."
Second, Slivinski believes that the politicians' budget fixes rely too heavily on bookkeeping gimmicks, and avoid what he sees as the real problem: excessive spending on unnecessary government programs. Says Slivinski, "The budget plans are beginning to resemble a carnival funhouse, complete with smoke, mirrors, and trapdoors." Specifically, Slivinksi questions the use of "revenue enhancements" and "forward funding" schemes.
Explains Slivinski, "Revenue enhancements are transfers from off-budget funds, which will eventually have to paid back, straining future budgets. Forward funding amounts to pushing 2003 spending into 2004, creating the illusion that costs have disappeared. Voila, no more fiscal crisis!"
For Slivinski, this budget gimmickry allows Arizona's legislators to avoid the tough choices caused by their own reckless overspending during the boom of the 1990s. "Again," says Slivinksi, "The real problem is baseline spending. Every year, the legislature gives across-the-board increases to the overall budget baseline. Many of these programs shouldn't be in the budget in the first place." Making these cuts would help reverse the trend of excessive spending, and scale back government to its proper limits.
Slivinski's study, "It All Adds Up: Unnecessary Spending in the Arizona Budget," will be available Thursday at www.goldwaterinstitute.com. To request the report in another format, please call the Goldwater Institute at (602) 462-5000, or write to firstname.lastname@example.org.