President Harry Truman had a sign on his desk that read, "The buck stops here." Governor Janet Naplitano's desk sports a coffee mug with Harry Truman's face, but she apparently pays no heed to his famous motto. Instead, her guiding philosophy seems to be: "The buck stops anywhere but here."
The governor's budget plan doesn't actually fix current budget problems, and doesn't face the hard fact that those problems were caused by too much government spending. Instead, her budget plan passes the buck to current and future taxpayers, requiring them to pay for the government's excesses.
First, Napolitano's plan relies too much on debt. The 2003 budget includes $100 million in bonds for school facilities, and the 2004 budget includes another $75 million borrowed in anticipation of new Lottery money. All that debt passes the buck to future taxpayers, who will have to pay tomorrow for the mistakes of state government today.
The Napolitano plan also passes the buck to property owners. Squirreled away within the plan is a proposal to suspend the "Truth in Taxation" statute, whereby property tax rates are adjusted for increases in property value. The governor's plan would keep the tax rate at its current level, soaking property owners whose properties have appreciated. The governor's staff claims this is not a tax increase, and would simply stop a scheduled tax cut. Yet, there is no denying that this would force property owners to cough up more money. By definition, that's a tax increase.
The governor proposes passing the buck to next year's legislature by using a budget "rollover." This creates the illusion of cutting costs by shrugging off until next year the costs of current government overspending. The governor promises $95.5 million in so-called savings as a result, but this will only exacerbate problems next year.
The governor also proposes passing the buck to "off budget" funds, mainly by taking $134 million from the vehicle registration tax fund of the Department of Transportation to remedy the deficits caused by excessive spending in the general fund. Those off-budget funds were never intended to remedy the mistakes of a big-spending legislature and governor, and much of that money has to be paid back later, further straining future budgets.
There are plenty of bucks being passed back and forth in Napolitano's proposed $250 million "sale" of assets. Rather than actually selling the state's assets, which would be an excellent idea, the Napolitano plan would simply mortgage currently owned state property. That property would be leased back to the government for ten years, after which the state would reassume ownership. But why play games? There are many state assets that can be sold free and clear.
The one saving grace in the Napolitano budget is that it calls for a minor reduction in Department of Commerce spending, elimination of the Governor's Office of Excellence in Government, some savings from consolidation, and reform of some agriculture programs.
But most of the so-called spending reductions, which the governor estimates will equal $105.9 million for 2004, are not actual reductions from the 2003 level of spending. Instead, they are small pieces taken out of an already-inflated budget baseline. In fact, the governor's budget for 2004 is $6.7 billion--a 12% increase over 2003, even though state revenue is expected to grow, according to the most generous estimates, to only $5.9 billion.
Governor Napolitano is not to blame for Arizona's current budget deficit, but the deficit is now her problem. Unfortunately, her proposed budget would only compound the deficit crisis over the next two years.