Stephen Slivinski

Transparency is Needed for Arizona’s Credit Card Statements

Posted on September 06, 2012 | Author: Stephen Slivinski
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As families across Arizona work to make ends meet, they may be surprised to know that state and local governments have run up even more debt. As of today, bonds issued by every level of government in Arizona equal around $7,500 per person in the state. Someone will have to repay those debts. And the sad reality is that repayment will likely fall to future Arizonans who haven’t even been born yet.

Almost a quarter of this debt isn’t for things that we traditionally rely upon government to provide, like roads and law enforcement. Instead, it has financed the construction of things like sports stadiums and shopping malls.

You might ask, “But doesn’t Arizona have a constitutional limit on debt?” In fact, the Arizona state constitution limits state debt to $350,000, or about $8 million in today’s dollars. The local level debt limits are based on the value of property within the city or county. In either case, today’s total government debt loads are much higher: at least $44 billion.

Truth is, the real debt amount is likely higher. A number of quasi-government “special districts” have issued plenty of debt, but are not required to report those amounts to Arizona’s Department of Revenue as required of all other levels of government.

And, to top it all off, some of this debt wasn’t approved by voters in the first place. It may have even been issued by non-elected bodies. They may say that this debt floated by non-elected governments won’t ever hurt taxpayers or those paying surcharges on utility bills, for example, but the reality is that they can. If any of those bonds default, someone has to pay them off.

Taxpayers and policymakers deserve to have full transparency of all outstanding debt in Arizona. Transparency is also a vital first step to restoring accountability to entities that issue bonds and could lead policymakers to pay down some of that debt and guard against heavy debt loads in the future.     

Learn more:

Goldwater Institute: Cutting up the Credit Cards: Seven Ideas to Reform the Culture of Debt in State and Local Government

Arizona Department of Revenue: Report of Bonded Indebtedness, Fiscal Year 2010-2011

State Budget Solutions: Annual State Debt Report, 2012
 

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