Byron Schlomach

Two ballot propositions needed to keep state budget balanced

Posted on September 07, 2007 | Author: Byron Schlomach
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Most Arizonans probably think the state’s budget problems were solved with Proposition 100, the 18 percent sales tax increase approved in May 2010. However, if Arizona’s voters fail to approve two more budget-related proposals during the Nov. 2 general election, the Legislature will have to move swiftly on additional spending reductions.

Propositions 301 and 302 remove all of the money from two special funds to help balance the current budget. Prop. 301 would take almost $125 million from the Growing Smarter Fund, which was created in 1998 to buy state trust lands and protect them from development, even though only a tiny fraction of Arizona’s land will ever be developed. Prop. 302 would take $325 million from First Things First, an early childhood education program created in 2006 that has no legislative oversight and until this spring hadn’t spent any of its money on programs for children.

The Legislature built the current budget under the assumption these two propositions would pass. If they fail, the state funding shortfall will be at least $700 million. Meanwhile, additional federal funding for the state Medicaid program will be lower than expected. Tax revenues are coming in a bit slower than had been forecasted too.

Earlier this year lawmakers identified $862 million in “contingency cuts” that would have occurred if Prop. 100 hadn’t been approved. Public education would have borne the brunt of the reductions. Now, it’s quite likely these contingency plans will become a reality.

Organized opposition to propositions 301 and 302 has already begun. But no one has stepped forward to lead the campaign to pass the ballot measures. Gov. Jan Brewer has said almost nothing about them. The Arizona Chamber of Commerce and Industry, an advocate for the sales tax increase, has decided not to weigh in this time. Other groups that supported Prop. 100 are silent too.

If no one leads the propositions to victory, public education will not be spared from the spending reductions that Proposition 100 promised to prevent.

Dr. Byron Schlomach is an economist and director of the Center for Economic Prosperity at the Goldwater Institute.

Learn More:

Heartland Institute: Arizona Tax Hike Fails to Generate Expected Revenue

Joint Legislative Budget Committee: Summary of Enacted FY 2011 Budget and FY 2010 Revisions

Joint Legislative Budget Committee: Budget Status Update

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