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Open your wallets even wider, Arizona taxpayers.
You may already know that every American is on the hook for just under $50,000, each person’s piece of the $15.6 trillion in debt run up by the federal government.
But what you may not know is that so much more is owed in your name; about $10,258 for every Arizonan’s share of the $66.5 billion in debt and unfunded obligations borrowed by state and local governments.
In a new report, Debt and Taxes, the Goldwater Institute breaks down that debt. It also enters the strange world of public finance where debt is not debt, governments are not governments and billions of dollars in obligations are supposedly traded without risk.
Most of the debt racked up by state and local governments – about $44 billion – is in bonds issued by the state, counties, cities, school districts and hundreds of other taxing authorities created as stand-alone governments under Arizona law. Billions more comes from shortfalls in pension plans for government workers. There is even $1.3 billion in payments the Legislature simply chose not to make to balance the state’s budget that is just floating around on the books.
The Arizona Constitution is supposed to limit the state’s total debt to $350,000. The tabs that can be run up by local governments have their own caps as well. But the courts have determined those limits only apply to certain types of debt. So governments in Arizona rely far more heavily on borrowing that is not confined by constitutional restrictions or requirements for voter approval.
The Goldwater Institute has developed a series of policy recommendations to curb the ability of state and local governments to bypass voters and avoid constitutional restrictions on issuing debt.
Why should you care? State Treasurer Doug Ducey said it best:
“Taxpayers should care about it because it’s an obligation that they or their children are going to have,” Ducey said. “People should be concerned about the amount of debt, the type of debt, and the fact that there is no overall plan to pay down the state debt.”
Goldwater Institute: Recommendations for Reform