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There is a tendency to view Arizona's budget problem in isolation, as though the state got into this mess by pursuing uniquely wrongheaded fiscal policies.
Although it's small comfort, a recent study by the Cato Institute demonstrates that Arizona has a lot of company: Most states screwed up in pretty much the same way.
Moreover, the problem wasn't, as commonly alleged, excessive tax cutting. Pretty clearly, it was a lack of spending restraint, particularly toward the end of the 1990s.
With Arizona's budget deficit estimated to exceed $400 million by January, Governor Hull is expected to convene a special legislative session. Think of that session as a fiscal version of Dante's Inferno, where legislative pilgrims are made to face the consequences of their own gluttony and greed.
Asked how he would fix the state's $1 billion deficit, Matt Salmon promised not to raise taxes, but declined to specify the state programs he would cut.
Betsey Bayless, his closest Republican rival, offered several budget-cutting specifics in a plan that would rely on economic growth spurred by a cut to the business personal property tax.
Attorney General Janet Napolitano, the leading Democrat, suggested several ways to save money, but offered no overall estimate as to whether the cuts would add up to $1 billion.
Phoenix, AZ-Citing a Harvard study and a Census Bureau report, Goldwater Institute economist Robert Franciosi offers a challenge to what he calls "the local mythology that Washington is shortchanging Arizona on federal pork."
In the 1979 movie, "Being There," Peter Sellers plays Chance, a simple gardener who is catapulted to fame and renown on the strength of his gardening maxims, which the world takes as wise metaphors. If Chance were to listen to the debate over balancing the 2003 Arizona budget, it is easy to imagine what he might conclude: "You should first get rid of the weeds before you trim your garden."
The primary cause of this year's fiscal deficit is excessive government spending. State spending has grown far more than needed to keep pace with Arizona's growing population. Whereas population has grown by only 36 percent, government spending has grown by 63 percent.1 Contrary to some reports in the media and the legislature, the mild recession has not left the state withering on the vine. The current state budget is the largest in Arizona's history.
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.
This legislative session, Arizona lawmakers will sweat away trying to cope with a $1.6 billion budget shortfall. Yet even such a huge deficit has not stopped legislators from wanting to expand an already overextended government.
When politicians propose ways to balance the budget many of their solutions are bad ideas. Governor Hull has proposed one of the worst. Instead of offering enough spending cuts to eliminate the entire deficit, she proposes to cover $283 million of the budget gap by having the state borrow the money.
Arizona is facing a $675 million budget deficit this year. This budget crisis is a product of irresponsible and out-of-control government spending during previous years. If the state budget had grown no faster than the rate of population growth plus inflation since 1995, the budget would be $650 million smaller this year. To balance the budget, the state legislature must cut spending to that level during a special session that will begin on November 13. The rest of the budget gap could be covered by transfers from Arizona's $350 million rainy day fund.