Government Spending

No government has ever spent its way to prosperity. Our proposals help governments be fiscally responsible so citizens can be prosperous.

<p>No government has ever spent its way to prosperity. Our proposals help governments be fiscally responsible so citizens can be prosperous.</p>

The City of Phoenix's $97.4 million subsidy to a developer to build the lavish CityNorth Project-we've dubbed it the Taj Mah-Mall-was based on the developer's estimate that it would need more than $100 million to break even on the deal.

This is called a "feasibility gap"-but the credibility gap is even wider. The city's own independent consultant estimated the feasibility gap at only $25 million.

A prominent public official recently said that due to dedicated revenue spending and spending that is dictated by past voter initiatives, the Arizona legislature directly controls only 35 percent of state spending.

If that's true, and assuming that half the money budgeted for this fiscal year has been spent by January, the $600 million shortfall represents one-third of the remaining discretionary funds for the 2008 fiscal year. No wonder legislators are hesitant to rely only on budget cuts to balance the state budget.

Guess who owns the tallest hotel in Arizona: Westin? Hyatt? Ritz-Carlton?

By 2009, the answer will be the City of Phoenix, which will open a 31-story, 1,000-room hotel offering Sweet Sleeper beds and other amenities. And if Mayor Phil Gordon has his way, Phoenix's hotel gambit may double in size soon thereafter.

What if you got a letter from the state asking for a donation to help balance the state's budget? Would you give? As crazy as that sounds, some lawmakers think you should, and worse, they don't even want to give you the option.

According to the East Valley Tribune, one prominent lawmaker wants to raise property taxes:

Assistant Senate Minority Leader Senator Jorge Garcia has his sights set particularly on an early end to the three-year suspension of a state property tax, a move that would bring in nearly $200 million. "The reality is, I would love to do it," he said.

Words like "crisis" and "pain" describe the state budget situation. The revenue shortfall for this fiscal year, once thought to be as high as $600 million, now looks to be somewhere north of $800 million. Next year looks even worse.

But trouble can be the mother of opportunity. Lawmakers may, for the first time, have a realistic chance to reform one of the structural anomalies that caused the problem in the first place, the Voter Protection Act (VPA).

Heres a seldom-reported fact. Our recent housing bubble was caused by government. The intended consequence was to stimulate the economy. But below-market interest rates produced above-market real estate values.

The choice is stark, according to a new report by economists Art Laffer and Steve Moore published by the American Legislative Exchange Council. State policymakers can choose growth and prosperity or they can choose economic hari-kari.

During the 1990's, Arizona chose growth and prosperity. Where Arizona's total state and local tax burden had risen to 11.8 percent by 1991, it has since fallen to 10.3 percent. The result has been phenomenal growth and unparalleled peacetime economic opportunity for this state.

Here are four ways our elected officials can make the new year a truly happy one:

1. Remember that Santa Claus lives in the North Pole, not Arizona.­ When elected officials feel the need to give away presents, they either should use their own money (imagine that!), or at least make sure that everyone benefits such as with across-the-board tax cuts rather than subsidies to favored business interests.

Even before Arizona’s last legislative session began, it became clear state parks would be used as a pawn in the budget chess game. Threats that parks would close were used as an excuse to avoid restructuring government in any meaningful way.

As of today, four parks, three of which are former private estates, are closed. Four others which do not contain camping facilities are on reduced schedules.

Last week Governor Brewer line-item vetoed pieces of the budget sent to her by the legislature. With that she blew the budget wide open. Even by the lax standards of state government accounting, the budget is nowhere close to being balanced, a direct violation of the spirit, if not the letter, of the state constitution. But there’s more.