Goldwater Institute

Whenever the people are well-informed, they can be trusted with their own government. - Thomas Jefferson

Arizona trails far behind other states in terms of public school academic achievement. National comparative data often place Arizona near the bottom of state rankings. Aggregate fourth-grade reading scores on the National Assessment of Educational Progress, also known as the Nations Report Card or NAEP, barely budged between 1992 and 2007. Other states, meanwhile, have made substantial progress.

​Arizona is awash in federal money. In fiscal year (FY) 2007, Arizona received close to $8.5 billion in federal funds. This money funds programs that most Arizonans are familiar with, such as Medicaid and the No Child Left Behind Act (NCLB). Even though the inflow of federal dollars appears attractive, there is a catch: As federal dollars flow in, state dollars are fixed to ever-growing demands connected to these programs. In 2000, the State of Arizona used general funds at close to $463 million for Medicaid alone. By 2005, that figure had risen to $914 million, and it is projected to grow to $1.3 billion in FY 2008.

Arizona has a transportation problem. The average Phoenix commuter spends some 38 hours a year stuck in traffic, and one in Tucson spends an average 42 hours. Overall, traffic congestion costs Arizonans at least $2 billion annually in lost time and wasted fuel. The state must take action on a number of fronts to ensure that transportation problems do not damage Arizona's economy and quality of life.

In 2007, Arizona created a state tax deduction for contributions to 529 college savings plans. The deduction allows families to save tax-free for a child's college education, and the earnings accrued are not taxed if they are spent on higher education. In 2008, individual taxpayers will be able to deduct up to $750 for 529 contributions, and joint filers can deduct up to $1,500.