Goldwater Institute Offers Plan to Balance State Budget

Posted on December 18, 2008 | Type: Press Release
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Phoenix--When lawmakers go back to work in January, their priority will be to close the state's billion-dollar budget deficit. With expenses far exceeding revenues, government will have to reign in spending or increase taxes to comply with the state's balanced budget requirement. Raising taxes in a down economy will make it even harder for Arizona families to make ends meet, so tax increases should be off the table.

Deciding where to trim will be a daunting task, but the Goldwater Institute is making it easier with a new report called "A Fresh Start for Arizona: Proposals for Closing a Billion-Dollar Budget Gap."

"How do you eat an elephant? One bite at a time. Solving the budget crisis will take reductions in many areas and will require each agency to do their part," said Dr. Schlomach, the Institute's director of economic policy. "This is not a prescriptive list, but a starting point for fresh thinking."

Over the past five years, state government has grown 30 percent in real terms, taking Arizona from one of the lowest-spending states in the country to being on par with notorious big spenders like Connecticut. In fact, if spending had just kept up current services, the deficit would be less than $100 million, an amount that could easily be covered by the rainy day fund. Cutting spending now by $1 billion will still leave more money in real terms in the hands of state agencies than they had five years ago.

Several years ago, Texas closed a $10 billion biennial revenue gap without a tax increase. Today, that state has a $12 billion surplus. Other states, such as Georgia, are also closing current gaps without tax increases.

The 90 recommendations range in savings from $24,000 to over $200 million. They include eliminating the state Employee Wellness Program--which provides workplace massages to state employees--and the Arizona Commission on the Arts, an agency whose existence is difficult to justify when there are millions of private sources for funding art. The recommendations also include rolling back the just-implemented full day kindergarten program.

Read the budget-balancing recommendations in "A Fresh Start for Arizona" here

The Goldwater Institute is a nonprofit public policy research and litigation organization whose work is made possible by the generosity of its supporters.

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