PHOENIX-The $8.2 billion budget signed today by Gov. Janet Napolitano is a 12 percent increase over last year's budget, a growth rate more than four times higher than the population growth rate of 2.6 percent. Excessive spending that outpaces the population means individual taxpayers shoulder a larger tax burden and sets the state up for fiscal crisis in times of economic slowdown.
The state's profligate spending demonstrates the need for a structural limit, such as a Taxpayer's Bill of Rights, to keep government spending in check. "The public budgeting process means there's always a lobby ready to advocate new spending, while there's little incentive for policymakers not to spend," says Goldwater Institute fiscal policy analyst Satya Thallam. "Managing government growth through a Taxpayer's Bill of Rights will force policymakers to prioritize, reduce the power of special interests, and protect taxpayers."
The new budget includes funding increases of nearly 20 percent for programs such as the Arizona Health Care Cost Containment System and the Governor's Office of Strategic Planning and Budgeting. Budgets at the Department of Health Services and the State Land Department will grow by almost 30 percent.
In signing today's legislation, the governor removed the marriage penalty from the state scholarship tuition tax credit program. By 2008, married couples will be able to take a tax credit of up to $1,000. However, Governor Napolitano failed to sign the corporate scholarship tuition tax credit, saying she may consider the proposal in a special session.
"Whatever the vagaries of political negotiations," said Goldwater Institute president Darcy Olsen, "good policy should not be held hostage. Expansion of the scholarship tax credit is good for children, good for the education system, and good for taxpayers. It's time policymakers put aside politics and put kids first."
Satya Thallam, Fiscal Policy Analyst, Goldwater Institute, (602) 462-5000, firstname.lastname@example.org
Andrea Woodmansee, Director of Communications, Goldwater Institute, (602) 712-1257, email@example.com