Matthew Ladner

The 1990s: The Golden Age of Arizona Poverty Reduction?

Posted on May 19, 2008 | Author: Matthew Ladner
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Dr. Phil likes to ask, "How's that working out for you?" We can only reply, "Not very well."

This decade, Arizona lawmakers cast aside the frugality of the 1990s. Since 2000, spending on Arizona's Medicaid system has risen 132 percent, and soaring annual interest payments are up 213 percent. Spending on the Department of Economic Security, the states welfare agency, has almost doubled, from $404 million in fiscal year 2003 to $796 million in fiscal year 2008.

Despite this spending, poverty rates have been heading in the wrong direction.

The figure above shows the very different outcomes of two different eras of government spending, with childhood poverty rates decreasing almost twenty percent in the 1990s but increasing by 12 percent in the first five years of this decade. Crunch the numbers for yourself here.

These numbers end before the current slowdown, making them all the more disturbing. To reduce poverty rates, Arizona needs a faster rate of economic growth in the private economy. During the 1990s, many states with high taxes and spending suffered increases in poverty rates, despite a nationally booming economy. Poverty trends have many causes, but this much is clear: While presumably some are benefiting from all the increased spending, its not working out well for the poor.

Dr. Matthew Ladner is the Vice President of Research at the Goldwater Institute.

Learn More:

Goldwater Institute: How to Win the War on Poverty

Goldwater Institute: A Comparison of State Spending Growth under Arizona Governors

JLBC: General Fund Operating Budget Spending, Fiscal Years 1979-2008

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