Last week the Legislature made some long overdue spending reductions after three years of gimmicks, one-time cash grabs and borrowing. Amidst the cries of Armageddon, it sometimes helps to back away and look at the big picture.
In 2004, state General Fund spending was $7.5 billion. One year later, it stood at almost $9 billion and was more than $10 billion by 2007. With fund transfers and gimmicks taken into account, the budget proposal now on the governor’s desk is for $8.5 billion. Adding in the proposed 18 percent sales tax increase would keep spending for fiscal year 2011 well above the 2004 level.
Some will cry disaster looms with this level of spending. They will claim that roads will crumble and people will suffer. They won’t tell you that road funding isn’t even included in general fund spending, or that there are always alternatives to government when it comes to helping people who truly need it.
Already, an alternative to funding state parks through private contracting is being explored. The state Department of Insurance has proposed a method to become self-funded, a strategy the Legislature has so far rejected. There are ways to accomplish much of what state government currently does without higher taxes. So is this budget Armageddon? Hardly. This is a budget opportunity.
Dr. Byron Schlomach is an economist and the director of the Center for Economic Prosperity at the Goldwater Institute.
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