Remember this number: $4 billion. That's the current spending gap in Arizona's budget.
The state was $500 million in arrears for fiscal 2009. With Governor Brewer's vetoes and revenues continuing to plummet, the current 2010 fiscal year is estimated to be $1 billion in deficit. The Joint Legislative Budget Committee estimates the state will be $2.5 billion in the red for fiscal 2011, which the legislature will budget for this spring.
The state is gimmicked out. Buildings have already been mortgaged, payments have been delayed, and every possible fund balance has been raided. A record property tax increase has gone into effect. All of this has been done in a desperate attempt to keep spending on a par with the big-spending year of 2007 in which actual operating General Fund spending was $9.5 billion. That's when times were good.
So how about after the economy turned sharply south? The legislature originally sent Governor Brewer a fiscal year 2010 budget of $9.7 billion. Then she used her line-item veto authority to increase spending. Now 2010 operating spending is over $10.3 billion.
Where are the spending reductions? If we keep spending at current levels, it will be impossible to close even the one-year gap for 2011. The state would have to increase taxes supporting the General Fund by a third to avoid budget cuts in 2011.
Those who say we can't afford to reduce spending should explain where the money will come from. The reality is we can't afford not to make reductions. Arizona is out of gimmicks.
Byron Schlomach, Ph.D, is director of economic policy at the Goldwater Institute.
Goldwater Institute: Saving With Systemic Change
Goldwater Institute: A Fresh Start for Arizona: Proposals for Closing a Billion-Dollar Budget Gap
Joint Legislative Budget Committee: General Fund Annual Expenditures for Each Agency FY 1979-FY 2009
Joint Legislative Budget Committee: Statement of General Fund Revenues and Expenditures with One-time Financing Sources