Goldwater Institute

Arizona policymakers could take a lesson from the classic comedy Ghostbusters. Near the beginning of the film, Stantz (Dan Aykroyd) and Venkman (Bill Murray) are trying to decide what to do after being kicked out of Columbia University’s paranormal research department for wasting the school’s money.

Stantz says, “Personally, I liked the university, they gave us money and facilities and we didn’t have to produce anything… You don’t know what it’s like out there. I’ve worked in the private sector. They expect results.”

Results, in terms of effective use of taxpayer money, are sorely lacking from Arizona’s school finance formula. Last year, the state spent $125 million on empty seats in Arizona public schools. The state paid for some 13,500 “ghost” students in districts with declining enrollment. This was caused by the state’s outdated school finance system, which uses the prior year’s enrollment count to calculate funding for the current school year. Adding insult to injury, districts can report current-year enrollment increases and have their funding adjusted, but no such current-year adjustments are made for districts with declining enrollment.

The solution is right under lawmakers’ noses: fund schools based on the number of students in the classroom now, instead of last year. And we even have a model at our disposal. Arizona’s charter schools report enrollment periodically to the department of education during the year, and their funding is adjusted based on how many children are attending school currently.

Senate Bill 1295, sponsored by Sen. Chester Crandell, would do just that. Schools would report estimated enrollment before the beginning of the school year, then revise their enrollment count and have their payments adjusted halfway through the year. The Arizona Department of Education can even ask districts to report changes to student enrollment periodically in order to adjust school payments.

Just like we expect excellence from our schools, taxpayers expect effective use of their money. This bill would be a great step in that direction.

Learn more:

Goldwater Institute: Ghost Busters: How to Save $125 Million a Year in Arizona’s Education Budget

Ghostbusters: Stantz and Venkman discuss the private sector

Arizona State Legislature: SB1295

Washington’s big spenders are getting more and more untethered from reality. A year ago, they argued that the Fourteenth Amendment somehow empowered the President to ignore the debt ceiling. More recently, they urged the President to mint a new trillion dollar platinum coin—provoking ridicule even by fellow travelers, like comedian Jon Stewart. And now, an article advanced by Economist Neil H. Buchanan and attorney Michael C. Dorf contends that President Obama can disregard the debt ceiling because doing so is the “least unconstitutional” option when forced to choose between violating the ceiling or his duty to execute appropriations.

There’s only one problem with this contention: The last legislative act governs in the event of an unavoidable clash with a prior legislative act. This rule of law means the President is fully empowered by Congress to withhold spending on any appropriation that was enacted before a subsequent debt ceiling is set, as needed to enforce that ceiling. Because there are plenty of appropriations that fall into that category, nothing warrants ignoring the debt ceiling.

Of course, it is doubtful that those who want the President to ignore the debt ceiling are motivated by a cogent legal analysis. Buchanan and Dorf reveal in their article that they don't want any check on debt other than the ordinary budgeting process. The problem with this perspective is that debt is especially prone to abuse. Politicians are all too happy to engage in debt spending that shifts the cost of current policy choices to future nonvoters. This is why 49 states have some sort of debt limit built into their constitutions, and also why the current federal statutory debt ceiling is better than nothing.

But these kooky debt ceiling evasion theories are likely to keep on coming unless we finally cure Washington’s debt addiction. This will require a constitutional reform that holds the President accountable for enforcing a hard debt limit. But such a reform won’t be proposed by Washington; the states and the people will have to advance the Compact for America instead.

Using an agreement among the states, the Compact for America invokes Article V of the United States Constitution to quickly and safely advance a powerful Balanced Budget Amendment. Bills advancing the Compact for America have already been drafted or introduced in four states, including Arizona, Connecticut, Georgia, and New Mexico. Arizona Rep. Adam Kwasman is leading the way by securing passage of HB2328 from the state House Federalism and Fiscal Responsibility Committee last week. And now, legislators in California, Idaho, Kansas, Maryland, Oklahoma, North Dakota, Texas, and Virginia, are ready to pull the trigger. This rapidly growing movement is our best hope for imposing some restraint on our exploding federal debt.

Learn more:

CNN Money: Is the debt ceiling unconstitutional?

CNN: Obama should override the debt ceiling

The Daily Show: The Trillion-Dollar Coin

Compact for America: Official Website

Arizona State Legislature: HB2328

Arizona State Legislature: Federalism and Fiscal Responsibility Committee Hearing (1:41)

It’s been said that federal money is like a drug: once you have a taste for it, you want more. When that happens, the drug dealer has power over the user.

For decades, the federal government has hooked the states on federal taxpayer money. The number of federal aid programs for state and local government grew from 327 in 1965 to 1,122 in 2010. Sixty-five percent of that growth has occurred since 2000. Today, the federal government spends over $650 billion on these programs.

The lion’s share of these programs is not state and federal partnerships like the federal highway system. Transportation programs only account for about 10 percent of the total – the third biggest chunk. The biggest portion is health and welfare programs (accounting for 55 percent), and the second largest is education (20 percent).

Some states, however, are more prone to this addiction than others. Arizona, for instance, is practically a ward of the federal government. Arizona’s federal aid as a share of total state expenditures in 2011 was at least 30% according to the most recent Census Bureau data. This puts Arizona in the top ten of all states. Some of this is certainly a function of demographics, poverty rates, and the presence of federal and Indian land. But some of it is self-inflicted.

“Free” federal money is quite an enticement for some policymakers. For instance, federal matching funds have been part of the rationale Governor Brewer’s office has put forward for expanding Arizona’s Medicaid program. Yet the federal government often pulls its share of the funding stream at a later date, leaving state taxpayer’s on the hook for a program they may not have supported in the absence of the federal subsidy.

States can avoid much of this dependency on the federal government – and the strings that always come with federal money – by simply refusing to expand state programs for the purpose of getting federal matching funds. And federal policymakers looking for ways to balance the U.S. government’s budget can look to state and local funding as part of any budget-cutting package. Such a move would not only encourage more prudent decision-making by state policymakers but it would also help restore federalism like the U.S. Constitution’s authors envisioned.

Learn more:

Census Bureau – State Government Finances 2011

State Budget Solutions – Federal Aid to State Budgets Rise . . . But is the End Near?

Cato Institute – Federal Aid-to-State Programs Top 1,100

Reason – Get States off the Federal Dole

Goldwater Institute - Arizona's Struggle for Sovereignty: The Consequences of Federal Mandates

Everyone would like to be first in something. First across the finish line. First one picked for a team at recess. First one to explore uncharted waters. Thanks to Arizona's private school scholarships, Sarah is going to be the first person in her family to go to college.

"She continues to inspire me everyday, and she is so gifted and smart," her mom, Star, says. Sarah attends St. Gregory College Preparatory School using a scholarship awarded by a school tuition organization. In Arizona, individuals and businesses can make charitable contributions to these organizations and receive a dollar-for-dollar tax credit for their donation. Individuals can contribute $1,000 and married couples can donate up to $2,000, while statewide, the total amount of tax credits to businesses for their donations cannot exceed $20 million (this limit increases by 20 percent annually).

More than 30,000 scholarships were awarded to Arizona children in 2011, including scholarships to 115 children with special needs and more than 4,500 low-income students.

For children trapped in failing schools or assigned to schools that simply aren't a good fit, these scholarships are a lifeline. "Sarah believes she can change the world. There is no doubt in my mind that she will and already is," Star says.

Sarah’s favorite classes are biology and geometry, and she admits, "I'm not a big fan of English, but I love to write." Last fall she had A's in every class but one.

In 2011, Arizonans gave $51 million to scholarship organizations to give children better school opportunities. Sixty-nine businesses gave a total of $11 million. Policymakers can make it easier for businesses to contribute funds by streamlining the donation system and allowing S-corps, or incorporated small businesses, to make contributions.

Sarah still has a few years to go before she applies for college, but she wants to major in environmental studies with a minor in architectural history. The scholarship to St. Gregory is helping to make her dream for her life possible.

Learn more:

Goldwater Institute: Tax Credit Scholarships: Questions and Answers

Goldwater Institute: Tax Credit Scholarships Encourage Big Dreams

AZCentral: Range of school options allows children to thrive