Government Spending

No government has ever spent its way to prosperity. Our proposals help governments be fiscally responsible so citizens can be prosperous.

<p>No government has ever spent its way to prosperity. Our proposals help governments be fiscally responsible so citizens can be prosperous.</p>

What can Arizona lawmakers learn from guru of personal finance Suze Orman? Plenty. Orman's mantra is people first, then money, then things, which is pretty much the opposite of what we heard on Monday in the Governor's annual State of the State address.

Governor Janet Napolitano proposed 12 new government programs and initiatives for the state, in addition to the expansion of several existing programs. These proposed new and expanded programs are offered at a time when Arizona faces a $1.25 billion structural deficit.

Today is the Grand Opening of a development that took nearly $100 million from Phoenix taxpayers to be built. There, you are encouraged to "explore inspiring art galleries, refreshing landscaped parks and cascading fountains." You'll enjoy "entertainment in live-performance spaces . . . each step will be a journey of discovery."

The opulent CityNorth development's recent problems-construction delays and having to market luxury condominiums as rentals-illustrate the wisdom of the Arizona Constitution's framers in forbidding corporate subsidies.

Arizona's public universities have proposed issuing $1.4 billion in bonds for a university building program. The universities have been asking the legislature for this money for a few years, but the construction downturn provides an opportunity to market it as a Construction Stimulus Plan. This plan is fundamentally flawed.

Extending health benefits to domestic partners of government employees is a fiercely contentious issue. Arizona voters decided last year not to prohibit such benefits, but efforts to create them have come up empty in the state legislature.

No problem, says the Department of Administration, a state executive agency: we'll mandate insurance coverage for domestic partners of state employees and retirees by bureaucratic fiat. And it did just that in a proposed rule filed last November 30 to expand the term "dependent" to include domestic partners.

After five straight years of being flush with cash, Arizona faces a staggering deficit of about $1 billion. What went wrong?

Some analysts point to declining revenue. Revenue growth dropped from 7 percent last year to 1.6 percent this year. But declining revenue is only a piece of the puzzle. Most state economies have been slowing, but Arizona is one of the only states in the red.

In the opinion column "'Stimulus' and the States" (Wall Street Journal, April 24), Arizona Gov. Janet Napolitano blames Congress for state budget deficits: "Even if the federal government paid up on only a few of its debts mentioned here, Arizona would not be in deficit this year."

Having spent like a drunken sailor in years of plentiful revenues, the state of Arizona now finds itself with a large and growing budget deficit. ­ Like the mythical siren beckoning sailors to wreck their ships on dangerous shoals, Governor Janet Napolitano soothingly implores the legislature to bridge the fiscal gap by borrowing.

Like a suspenseful action movie that resolves all plot conflicts in the last fifteen minutes, the Legislature passed a budget just in the nick of time. Unlike after a good film, though, I'm left wondering what I waited for. The budget fails Arizonans on a number of fronts.

For one, the budget still isn't balanced. The assumption that only a $1.9 billion shortfall exists for 2009 is based on a rosy scenario of four percent revenue growth next year. According to the Joint Legislative Budget Committee (JLBC), a $2.2 billion spending gap is much more likely.

Despite the lineup at the trough in D.C. for bags of bailout dollars, I urge Gov. Janet Napolitano to resist seeking more federal tax money to help address Arizona's budget crisis. And I wrote her a letter telling her just that.

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