No government has ever spent its way to prosperity. Our proposals help governments be fiscally responsible so citizens can be prosperous.
Mesa pitched a softball to the Chicago Cubs baseball team, and the Cubs hit it out of the park – but taxpayers should cry foul. Under a new contract, the city will shell out $84 million to build a sparkling new stadium for Cubs spring training. The city promised an additional $15 million for parking, power lines, and other infrastructure, on top of costs for maintenance and capital improvements for 30 years.
Reid Buckley, brother of the late political commentator William F. Buckley, Jr., used to ask audiences, “Do you know how high a pile one million bucks would make in thousand dollar bills?” After a pause, he would answer: “Seven inches.” Then he asked, “Now: do you know how high a pile one billion bucks would make in thousand dollar bills?” Again, after a pause: “Well, twenty-eight feet higher than the Washington Monument.”
These days, most states have some sort of government agency responsible for bringing jobs into the state. Most of them, including Arizona’s new Commerce Authority, focus on “target” industries. Whether the focus is the solar industry or another group of companies, the punchline is always the same: a centrally-controlled body – either the agency or the state legislature – should direct taxpayer-financed resources to nurture specific companies for the good of the state’s economic future.
After a devastating series of prize-winning articles by Craig Harris in the Arizona Republic, the legislature took a first step to reform the state’s pensions systems last session. The changes – more tweaks than full-scale reforms – limited some of the worst abuses.
Recently, the U.S. Department of Labor released data on how much each state “overpays” in unemployment insurance (UI) benefits.
Months after the housing bubble burst in 2007, Arizona passed a state budget that many knew was out of balance the day it was passed. By summer of 2007, there was even talk of having a special session to fix the situation.
Arizona’s fiscal 2011, which ended June 30, was expected to end with a $332 million shortfall. As it happens, the shortfall was instead around $30 million, mainly due to a big uptick in corporate income tax collections.
Most regular people think a deficit of any size means we are out of money – but believe it or not, some at the state capitol are already thinking of ways to spend the $300 million instead of saving it in case the economy gets worse or paying off debt.
There are several problems with spending this money now.
State legislators looking to spur job creation should reject federal stimulus efforts as a model. In fact, there are at least two lessons in what not to do that policymakers can learn from President Obama’s failed effort to energize economic growth through government spending and temporary tax gimmicks.
Despite Standard & Poor’s downgrade of the national credit rating, the federal government’s rating is still better than Arizona’s.
Our rating, AA-, is the same as Kentucky, Michigan, and New Jersey. Not exactly state’s that are pictures of economic health. In fact, 44 states have a better credit rating than Arizona, including all of our regional competitors: Colorado (AA), Nevada (AA), New Mexico (AA+), Texas (AA+), and Utah (AAA). Only two states in the country have worse ratings, including California, which has the lowest rating (A-).
Governments are notorious for spending beyond their means. But they can be reined in through a range of tools, from ballot-box initiatives and legislative spending caps to simply using taxpayer resources more wisely. The Goldwater Institute is a tireless watchdog, analyzing and uncovering ways to make spending more efficient and accountable.