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Georganna Meyer remembers the first scary signs.
"It was the spring of 2001. We started to see (income tax) withholding receipts decline, then decline again and again," said Meyer, chief economist at the Department of Revenue.
"That never happens in Arizona."
Never, that is, until the Great Budget Bust of 2001, which shut down Arizona's Booming '90s, tossed thousands out of jobs and spawned deep state budget deficits that continue to cripple government.
Gov.-elect Janet Napolitano has proposed a commission to undertake a "comprehensive performance review" to solve Arizona's continuing budget crisis. The review committee would be composed of economic experts and business leaders and tasked with finding $300 million in savings. Despite the old saw that good reforms tend to die in committee, there is reason to believe that a committee is a good idea.
There is a tendency to view Arizona's budget problem in isolation, as though the state got into this mess by pursuing uniquely wrongheaded fiscal policies.
Although it's small comfort, a recent study by the Cato Institute demonstrates that Arizona has a lot of company: Most states screwed up in pretty much the same way.
Moreover, the problem wasn't, as commonly alleged, excessive tax cutting. Pretty clearly, it was a lack of spending restraint, particularly toward the end of the 1990s.
With Arizona's budget deficit estimated to exceed $400 million by January, Governor Hull is expected to convene a special legislative session. Think of that session as a fiscal version of Dante's Inferno, where legislative pilgrims are made to face the consequences of their own gluttony and greed.
Asked how he would fix the state's $1 billion deficit, Matt Salmon promised not to raise taxes, but declined to specify the state programs he would cut.
Betsey Bayless, his closest Republican rival, offered several budget-cutting specifics in a plan that would rely on economic growth spurred by a cut to the business personal property tax.
Attorney General Janet Napolitano, the leading Democrat, suggested several ways to save money, but offered no overall estimate as to whether the cuts would add up to $1 billion.
Phoenix, AZ-Citing a Harvard study and a Census Bureau report, Goldwater Institute economist Robert Franciosi offers a challenge to what he calls "the local mythology that Washington is shortchanging Arizona on federal pork."
In the 1979 movie, "Being There," Peter Sellers plays Chance, a simple gardener who is catapulted to fame and renown on the strength of his gardening maxims, which the world takes as wise metaphors. If Chance were to listen to the debate over balancing the 2003 Arizona budget, it is easy to imagine what he might conclude: "You should first get rid of the weeds before you trim your garden."
The primary cause of this year's fiscal deficit is excessive government spending. State spending has grown far more than needed to keep pace with Arizona's growing population. Whereas population has grown by only 36 percent, government spending has grown by 63 percent.1 Contrary to some reports in the media and the legislature, the mild recession has not left the state withering on the vine. The current state budget is the largest in Arizona's history.
Phoenix, AZ-In a Goldwater Institute study to be released Thursday, May 2, economist Stephen Slivinski outlines over $233 million in programs in Arizona's 2003 general fund budget that could be eliminated, privatized, or reduced. Slivinski offers these baseline program cuts as an alternative to budget plans released this week by the legislature and the governor's office.
This legislative session, Arizona lawmakers will sweat away trying to cope with a $1.6 billion budget shortfall. Yet even such a huge deficit has not stopped legislators from wanting to expand an already overextended government.