No government has ever spent its way to prosperity. Our proposals help governments be fiscally responsible so citizens can be prosperous.
The choice is stark, according to a new report by economists Art Laffer and Steve Moore published by the American Legislative Exchange Council. State policymakers can choose growth and prosperity or they can choose economic hari-kari.
During the 1990's, Arizona chose growth and prosperity. Where Arizona's total state and local tax burden had risen to 11.8 percent by 1991, it has since fallen to 10.3 percent. The result has been phenomenal growth and unparalleled peacetime economic opportunity for this state.
Here are four ways our elected officials can make the new year a truly happy one:
1. Remember that Santa Claus lives in the North Pole, not Arizona. When elected officials feel the need to give away presents, they either should use their own money (imagine that!), or at least make sure that everyone benefits such as with across-the-board tax cuts rather than subsidies to favored business interests.
Even before Arizona’s last legislative session began, it became clear state parks would be used as a pawn in the budget chess game. Threats that parks would close were used as an excuse to avoid restructuring government in any meaningful way.
As of today, four parks, three of which are former private estates, are closed. Four others which do not contain camping facilities are on reduced schedules.
Last week Governor Brewer line-item vetoed pieces of the budget sent to her by the legislature. With that she blew the budget wide open. Even by the lax standards of state government accounting, the budget is nowhere close to being balanced, a direct violation of the spirit, if not the letter, of the state constitution. But there’s more.
The Arizona Republic recently ran a series of editorials on the state's budget crisis castigating legislative leadership for the budget debacle. The editors should have focused on the institutional structures that permit Arizona's legislative and executive branches to ignore their constitutional duty to balance the budget.
Arizona's general revenue spending currently is about $3.3 billion more than its ongoing revenues. Money-saving strategies are a must. But reducing spending need not mean cutting core services. Rather, the situation presents a golden opportunity to make government more efficient.
Here are five ways to help state governments become more efficient:
During the Great Depression, Chief Justice Alfred C. Lockwood dissented against a string of Arizona Supreme Court decisions that allowed the state to deviate from the Arizona Constitution's pay-as-you-go budget rules. In one case, Lockwood warned, "Facilis descensus Averno. Sed retro!" Translation: "The road to hell is easy. Reconsider!"
President Obama and Senator Max Baucus are proposing a radical expansion of health insurance, but selling it as health care reform. Unfortunately, expanded insurance coverage is likely to worsen the real problem in health care: the high and rising prices of care.
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.
Some 30 states have massive budget deficits, but let's examine two that are consequential to Arizonans: ours and California's. How policymakers navigate deficits that equal roughly a quarter of their budgets will influence the trajectories of their economic recoveries. The early results don't portend positive trajectories.