Arizona’s Budget

We face a projected State budget deficit of $1.5 billion this year. And it’s now anticipated we’ll have amassed a $3.4 billion shortfall by 2011.

How did we get here? Within former Governor Napolitano’s first term, depletion of the General Fund increased by 70% as $28 million per day was spent; while revenues were only at $22 million per day. This started the slide toward an initial $5.8 million shortfall, a deficit that has continued to snowballed over time. Since 2007 the State has lost:

• 22% of its sales tax revenue

• 38% of personal income tax revenues

• 57% of corporate income tax revenues

(Statistics above from Governor’s Executive Budget Status Report, 12/09.)

Our former reserves are now depleted; today we find we’ve been left with a budget that was constructed much like a house of cards.

A fresh, common-sense approach is now critical*. The previous governor’s practice of repeatedly spending the State’s reserves, coupled with overly optimistic calculations of (projected) State revenues, has created a deep hole from which Arizona must now extricate itself.

Reduction of spending is only a partial solution. Creation of new jobs and additional revenue streams are essential to a comprehensive solvency plan for Arizona’s budget - a plan that includes prudent use of existing resources, but does not raise taxes on Arizona citizens who are already overburdened in a weakened economy.

Just one example of Karen’s ideas for additional revenue streams: Lease highway rest areas to private enterprises, such as restaurants, service stations, etc. - this would generate new revenues for taxpayers and reduce maintenance costs for the State.

*The “3 R’s” of Fiscally Responsible Government

REVISIT ... all programs and projects we’re currently funding. There are hard choices to be made in a tough economy. Which programs are really essential, and which ones need to go? Which ones can be restructured for greater efficiency at less cost?

REDUCE ... wasteful spending on inefficient processes, excess administrative costs, and eliminate unnecessary programs. Let’s find ways to lessen the bureaucratic burdens that are making it harder than ever for businesses to keep doing business in Arizona.

REINVEST ... or redirect available dollars to those programs and projects that will actually yield returns - now and in the future, both directly and indirectly. Let’s focus on putting more Arizonans back to work; helping small business enterprises get the funding they need to thrive (and thereby helping them contribute to the health of the State’s economy), and ensuring better educations for our children, who are Arizona’s workers and business owners of the future.