During the last recession, Arizona’s treasurer, or Chicken Little as former Gov. Janet Napolitano once called him, suggested that the state save more.
Dean Martin suggested that Arizona hire an actuary, someone to calculate how long recessions lasted and how much money the state would need to finance prisons, schools and other government institutions until revenue picked up again.
By the time Martin said he had earned enough power for his ideas to hold sway, the economy began to reinvigorate and saving once again fell out of style.
“You don’t need to change your tax system,” Martin said in an interview after he spoke Monday at Gila Community College during an event sponsored by Rim Country Republicans.
“Taxes will always fluctuate,” he continued. But when the state spends $28 million each day when it’s only taking in $22 million, as Martin said it did during Napolitano’s last six months in office, problems inevitably arise.
And now, as the legislature grapples with balancing a projected $3 billion shortfall for the next fiscal year, Martin predicts the budget will pass at 3 a.m. on July 1, the deadline day, with no tax increases. However, he also predicted lawmakers would need to return to make later revisions, although he said the $3 billion figure was accurate, and would likely not increase.
Like an alcoholic, Martin said the first step is admitting a problem exists. The legislature and the governor admit there is a spending problem, but some won’t acknowledge the severity, Martin said.
And until the state reduces spending, problems will persist.
On April 15, Martin was forced to arrange overdraft protection when the state’s general fund dipped $340 million below zero — the first time overdraft protection became necessary since the Great Depression. As of last week, the state was $34 million in the red.
Also last week, legislators announced they would delay a $300 million school payment until the next fiscal year. Martin deplored the maneuver as another budget gimmick, and said the problem is “self-inflicted.”
Because of a previous education rollover, Martin said he’ll owe K-12 districts $900 million come July 1.
“That makes my life interesting,” he said. “I’m not going to have $900 million.”
Alas, Martin said he is the state’s banker and cannot tell his customers how to spend money.
Yet he said the sooner the legislature passes next year’s budget, the sooner he can figure out how to keep the state solvent. That’s a tricky proposition in an era of tight credit.
“Our future is not in our own hands right now until we get spending under control,” Martin said.
He expects recovery next year, with another three to five years before peak economic activity levels return, barring economic disaster.